We heard this mantra after the 9/11 attacks back in the year 2001: "Go spend money!" "Go shopping" "Go buy a lot of stuff to get this economy moving!" Whenever there is an economic downturn (like the one we are currently in), we are advised by mainstream economists and government officials that consumption is what is necessary for wealth to be created. But this is another Keynesian fallacy.
As Steve Horwitz explains:
Production, not consumption, is the source of wealth. If we want a healthy economy, we need to create the conditions under which producers can get on with the process of creating wealth for others to consume, and under which households and firms can engage in the saving necessary to finance that production.
But Keynesians will typically say that the economy is all about spending: that people don't need to save their money. Instead, they are admonished to get rid of all the money in their pockets at once. According to the mainstream Keynesian economists, this is all about the flow of money: that the simple act of spending gets the "circular flow" going. This allows them to make the argument that in order to "jump start" the economy in a downturn, all we need is more government spending.
Free-market economist Henry Hazlitt defended savings against the consumerism fallacy as follows:
Let us imagine two brothers, then, one a spendthrift and the other a prudent man, each of whom has inherited a sum to yield him an income of $50,000 a year. We shall disregard the income tax, and the question whether both brothers really ought to work for a living, because such questions are irrelevant to our present purpose.
Alvin, then, the first brother, is a lavish spender. He spends not only by temperament, but on principle. He is a disciple (to go no further back) of Rodbertus, who declared in the middle of the nineteenth century that capitalists "must expend their income to the last penny in comforts and luxuries," for if they "determine to save . . . goods accumulate, and part of the workmen will have no work.”* Alvin is always seen at the night clubs; he tips handsomely; he maintains a pretentious establishment, with plenty of servants; he has a couple of chauffeurs and doesn't stint himself in the number of cars he owns; he keeps a racing stable; he runs a yacht; he travels; he loads his wife down with diamond bracelets and fur coats; he gives expensive and useless presents to his friends.
To do all this he has to dig into his capital. But what of it? If saving is a sin, dissaving must be a virtue; and in any case he is simply making up for the harm being done by the saving of his pinchpenny brother Benjamin.
It need hardly be said that Alvin is a great favorite with the hat check girls, the waiters, the restaurateurs, the furriers, the jewelers, the luxury establishments of all kinds. They regard him as a public benefactor. Certainly it is obvious to everyone that he is giving employment and spreading his money around.
Compared with him brother Benjamin is much less popular. He is seldom seen at the jewelers, the furriers or the night clubs, and he does not call the head waiters by their first names. Whereas Alvin spends not only the full $50,000 income each year but is digging into capital besides, Benjamin lives much more modestly and spends only about $25,000. Obviously, think the people who see only what hits them in the eye, he is providing less than.) half as much employment as Alvin, and the other $25,000 is as useless as if it did not exist.
But let us see what Benjamin actually does with this other $25,000. On the average he gives $5,000 of it to charitable causes, including help to friends in need. The families who are helped by these funds in turn spend them on groceries or clothing or living quarters. So the funds create as much employment as if Benjamin had spent them directly on himself. The difference is that more people are made happy as consumers, and that production is going more into essential goods and less into luxuries and superfluities.
This last point is one that often gives Benjamin concern. His conscience sometimes troubles him even about the $25,000 he spends. The kind of vulgar display and reckless spending that Alvin indulges in, he thinks, not only helps to breed dissatisfaction and envy in those who find it hard to make a decent living, but actually increases their difficulties. At any given moment, as Benjamin sees it, the actual producing power of the nation is limited. The more of it that is diverted to producing frivolities and luxuries, the less there is left for producing the essentials of life for those who are in need of them.* The less he withdraws from the existing stock of wealth for his own use, the more he leaves for others. Prudence in consumptive spending, he feels, mitigates the problems raised by the inequalities of wealth and income. He realizes that this consumptive restraint can he carried too far; but there ought to be some of it, he feels, in everyone whose income is substantially above the average.
Now let us see, apart from Benjamin's ideas, what happens to the $20,000 that he neither spends nor gives away. He does not let it pile up in his pocketbook, his bureau drawers, or in his safe. He either deposits it in a bank or he invests it. If he puts it either into a commercial or a savings bank, the bank either lends it to going businesses on short term for working capital, or uses it to buy securities. In other words, Benjamin invests his money either directly or indirectly. But when money is invested it is used to buy capital goods–houses or office buildings or factories or ships or motor trucks or machines. Any one of these projects puts as much money into circulation and gives as much employment as the same amount of money spent directly on consumption.
Hazzlit continues:
"Saving," in short, in the modern world, is only another form of spending. The usual difference is that the money is turned over to someone else to spend on means to increase production. So far as giving employment is concerned, Benjamin's "saving" and spending combined give as much as Alvin's spending alone, and put as much money in circulation. The chief difference is that the employment provided by Alvin 's spending can be seen by anyone with one eye; but it is necessary to look a little more carefully, and to think a moment, to recognize that every dollar of Benjamin's saving gives as much employment as every dollar that Alvin throws around.
A dozen years roll by. Alvin is broke. He is no longer seen in the night clubs and at the fashionable shops; and those whom he formerly patronized, when they speak of him, refer to him as something of a fool. He writes begging letters to Benjamin. And Benjamin, who continues about the same ratio of spending to saving, provides more jobs than ever, because his income, through investment, has grown. His capital wealth is greater also. Moreover, because of his investments, the national wealth and income are greater; there are more factories and more production.
Economist J.B. Say concludes as follows:
[T]he encouragement of mere consumption is no benefit to commerce; for the difficulty lies in supplying the means, not in stimulating the desire of consumption; and we have seen that production alone furnishes those means. Thus it is the aim of good government to stimulate production, of bad government to encourage consumption.
Thus, stimulating consumption is not a path to prosperity. Rather, through the process of the free-market, savings and production will eventually lead to prosperity. But in order for this to happen, capital needs to come back into our country. Capital accumulation, which is necessary for a capitalist free-market economy to thrive and create prosperity, is unattractive in the United States due to the tax burdens, economic regulations, dollar devaluation through monetary inflation that robs the wallets of the American people.
As Steve Horwitz rightly puts it, a government stimulus program that puts money into the hands of consumers fails because the money comes from producers and other taxpayers. You also have to take inflation into account as well. As the money supply continually increase because the Federal Reserve keeps printing money, the currency is devalued. In fact, the dollar has lost approximately 98% of its' value since the creation of the Fed in 1913. All these factors, on top of the economic regulations, makes capital accumulation unattractive in America.
In order to bring capital back into America, most taxes need to be eliminated and reduced, the Federal Reserve needs to be abolished, currency competition must be legalized, and all economic regulations (at the Federal level at least) need to be phases out (i.e. abolished). Only then will capital start flowing into America again and thus give entrepreneurs the means to save money and invest in things that will increase production, leading to a greater creation of wealth for all Americans.
Wednesday, September 21, 2011
Thursday, September 15, 2011
Mutually Assured Destruction vs Mutually Assured Respect
Here is the full text from www.house.gov/paul :
The Soviet Union detonated its first nuclear bomb on August 29, 1949, leading to the doctrine of Mutually Assured Destruction, shared by both the USA and the Soviets. The unwritten agreement by the two super powers deterred nuclear war with an implied threat to blow up the world, if need be, to defend each of their interests.
I well remember the Cuban missile crises of October 1962, having been drafted into the military at that time. Mutually Assured Destruction had significant meaning to the whole world during this period. This crisis, along with the escalating ill-advised Vietnam War, made me very much aware of the problems the world faced during the five years I served as a USAF flight surgeon.
It was with great pleasure and hope that I observed the collapse of the Soviet Empire between 1989 and 1991. This breakup verified the early predictions by the free market economists, like Ludwig Von Mises, that communism would self-destruct because of the deeply flawed economic theories embedded in socialism. Our nukes were never needed because ideas are more powerful than the Weapons of War.
Many Americans at the time were boldly hopeful that we would benefit from a generous peace dividend. Sadly, it turned out to be a wonderful opportunity wasted. There was to be no "beating their swords into plowshares," even though history shows that without weapons and war there's more food and prosperity for the people. Unfortunately, our leaders decided on another course that served the special interests who benefit from constant wars and the arbitrary rearrangement of national borders for control of national resources.
Instead of a peace dividend from ending the policy of Mutually Assured Destruction, US leaders opted for a foreign policy of American world domination as its sole super power. It was all in the spirit of Woodrow Wilson's idealistic goal of "making the world safe for democracy" by pursuing a war to end all wars.
The mantra became that American exceptionalism morally required us to spread our dominance world-wide by force. US world dominance, by whatever means, became our new bipartisan foreign policy. There was to be no peace dividend, though our enemies were virtually non-existent.
In many ways America had been "exceptional" but in an opposite manner from the neo-con driven foreign policy of the last 20 years. If America indeed has something good to offer the cause of peace, prosperity, and liberty it must be spread through persuasion and by example; not by intimidation, bribes and war.
Maintaining world domination is based on an intellectually and financially bankrupt idea that generates dependency, war, loss of civil liberties, inflation and debt, all of which contribute to our economic crisis.
Saddest of all, this policy of American domination and exceptionalism has allowed us to become an aggressor nation, supporting pre-emptive war, covert destabilization, foreign occupations, nation building, torture and assassinations. This policy has generated hatred toward Americans and provides the incentive for almost all of the suicide attacks against us and our allies.
To continue to believe the fiction that the militants hate us for our freedoms and wealth may even result in more attacks against us -- that is, unless our national bankruptcy brings us to our knees and forces us to bring our troops home.
Expanding our foreign military intervention overseas as a cure for the attacks against us, tragically, only guarantees even more attacks. We must someday wake up, be honest with ourselves, and reject the notion that we're spreading freedom and America's goodness around the world. We cannot justify our policy by claiming our mission is to secure American freedoms and protect our Constitution. That is not believable. This policy is doomed to fail on all fronts.
The policy of Mutually Assured Destruction has been gone now for 20 years, and that is good.
The policy of American domination of the world, as nation builder-in-chief and policeman of the world, has failed and must be abandoned—if not as a moral imperative, then certainly out of economic necessity.
My humble suggestion is to replace it with a policy of Mutually Assured Respect. This requires no money and no weapons industry, or other special interests demanding huge war profits or other advantages.
This requires simply tolerance of others cultures and their social and religious values, and the giving up of all use of force to occupy or control other countries and their national resources. Many who disagree choose to grossly distort the basic principles shared by the world's great religions: the Golden Rule, the Ten Commandments, and the cause of peace. Religions all too often are distorted and used to justify the violence engaged in for arbitrary power.
A policy of Mutually Assured Respect would result in the U.S.:
Treating other nations exactly as we expect others to treat us.
Offering friendship with all who seek it.
Participating in trade with all who are willing.
Refusing to threaten, bribe or occupy any other nation.
Seeking an honest system of commodity money that no single country can manipulate for a trade advantage. Without this, currency manipulation becomes a tool of protectionism and prompts retaliation with tariffs and various regulations. This policy, when it persists, is dangerous and frequently leads to real wars.
Mutually Assured Respect offers a policy of respect, trade and friendship and rejects threats, sanctions and occupations.
This is the only practical way to promote peace, harmony and economic well-being to the maximum number of people in the world.
Mutually Assured Respect may not be perfect but far better than Mutually Assured Destruction or unilateral American dominance.
Writes Dom Armentano:
"This is a crucial time in the Ron Paul candidacy. The MSM and the so-called debates are marginalizing Ron's message. Non-interventionism in the economy and in foreign affairs cannot be explained convincingly in debates with statists or in a 20 second sound-bite response to some idiot from NBC. In my view Ron must go AROUND the MSM/debate format and speak directly to the American people. He needs a "game changer" and this could be it.
"My suggestion: Ron should buy time (say 15 minutes) on a national tv network and deliver a major foreign policy address. This would allow him to logically lay out his (our) non-interventionist position and call for an end to all foreign wars. After all, this is the one issue that distinguishes Ron from the other Republicans and, obviously, from the White House. Moreover, the public is entirely fed up with the wars and will (in my view) support a candidate who makes a solid moral and economic case for "bringing the troops home." I am aware that Ron has repeatedly made the argument I suggest; BUT it has been made in regional campaign speeches (this is a national issue with strong Independent support) or in these idiot debates where the message is fractured or ridiculed. Right message but wrong forum or medium. This can be corrected with a nationally televised talk."
The Soviet Union detonated its first nuclear bomb on August 29, 1949, leading to the doctrine of Mutually Assured Destruction, shared by both the USA and the Soviets. The unwritten agreement by the two super powers deterred nuclear war with an implied threat to blow up the world, if need be, to defend each of their interests.
I well remember the Cuban missile crises of October 1962, having been drafted into the military at that time. Mutually Assured Destruction had significant meaning to the whole world during this period. This crisis, along with the escalating ill-advised Vietnam War, made me very much aware of the problems the world faced during the five years I served as a USAF flight surgeon.
It was with great pleasure and hope that I observed the collapse of the Soviet Empire between 1989 and 1991. This breakup verified the early predictions by the free market economists, like Ludwig Von Mises, that communism would self-destruct because of the deeply flawed economic theories embedded in socialism. Our nukes were never needed because ideas are more powerful than the Weapons of War.
Many Americans at the time were boldly hopeful that we would benefit from a generous peace dividend. Sadly, it turned out to be a wonderful opportunity wasted. There was to be no "beating their swords into plowshares," even though history shows that without weapons and war there's more food and prosperity for the people. Unfortunately, our leaders decided on another course that served the special interests who benefit from constant wars and the arbitrary rearrangement of national borders for control of national resources.
Instead of a peace dividend from ending the policy of Mutually Assured Destruction, US leaders opted for a foreign policy of American world domination as its sole super power. It was all in the spirit of Woodrow Wilson's idealistic goal of "making the world safe for democracy" by pursuing a war to end all wars.
The mantra became that American exceptionalism morally required us to spread our dominance world-wide by force. US world dominance, by whatever means, became our new bipartisan foreign policy. There was to be no peace dividend, though our enemies were virtually non-existent.
In many ways America had been "exceptional" but in an opposite manner from the neo-con driven foreign policy of the last 20 years. If America indeed has something good to offer the cause of peace, prosperity, and liberty it must be spread through persuasion and by example; not by intimidation, bribes and war.
Maintaining world domination is based on an intellectually and financially bankrupt idea that generates dependency, war, loss of civil liberties, inflation and debt, all of which contribute to our economic crisis.
Saddest of all, this policy of American domination and exceptionalism has allowed us to become an aggressor nation, supporting pre-emptive war, covert destabilization, foreign occupations, nation building, torture and assassinations. This policy has generated hatred toward Americans and provides the incentive for almost all of the suicide attacks against us and our allies.
To continue to believe the fiction that the militants hate us for our freedoms and wealth may even result in more attacks against us -- that is, unless our national bankruptcy brings us to our knees and forces us to bring our troops home.
Expanding our foreign military intervention overseas as a cure for the attacks against us, tragically, only guarantees even more attacks. We must someday wake up, be honest with ourselves, and reject the notion that we're spreading freedom and America's goodness around the world. We cannot justify our policy by claiming our mission is to secure American freedoms and protect our Constitution. That is not believable. This policy is doomed to fail on all fronts.
The policy of Mutually Assured Destruction has been gone now for 20 years, and that is good.
The policy of American domination of the world, as nation builder-in-chief and policeman of the world, has failed and must be abandoned—if not as a moral imperative, then certainly out of economic necessity.
My humble suggestion is to replace it with a policy of Mutually Assured Respect. This requires no money and no weapons industry, or other special interests demanding huge war profits or other advantages.
This requires simply tolerance of others cultures and their social and religious values, and the giving up of all use of force to occupy or control other countries and their national resources. Many who disagree choose to grossly distort the basic principles shared by the world's great religions: the Golden Rule, the Ten Commandments, and the cause of peace. Religions all too often are distorted and used to justify the violence engaged in for arbitrary power.
A policy of Mutually Assured Respect would result in the U.S.:
Treating other nations exactly as we expect others to treat us.
Offering friendship with all who seek it.
Participating in trade with all who are willing.
Refusing to threaten, bribe or occupy any other nation.
Seeking an honest system of commodity money that no single country can manipulate for a trade advantage. Without this, currency manipulation becomes a tool of protectionism and prompts retaliation with tariffs and various regulations. This policy, when it persists, is dangerous and frequently leads to real wars.
Mutually Assured Respect offers a policy of respect, trade and friendship and rejects threats, sanctions and occupations.
This is the only practical way to promote peace, harmony and economic well-being to the maximum number of people in the world.
Mutually Assured Respect may not be perfect but far better than Mutually Assured Destruction or unilateral American dominance.
Writes Dom Armentano:
"This is a crucial time in the Ron Paul candidacy. The MSM and the so-called debates are marginalizing Ron's message. Non-interventionism in the economy and in foreign affairs cannot be explained convincingly in debates with statists or in a 20 second sound-bite response to some idiot from NBC. In my view Ron must go AROUND the MSM/debate format and speak directly to the American people. He needs a "game changer" and this could be it.
"My suggestion: Ron should buy time (say 15 minutes) on a national tv network and deliver a major foreign policy address. This would allow him to logically lay out his (our) non-interventionist position and call for an end to all foreign wars. After all, this is the one issue that distinguishes Ron from the other Republicans and, obviously, from the White House. Moreover, the public is entirely fed up with the wars and will (in my view) support a candidate who makes a solid moral and economic case for "bringing the troops home." I am aware that Ron has repeatedly made the argument I suggest; BUT it has been made in regional campaign speeches (this is a national issue with strong Independent support) or in these idiot debates where the message is fractured or ridiculed. Right message but wrong forum or medium. This can be corrected with a nationally televised talk."
Sunday, September 11, 2011
9/11 and the Fate of the American Republic
"Statists love to say that 9/11 changed the world. Actually, it didn’t change anything insofar as the federal government is concerned. It continued doing the same things it was doing prior to 9/11 and even expanded them. 9/11 did change our country though, especially with respect to the degradation of liberty and conscience".-Jacob Hornberger
"Those who would trade liberty for security deserve neither liberty nor safety"-Benjamin Franklin
"The U.S. government has learned absolutely nothing since 9/11. Instead of the occasion being a time to reassess a century of bad foreign policy, it was used as an excuse to start two wars against countries that had nothing to do with 9/11 and accelerate the destruction of American freedoms. And now, ten years later, the anniversary of 9/11 will be used to lionize the police state, the warfare state, and the national security state while justifying even more wars."-Laurence M. Vance
It has been a decade since that tragic day when 19 Saudi terrorists crashed two airliners into the World Trade Center and one airliner into the Pentagon. It is estimated that around 3000 Americans lost their lives in that attack. The country was rightfully angry and wanted to avenge those who died. But even to this day, not a whole lot of people contemplate the consequences of the actions the U.S. government took after the 9/11 attacks, or even ask themselves if things could have been done differently.
No, Americans continue to blindly believe that 9/11 changed everything. Many Americans seem convinced that the policies that the U.S. government pursued in the aftermath of 9/11 were somehow necessary and just. Americans seem willing to give up liberty for security, but in the end, we have neither liberty or safety. What should rightfully be called tyranny, has been sold to the American people as "liberty" in an effort the cloak the bad and unjust deeds of the U.S. government.
Why did they attack us?
While this question seems redundant and unnecessary, we must ask ourselves this question in order to find out the motivation for carrying out the destructive attacks on 9/11. Unfortunately, from the very beginning, Americans have been sold a lie in regards to this question: that the attack somehow came about because the terrorist "hate our freedoms" or "hate our way of life". Americans have also been convinced that 9/11 resulted from too few entangling alliances and too few military interventions.
In an article entitled "All the Wrong 9/11Lessons", Michelle Malkin laments those who believe that 9/11 was caused by the aggressive and intervention foreign policy of the U.S. government:
A decade after the 9/11 attacks, Blame America-ism still permeates classrooms and the culture. A special 9/11 curriculum distributed in New Jersey schools advises teachers to "avoid graphic details or dramatizing the destruction" wrought by the 9/11 hijackers, and instead focus elementary school students' attention on broadly defined "intolerance" and "hurtful words."
But Michelle Malkin, and her fellow conservatives (and some liberals) are the ones who are drawing all the wrong lessons.
She is assuming that those (like myself and Ron Paul) who take the correct position that 9/11 came about because of our foreign policy of having troops in the Middle East, unconditional support for the State of Israel, and the continual bombing of Iraq are somehow "blaming America". First of all, we are not "blaming America"; we are placing the blame on the U.S. government's foreign policy of perpetual war and empire. Second, rarely does the U.S. government represent the American people. In fact, it has been determined to steal the liberties of the American people since 9/11 while euphemistically calling it "freedom".
So what motivated those terrible men to commit such a destructive act?
Said Osama Bin Laden:
It should not be hidden from you that the people of Islam had suffered from aggression, iniquity and injustice imposed on them by the Zionist-Crusaders alliance and their collaborators; to the extent that the Muslims blood became the cheapest and their wealth as loot in the hands of the enemies. Their blood was spilled in Palestine and Iraq. The horrifying pictures of the massacre of Qana, in Lebanon are still fresh in our memory. Massacres in Tajakestan, Burma, Cashmere, Assam, Philippine, Fatani, Ogadin, Somalia, Erithria, Chechnia and in Bosnia-Herzegovina took place, massacres that send shivers in the body and shake the conscience. All of this and the world watch and hear, and not only didn’t respond to these atrocities, but also with a clear conspiracy between the USA and its’ allies and under the cover of the iniquitous United Nations, the dispossessed people were even prevented from obtaining arms to defend themselves.
And in 1997 he said:
We declared jihad against the US government, because the US government is unjust, criminal and tyrannical. It has committed acts that are extremely unjust, hideous and criminal, whether directly or through its support of the Israeli occupation of the Prophet’s Night Travel Land.
Since there are more lengthy statements like this, I will give only one more, from Anwar al-Awlaki:
We are not against Americans for just being Americans. We are against evil and America as a whole has turned into a nation of evil. What we see from America is the invasion of [inaudible] countries, we see Abu Ghraib, Baghram and Guantanamo Bay, we see cruise missiles and cluster bombs and we have just seen in Yemen the death of 23 children and 17 women. We cannot stand idly in the face of such aggression and we will fight back and incite others to do the same. I for one was born in the U.S.; I lived in the U.S. for 21 years. America was my home. I was a preacher of Islam involved in non-violent Islamic activism. However, with the American invasion of Iraq and continued U.S. aggression against Muslims I could not reconcile between living in the U.S. and being a Muslim.
As James L. Payne has researched, when reading Bin Laden's published statements the "topic of imposing fundamentalist Muslim beliefs and practices on the West is essentially absent." Payne continues:
Bin Laden may be rigid and subjective in his perceptions, but his point of view is not without substance. Great Britain was the colonial master of many Muslim lands, including Egypt, Iraq, Jordan, and especially Palestine, which, with the approval of the United States, the British turned over to the Jews for the state of Israel in 1948. U.S. military aid and military advisors have blanketed the Middle East for generations. The U.S. military has bases in Djibouti, Qatar, Bahrain, Kuwait, and the United Arab Emirates. It sent troops to Lebanon twice, in 1958 and 1983, and to Somalia in 1992. The U.S. Sixth Fleet, with forty ships and twenty-one thousand servicemen and women, patrols the eastern Mediterranean, and the Fifth Fleet, with fifteen thousand personnel, patrols the Persian Gulf. Its Carrier Strike Group and Expeditionary Strike Group are poised to deliver military might anywhere throughout the region. This great show of military power may have achieved little in the way of domination, but to a local Muslim it can certainly look vicious and threatening. Furthermore, American leaders have proclaimed the goal of spreading the American conception of democracy to the world. The neoconservatives have frankly urged the U.S. government to use military force to carry out this goal (see, for example, Kristol and Kagan 1996; Frum and Perle 2003, 278). Some might say this talk about spreading democracy by force is empty rhetoric for the most part, but to the man on the street in the Middle East it can certainly look like an aggressive program to impose American social and cultural values on Muslim lands. Shortly after 9/11, Bush described his war on terrorism as a “crusade,” a point that bin Laden didn’t miss: “The odd thing about this is that he has taken the words right out of our mouth [that America is waging a crusade against Muslim lands]”
But many Americans do not want to admit this truth: that our foreign policy is a huge motivating factor for terrorism and terrorist attacks on U.S. soil. This is not to say that the events of 9/11 were justified. What happened on that tragic day was terrible and those who commit such acts of violence must be punished, but by the full force of the law, not by war and military domination.
Aggressive War and Empire
Jacob Hornberger gives us a quick summary of the imperial escapades that took place after 9/11:
First, it invaded Afghanistan and effected regime change there by ousting the Afghan government and installing a crooked, corrupt, fraudulent, brutal dictatorial regime that would do the bidding of the U.S. Empire.
Second, it invaded Iraq for the purpose of effecting the regime change there that the 11 years of deadly sanctions had failed to accomplish.
Third, it instituted a program of torture, assassination, indefinite detention, abuse, and humiliation of people from the Middle East.
Fourth, it embarked on a spending and borrowing spree that now threatens the government with bankruptcy. What changed was the nature of freedom in America. The U.S. government used the attacks to assume the same types of emergency powers that U.S.-supported dictators in the Middle East had been exercising for decades against their own people.
After the 9/11 attacks, the U.S. Congress passed the unconstitutional “Authorization for Use of Military Force” resolution for Afghanistan. By doing this, Congress illegally transferred its war powers to the President. According to Article 1, Section 8 of the U.S. Constitution, Congress has the power to “declare war”. But Congress did not declare war on Afghanistan, and would be unable to. The terrorists who committed the 9/11 attacks were not soldiers or agents from another nation-state. They were a stateless enemy. The best option for responding to the 9/11 attacks would have been to grant Letters of Marque and Reprisal, which would allow bounty hunters to go hunt down and capture Bin Laden and his lieutenants. This would have saved us billions and billions of dollars, not to mention hundreds if not thousands of American soldiers’ lives. But instead, President Bush unconstitutionally invaded Afghanistan on October 7, 2001. While U.S. and Northern Alliance forces quickly toppled the Taliban government, Osama Bin Laden escaped U.S. troops for the next 10 years.
The Taliban government did not attack the United States on 9/11. In fact, the U.S. government was sending millions of dollars to the Afghan government before 9/11. Now of course, we have showered countless amounts of money on our newfound subjects in Afghanistan.
Then there was Iraq. It wasn’t bad enough that our government was continually bombing that country for over 10 years while enforcing crippling economic sanctions that killed at least a half a million Iraqi children. Soon after 9/11, officials in the Bush administration like Vice President Dick Cheney soon began to beat the war drums and demand that the U.S. invade Iraq. In fact, there had been a desire to see the invasion of that country even before 9/11. The attacks only gave an excuse to see this desire implemented, and on March 19, 2003, the U.S. invaded Iraq. Once again an “Authorization for Use of Military Force” resolution was passed. So once again, the President circumvented the Constitution and unconstitutionally invaded another country.
Now the United States is engaged in 5 wars (Iraq, Afghanistan, Libya, Pakistan, and Yemen) with 2 more wars on the way (Syria, Iran).
The Costs of War
Anthony Gregory gives a quick summary of the costs of the wars the United States has been engaged in since 9/11:
Winslow Wheeler, Research Fellow at the Independent Institute and Director of the Straus Military Reform Project, stresses the need to look at everything: the post-9/11 military operations, the aid to governments like Iraq, Afghanistan, Pakistan and Yemen, the increased financial burden of domestic security, and the interest on deficit defense spending that financed these wars. He finds that "the federal costs already incurred would be from $3.2 to $3.9 trillion" -- even if the wars ended abruptly tomorrow. The scholars at the Eisenhower Study Group arrive at similar estimates.
We can also simply look at the effect on the defense budget over the last decade. Exorbitant Pentagon spending has always been touted as necessary to protect the country, yet ten years ago it was suddenly decided that this huge price tag was not nearly enough. Apparently all that defense and intelligence spending before 9/11, which failed to prevent the attack, was for something other than defense. In 2001, adjusted for inflation to today's dollars, the defense budget was just over $400 billion. After 9/11 the budget began rising at about eight percent a year. The latest funding request was for $707 billion. This doesn't include the ballooning security-related expenses in the Department of Homeland Security, State Department, or Department of Energy's nuclear weapon operations.
What was the full opportunity cost of all these wars? Few economists ask this question. What if these resources had been available for private savings and investment? What if the Americans and foreigners fighting had instead been working in the commercial sector, producing wealth? Perhaps the financial situation would look considerably better. The government is notorious for diverting money and energy from productive uses toward wasteful ones. Nothing is as destructive as war. Even the most just war imaginable is a disaster for the economy, as the great economist Ludwig von Mises explained.
Assaulting the Constitution and Liberty
Another consequence of the policies implemented by the U.S. government since 9/11 has been the loss of liberty here at home and the further burying of the American Republic.
Jacob Hornberger gives us a quick summary of the consequences of trading liberty for security since 9/11:
The military power to seize Americans and incarcerate, torture, and detain them indefinitely as “enemy combatants” in the war on terrorism. The power to spy on and monitor people’s email and telephone calls. The power to search people’s homes and financial institutions in secret. The power to grope people’s private parts at airports, including those of children. The Patriot Act. Guantanamo Bay. Kangaroo tribunals. Denial of due process.
Anthony Gregory asks whether or not our freedoms are actually being defended:
It doesn’t appear to be the First Amendment’s freedoms of speech and association. Otherwise it would be hard to explain the National Security Letters that forbid their recipients from telling anyone, even a lawyer or spouse, that the FBI is monitoring them. It would be difficult to understand the Bush administration’s “free speech zones” that kept war protesters far from presidential appearances, or U.S. spying on peace activists under both administrations. It would be perplexing that Obama would detain Bradley Manning for the crime of releasing incriminating information about the U.S. warfare state, or that his administration’s officials would hint that WikiLeaks’s project of exposing government wrongdoing should be shut down.
Maybe the government has mostly been protecting Americans’ right to be free from unreasonable searches and seizures. Then again, it would be confusing that both Bush and Obama would stand by the USA PATRIOT Act, which has eroded the Fourth Amendment, forced businesses to spy on their customers and hand information over to the Justice Department, loosened restrictions for wiretapping, and empowered agents to conduct special searches without alerting Americans right away that their property had been searched. It would also be a mystery why both Bush and Obama have stood by the National Security Administation’s power to spy on American telecommunications without a warrant. Then there is the whole question of the Transportation Security Administration, which summarily searches American airline passengers, their luggage, and their persons, forcing them to go through invasive pat-downs and potentially dangerous irradiating “porno-scanners.”
Perhaps the freedom being defended is the long-celebrated right to due process and habeas corpus for those detained by the government. That would be hard to reconcile, however, with the Bush administration’s roundup of hundreds of innocent aliens right after 9/11, the “material witness” doctrine that allowed for indefinite detention without charge, or the “enemy combatant” designation that, when pinned on someone by the president, even on a U.S. citizen, means there will be a total disregard for traditional due process. It would certainly make a puzzle out of Guantanamo, where some detainees have been determined innocent of all wrongdoing but are nevertheless kept detained; and it would be hard to make sense of the military commissions that deprive subjects of both the standard protections of criminal suspects or those of prisoners of war. The secret evidence used in many cases in the last ten years certainly seems to be in tension with the right to confront one’s accuser and the evidence laid against one. And Obama’s very concept of “prolonged detention” and his administration’s fighting the courts on numerous habeas corpus cases are a little bit of an enigma if indeed the right to due process is what our leaders have in mind when they’re waging these wars for our freedoms.
Maybe it’s the right not to be subject to cruel and unusual punishment that Bush and Obama have been defending! Although that would seem to be in conflict with the mistreatment of whisteblower Bradley Manning, the abuse that continues at Guantanamo, the waterboarding of Khalid Sheikh Mohammed, and the psychological and sexual abuse that became a regular interrogation practice throughout Iraq and other U.S.-controlled areas at the height of the war on terror.
Other freedoms that haven’t seemed to be enhanced, much less defended by the war on terrorism, include the right to travel, financial freedom, the right to bear arms, and the right to a fair civil proceeding against government agents who have violated one’s liberties. Economic freedom hasn’t exactly blossomed since 9/11. Come to think of it, most of the freedoms that have been held as sacred for so long in this country aren’t exactly easy targets for terrorists to undermine in the first place; free speech, due process, privacy, and other such civil liberties are much easier for governments to compromise than for terrorists to take away.
Conclusion
We as Americans need to ask ourselves these questions as we reflect on 9/11: should we ever trade liberty for security? Should the Federal government disobey the Constitution, even in times of war? Should the U.S. be engaged in perpetual war for perpetual peace? What if our foreign policy of the past century has been deeply flawed and has not served to defend this country? What if we finally realize that terrorism is a predictable and unfortunate consequence of a foreign policy of empire and interventionism and has nothing to do with us being free and prosperous?
We need to ask ourselves these questions and contemplate changing the policies that the Federal government has enacted since 9/11. Failure to do so will mean the end of peace, liberty, the Constitution and the American Republic.
Saturday, September 10, 2011
Ron Paul: What if?
This 9/11, instead of participating and promoting un-American ideas such as nationalism, jingoism, blind obedience to government, increased government surveillance of American citizens, violations of civil liberties, the destruction of the U.S. Constitution, and unjust, unnecessary and costly wars of aggression, we should take the ideas of Congressman Ron Paul, the Founding Fathers and other defenders of liberty seriously. We should stop blindly waving the American flag and chanting “USA! USA! USA! USA!” (though it is proper to display a flag in honor of those who died) and instead pray for renewed blessings and comfort for those who suffered loss on that tragic day. Please watch this amazing speech and ponder the questions asked in the video.
Thursday, September 8, 2011
In Honor of 9/11...
I have some recommendations for reading that all American need to look into. Like other episodes in American history, 9/11 and its' aftermath is a prime case of crisis and leviathan in which the government exploits a crisis like an economic downturn or war to gain more power over the people at the expense of the liberties of the people.
Books:
Crisis and Leviathan: Critical Episodes in the Growth of American Government by Robert Higgs
The Empire Has No Clothes: U.S. Foreign Policy Exposed by Ivan Eland
Resurgence of the Warfare State: The Crisis Since 9/11 by Robert Higgs
Opposing the Crusader State: Alternatives to Global Interventionism by Robert Higgs and Carl P. Close
The Costs of War: America's Phyrric Victories by John V. Denson
Liberty, Security, and the War on Terrorism by Jacob G. Hornberger and Richard M. Ebeling
Books:
Crisis and Leviathan: Critical Episodes in the Growth of American Government by Robert Higgs
The Empire Has No Clothes: U.S. Foreign Policy Exposed by Ivan Eland
Resurgence of the Warfare State: The Crisis Since 9/11 by Robert Higgs
Opposing the Crusader State: Alternatives to Global Interventionism by Robert Higgs and Carl P. Close
The Costs of War: America's Phyrric Victories by John V. Denson
Liberty, Security, and the War on Terrorism by Jacob G. Hornberger and Richard M. Ebeling
Sunday, September 4, 2011
Happy Capital Day!
By Lawrence W. Reed
Capital without labor means machines with no operators, or financial resources without the manpower to invest in. Labor without capital looks like Haiti or North Korea: plenty of people working but doing it with sticks instead of bulldozers, or starting a small enterprise with pocket change instead of a bank loan.
There may be no place in the world where there’s a shortage of labor but every inch of the planet is short of capital. There is no worker who couldn’t become more productive and better himself and society in the process if he had a more powerful labor-saving machine or a little more venture capital behind him. Capital can refer to either the tools of production or the funds that finance them. It ought to be abundantly clear that the vast improvement in standards of living over the past century is not explained by physical labor (we actually do less of that), but rather to the application of capital.
This is not class warfare. I’m not “taking sides” between labor and capital. I don’t see them as natural antagonists in spite of some people’s attempts to make them so. Don’t think of capital as something possessed and deployed only by bankers, the college-educated, the rich, or the elite. We workers of all income levels are “capital-ists” too—every time we save and invest, buy a share of stock, fix a machine, or start a business.
And yet, we have a “Labor Day” in America but not a “Capital Day.”
Like most Americans, I’ve traditionally celebrated labor on Labor Day weekend—not organized labor or compulsory labor unions, mind you, but the noble act of physical labor to produce the things we want and need. Nothing at all wrong about that!
But this year on Labor Day weekend, I’ll also be thinking about the remarkable achievements of inventors of labor-saving devices, the risk-taking venture capitalists who put their own money (not your tax money) on the line and the fact that nobody in America has to dig a ditch with a spoon or cut his lawn with a knife. Labor Day and Capital Day—I don’t know why we should have just one and not the other.
Happy Capital Day, America!
Lawrence W. Reed
(A special thanks to Lawrence W. Reed and the Foundation for Economic Education for such a good little article!)
Saturday, September 3, 2011
Read this book!!!
I have been getting into debates here in college lately, and I figured that sometimes it is good to get back to first principles. For those who do not fully understand my views, or wonder what a libertarian constitutionalist believes, then I highly recommend reading Congressman Ron Paul's book Freedom Under Seige: The U.S. Constitution after 200 Plus Years. You can read it for free here. It was written in 1987 on the 200th anniversary of the signing of the U.S. Constitution, but it was written in a fashion the describes pretty much what is happening today.
The Failure of Disaster Relief Socialism
"The federal government has trumpeted its ability to intervene during disasters and in times of emergency but, more often than not, the result is an explosion of federal power, wasted resources, frustrating red tape, and not much else." -Judge Andrew Napolitano
As Hurricane Irene hits the east coast of the United States, Americans are continually reminded by the media of the great importance of institutionalized governmental disaster relief programs to society and how Americans just could not survive without these programs. Then, when people, especially libertarians like Ron Paul advocate abolishing government agencies like FEMA, people lose their minds because they have become so dependent of the government for their lively hoods.
But is government disaster relief a good thing? Many people would answer in the affirmative. Or is it an inefficient system of bureaucratic socialism that fails to help the people, robs other people of their wealth, and expands the power of the state?
As William F. Shughart II explains:
the public sector predictably fails to supply disaster relief in socially optimal quantities. Moreover, because it facilitates corruption, creates incentives
for populating disaster-prone areas, and crowds out self-help and other local means of coping with disaster, government provision of assistance to disaster’s victims actually threatens to make matters worse.
Looking back on the debacle of Hurrican Katrina, Shughart's concerns seem to be correct. As Lew Rockwell documented:
Consider first how the much-glorified Department of Homeland Security responded to the Katrina crisis. There is a mysterious missing day between the time the hurricane hit and the levees broke and flooded New Orleans. During this strange Monday, August 29 — a day in which there was a window of opportunity to prevent the meltdown of civilization — why didn't federal officials respond or even pretend to respond?
The head of the Department of Homeland Security, Michael Chertoff, said that he read in the Tuesday morning newspaper that, according to the headline, "New Orleans Dodged the Bullet." So, to his mind, there was nothing to do. This was his testimony. This is not exactly an awe-inspiring admission, but it speaks to a truth that few are willing to admit: government officials live normal lives. They do not partake of the mind of God. They get their news just like you and me. And they have far less information than the body of knowledge generated by the signaling process of the market economy and the private sector.
We might even say that they are in effect sub-normal in intelligence, because government officials stand outside of society, cut off from normal channels of information that the rest of us take for granted. They are isolated from markets and the regular pressures of life. They are not owners of what they control, and have no real stake in the value of their product. They are surrounded by some of the most peculiar people in the world, namely lifetime bureaucrats, power-mad politicians, and lobbyists on the make. This is their world and this is what they know.
Now, they enjoy the illusion of being better informed than the rest of us, so it would never occur to a high official to surf Google News to find out what is really going on. Thus was it apparently beyond the capacity of FEMA to find out that the National Weather Service had issued a flood warning soon after the hurricane hit. The National Weather Service in turn was only reporting what many private local media outlets were saying.
As Hurricane Irene hits the east coast of the United States, Americans are continually reminded by the media of the great importance of institutionalized governmental disaster relief programs to society and how Americans just could not survive without these programs. Then, when people, especially libertarians like Ron Paul advocate abolishing government agencies like FEMA, people lose their minds because they have become so dependent of the government for their lively hoods.
But is government disaster relief a good thing? Many people would answer in the affirmative. Or is it an inefficient system of bureaucratic socialism that fails to help the people, robs other people of their wealth, and expands the power of the state?
As William F. Shughart II explains:
the public sector predictably fails to supply disaster relief in socially optimal quantities. Moreover, because it facilitates corruption, creates incentives
for populating disaster-prone areas, and crowds out self-help and other local means of coping with disaster, government provision of assistance to disaster’s victims actually threatens to make matters worse.
Looking back on the debacle of Hurrican Katrina, Shughart's concerns seem to be correct. As Lew Rockwell documented:
Consider first how the much-glorified Department of Homeland Security responded to the Katrina crisis. There is a mysterious missing day between the time the hurricane hit and the levees broke and flooded New Orleans. During this strange Monday, August 29 — a day in which there was a window of opportunity to prevent the meltdown of civilization — why didn't federal officials respond or even pretend to respond?
The head of the Department of Homeland Security, Michael Chertoff, said that he read in the Tuesday morning newspaper that, according to the headline, "New Orleans Dodged the Bullet." So, to his mind, there was nothing to do. This was his testimony. This is not exactly an awe-inspiring admission, but it speaks to a truth that few are willing to admit: government officials live normal lives. They do not partake of the mind of God. They get their news just like you and me. And they have far less information than the body of knowledge generated by the signaling process of the market economy and the private sector.
We might even say that they are in effect sub-normal in intelligence, because government officials stand outside of society, cut off from normal channels of information that the rest of us take for granted. They are isolated from markets and the regular pressures of life. They are not owners of what they control, and have no real stake in the value of their product. They are surrounded by some of the most peculiar people in the world, namely lifetime bureaucrats, power-mad politicians, and lobbyists on the make. This is their world and this is what they know.
Now, they enjoy the illusion of being better informed than the rest of us, so it would never occur to a high official to surf Google News to find out what is really going on. Thus was it apparently beyond the capacity of FEMA to find out that the National Weather Service had issued a flood warning soon after the hurricane hit. The National Weather Service in turn was only reporting what many private local media outlets were saying.
As with Katrina, there is hysteria about "price-gouging" since Irene hit the East Coast. As Lew Rockwell further points out:
As the Hurricane approached, for example, Mr. Bush, along with nearly every office holder in the entire region, immediately announced that there would be no tolerance of so-called price gouging. What is and what is not gouging remain #ff0000 by law, but there are still criminal penalties attached to doing it. If you raise your prices to the point where you attract a complaint, there is a good chance that you will be thrashed as a gouger.
And yet, we have to ask ourselves what the purpose of a price is. It is a signaling device that allows market players, including both producers and consumers, to adjust their economic behavior in light of supply and demand. If supply remains the same and demand rises, the price too will have to rise so the market can clear properly. Otherwise there will be shortages and surpluses that will prove to be a benefit to no one. William Anderson has called gouging rules a form of back-door price control, and he is right. They create victims, encourage economic dislocations, and foster black markets.
One might think that a Republican administration would understand this, but reflect on the fact that Iraq still has very strict price controls on gasoline, controls that were instituted by the US after Saddam was overthrown. Don't think for a minute that it is beyond the capacity of the Bush administration to do what the Nixon administration did, which was to believe that the laws of markets can be overridden by regulatory force.
Anti-gouging laws, to the extent they are obeyed, will create shortages. But in telling the sad tale of Katrina, I would like to begin not with a case of shortage, but with a strange case of surplus.
Jacob Hornberger reports that,
North Carolina Attorney General Roy Cooper announced that he would prosecute anybody engaging in price-gouging during Hurricane Irene. Cooper declared, “We’re warning price gougers that you can’t use a crisis as an excuse to make an unfair profit off of consumers. If you think that someone is trying to use Hurricane Irene to justify ripping you off, let my office know about it.”
It’s enough to make you wish that American law schools offered courses in Austrian economics.
Hornberger continues:
What people like Cooper fail to understand is that the price system is simply the free-market’s method of communication. Prices impart valuable information to both producers and consumers that enable them to make rational economic decisions. When the government tampers with the price system by setting maximum prices or prosecuting “price gougers,” it mucks up the communication system on which people are relying.
Let’s take a hypothetical example. Let’s say that a hurricane hits the Outer Banks in North Carolina and that people are desperately in need of ice on the islands. One store has 50 bags of ice on hand. Immediately, it raises its price from $5 a bag to $25 a bag.
Now, we all know what Attorney General Cooper would do. He’d start screaming like a banshee and sending out state troopers to make an arrest.
Actually, however, that’s the worst thing that Cooper could do.
When the price of ice soars, it communicates valuable information to consumers on the island. The new, higher price says to them: You need to conserve your use of ice.
At the same time, the new, higher price imparts valuable information to producers on the mainland: You need to produce more.
There is so much detail about the disaster of governmental efforts to help in disaster relief that I implore you to read the articles that I linked to above.
Free-market economist Walter Block has some simple solutions for the problems here
As the Hurricane approached, for example, Mr. Bush, along with nearly every office holder in the entire region, immediately announced that there would be no tolerance of so-called price gouging. What is and what is not gouging remain #ff0000 by law, but there are still criminal penalties attached to doing it. If you raise your prices to the point where you attract a complaint, there is a good chance that you will be thrashed as a gouger.
And yet, we have to ask ourselves what the purpose of a price is. It is a signaling device that allows market players, including both producers and consumers, to adjust their economic behavior in light of supply and demand. If supply remains the same and demand rises, the price too will have to rise so the market can clear properly. Otherwise there will be shortages and surpluses that will prove to be a benefit to no one. William Anderson has called gouging rules a form of back-door price control, and he is right. They create victims, encourage economic dislocations, and foster black markets.
One might think that a Republican administration would understand this, but reflect on the fact that Iraq still has very strict price controls on gasoline, controls that were instituted by the US after Saddam was overthrown. Don't think for a minute that it is beyond the capacity of the Bush administration to do what the Nixon administration did, which was to believe that the laws of markets can be overridden by regulatory force.
Anti-gouging laws, to the extent they are obeyed, will create shortages. But in telling the sad tale of Katrina, I would like to begin not with a case of shortage, but with a strange case of surplus.
Jacob Hornberger reports that,
North Carolina Attorney General Roy Cooper announced that he would prosecute anybody engaging in price-gouging during Hurricane Irene. Cooper declared, “We’re warning price gougers that you can’t use a crisis as an excuse to make an unfair profit off of consumers. If you think that someone is trying to use Hurricane Irene to justify ripping you off, let my office know about it.”
It’s enough to make you wish that American law schools offered courses in Austrian economics.
Hornberger continues:
What people like Cooper fail to understand is that the price system is simply the free-market’s method of communication. Prices impart valuable information to both producers and consumers that enable them to make rational economic decisions. When the government tampers with the price system by setting maximum prices or prosecuting “price gougers,” it mucks up the communication system on which people are relying.
Let’s take a hypothetical example. Let’s say that a hurricane hits the Outer Banks in North Carolina and that people are desperately in need of ice on the islands. One store has 50 bags of ice on hand. Immediately, it raises its price from $5 a bag to $25 a bag.
Now, we all know what Attorney General Cooper would do. He’d start screaming like a banshee and sending out state troopers to make an arrest.
Actually, however, that’s the worst thing that Cooper could do.
When the price of ice soars, it communicates valuable information to consumers on the island. The new, higher price says to them: You need to conserve your use of ice.
At the same time, the new, higher price imparts valuable information to producers on the mainland: You need to produce more.
There is so much detail about the disaster of governmental efforts to help in disaster relief that I implore you to read the articles that I linked to above.
Free-market economist Walter Block has some simple solutions for the problems here
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