Hagel’s ‘Defense Cuts’ Are Smoke And Mirrors

Last week Defense Secretary Chuck Hagel proposed an additional 40,000 reduction in active duty U.S. Army personnel, down to 450,000 soldiers. As U.S. troops are being withdrawn from the recent wars in Afghanistan and Iraq, it might make sense to reduce not only the active duty military but the entire military budget. However, from the interventionists’ reaction to Hagel’s announcement you might think President Obama announced he was shutting down the Pentagon!

Representative Michael McCaul, Chairman of the House Homeland Security Committee, claimed that this slight reduction in personnel would hurt our military readiness. He blamed the exploding spending on welfare entitlements for the proposed military cuts, stating, “It’s all being sacrificed … on the altar of entitlements. This President cannot take on mandatory spending, so all we’ve done in the Congress – and this President – is basically cut discretionary spending.”

McCaul is partly right. Welfare spending is bankrupting the country. But military spending is also welfare: it is welfare for the well-connected military-industrial complex, which enriches itself manufacturing useless boondoggles like the F-35 fighter. We should never confuse legitimate defense spending – which I support – with military spending, which promotes interventionism overseas and actually undermines our national security.

Neoconservative Senators Lindsey Graham and John McCain were also quick to criticize Hagel’s announcement. They said the cuts were dead on arrival in the U.S. Senate. “We are going to kill it, not let it happen,” said Graham. McCain added, “We live in an ever-increasingly dangerous world and this budget is out of touch with reality.”

What McCain and Graham won’t admit is that much of the reason we are in an increasingly-dangerous world is that the neocons keep inviting blowback with the interventions they are constantly pushing. If we minded our own business we would live in a far less dangerous world.

Nevertheless, although the neocons make a big deal about this small cut in military personnel, in reality these are not military cuts at all. These are token proposed cuts in troop levels which Congress won’t allow the administration to do anyway. What Hagel proposes is not cuts, but instead a shift in spending away from personnel and toward new high-tech weapons which are favored by and profitable to the military-industrial complex.

The F-35, for example, will continue in production according to Hagel’s plan, despite the numerous cost over-runs and design flaws. This is likely because the F-35 is built in 46 U.S. States and nine foreign countries! That makes it particularly popular in Congress, regardless of its flaws and expense.

We do need real cuts in military spending, not just moving spending around from troops to new weapons systems. But what we really need is for the President to downsize U.S. foreign policy. Maintaining a military presence in 140 countries while continuing to stir up trouble can lead to problems when the military is downsized. So, it’s our intervention that needs downsizing.

A proper foreign policy would mean a strong national defense, but a huge reduction in interventions and commitments overseas. Why are we stirring up trouble in Ukraine? In Syria? In Africa? Why are we defending South Korea and Japan when they are wealthy enough to defend themselves? A proper sized foreign policy would defend the United States instead of provoking the rest of the world.

Ron Paul Straight Talk: Let’s Leave Ukraine Alone!

Last week Ukraine saw its worst violence since the break-up of the Soviet Union over 20 years ago. Protesters occupying the main square in the capitol city, Kiev, clashed with police leaving many protesters and police dead and many more wounded. It is an ongoing tragedy and it looks like there is no end in sight.

The current conflict stems from a divide between western Ukraine, which seeks a closer association with the European Union; and the eastern part of the country, which has closer historic ties to Russia.

The usual interventionists in the U.S. have long meddled in the internal affairs of Ukraine. In 2003 it was U.S. government money that helped finance the Orange Revolution, as U.S.-funded NGOs favoring one political group over the other were able to change the regime. These same people have not given up on Ukraine. They keep pushing their own agenda for Ukraine behind the scenes, even as they ridicule anyone who claims U.S. involvement.

A recent leaked telephone conversation between two senior government officials made it clear that not only was the U.S. involved in the Ukrainian unrest, the U.S. was actually seeking to determine who should make up the next Ukrainian government!

Senator John McCain, who has made several trips to Ukraine recently to meet with the opposition, wrote last week that the U.S. must stand up to support the territorial integrity of Ukraine, including Crimea.

Why are U.S. government officials so eager to tell the Ukrainians what they should do? Has anyone bothered to ask the Ukrainians? What if it might help alleviate the ongoing violence and bloodshed if the Ukrainians decide to re-make the country as a looser confederation of regions rather than one tightly controlled by a central government? Perhaps Ukraine engaged in peaceful trade with countries both to the west and east would benefit all sides. But outside powers seem to be fighting a proxy war, with Ukraine suffering the most because of it.

If you asked most Americans how they feel, my bet is that you would discover they are sick and tired of the U.S. government getting involved in every crisis that arises. Certainly the American people want none of of this intervention in Ukraine. They understand, as recent polls have shown, that our interventionist foreign policy is only creating more enemies overseas. And they also understand that we are out of money. We could not afford to be the policemen of world even if we wanted to be.

And I bet if we asked the Ukrainians, a vast majority of them would prefer that the U.S. — and Russia and the European Union — stay out their affairs and respect their sovereignty. Is it so difficult to understand why people resent being lectured and bribed by foreign governments? All we need to do is put ourselves in the place of the Ukrainians and ask ourselves how we would feel if we were in the middle of a tug-of-war between a very strong Canada on one side and a very strong Mexico on the other. We would resent it as well. So let’s keep our hands off of Ukraine and let them solve their own problems!

Ron Paul Straight Talk: At The Fed, The More Things Change, The More They Stay The Same

Last week, Federal Reserve Chairman Janet Yellen testified before Congress for the first time since replacing Ben Bernanke at the beginning of the month. Her testimony confirmed what many of us suspected, that interventionist Keynesian policies at the Federal Reserve are well-entrenched and far from over. Yellen practically bent over backward to reassure Wall Street that the Fed would continue its accommodative monetary policy well into any new economic recovery. The same monetary policy that got us into this mess will remain in place until the next crisis hits.

Isn’t it amazing that the same people who failed to see the real estate bubble developing, the same people who were so confident about economic recovery that they were talking about “green shoots” five years ago, the same people who have presided over the continued destruction of the dollar’s purchasing power never suffer any repercussions for the failures they have caused? They treat the people of the United States as though we were pawns in a giant chess game, one in which they always win and we the people always lose. No matter how badly they fail, they always get a blank check to do more of the same.

It is about time that the power brokers in Washington paid attention to what the Austrian economists have been saying for decades. Our economic crises are caused by central bank infusions of easy money into the banking system. This easy money distorts the structure of production and results in malinvested resources, an allocation of resources into economic bubbles and away from sectors that actually serve consumers’ needs. The only true solution to these burst bubbles is to allow the malinvested resources to be liquidated and put to use in other areas. Yet the Federal Reserve’s solution has always been to pump more money and credit into the financial system in order to keep the boom period going, and Yellen’s proposals are no exception.

Every time the Fed engages in this loose monetary policy, it just sows the seeds for the next crisis, making the next crash even worse. Look at charts of the Federal funds rate to see how the Fed has had to lower interest rates further and longer with each successive crisis. From 6 percent, to 3 percent, to 1 percent, and now the Fed is at zero. Some Keynesian economists have even urged central banks to drop interest rates below zero, which would mean charging people to keep money in bank accounts.

Yellen understands how ludicrous negative interest rates are, and she said as much in her question-and-answer period last week. But that zero lower rate means the Fed has had to resort to unusual and extraordinary measures: quantitative easing. As a result, the Fed now sits on a balance sheet equivalent to nearly 25 percent of U.S. gross domestic product, and is committing to continuing to purchase tens of billions more dollars’ of assets each month.

When will this madness stop? Sound economic growth is based on savings and investment, deferring consumption today in order to consume more in the future. Everything the Fed is doing is exactly the opposite, engaging in shortsighted policies in an attempt to spur consumption today, which will lead to a depletion of capital, a crippling of the economy and the impoverishment of future generations. We owe it not only to ourselves, but to our children and our grandchildren, to rein in the Federal Reserve and end once and for all its misguided and destructive monetary policy.

Ron Paul Straight Talk: Will No One Challenge Obama’s Executive Orders?

President Obama’s State of the Union pledge to “act with or without Congress” marks a milestone in Presidential usurpation of Congressional authority. Most modern Presidents have used executive orders to change and even create laws without Congressional approval. However President Obama is unusually brazen, in that most Presidents do not brag about their plans to rule by executive order in State of the Union speeches.

Sadly, his pledge to use his pen to implement laws and polices without the consent of Congress not only received thunderous applause from representatives of the President’s party, some Representatives have even pledged to help Obama get around Congress by providing him with ideas for executive orders. The Constitution’s authors would be horrified to see legislators actively adding and abetting a President taking power away from the Legislature.

Executive orders are perfectly legitimate and even necessary if, in the words of leading Constitutional Scholar Judge Andrew Napolitano, they “…. guide the executive branch on how to enforce a law or…complement and supplement what Congress has already done.” The problem is that most modern Presidents have abused this power to issue orders that, as Judge Napolitano puts it, “restates Federal law, or contradicts Federal law, or does the opposite of what the Federal law is supposed to do.”

Political opponents of the president rightly condemned Obama for disregarding the Constitution. However, it was not that long ago that many of the same politicians where labeling as “unpatriotic” or worse anyone who dared question President Bush’s assertions the he had the “inherent” authority to launch wars, spy on Americans, and even indefinitely detain American citizens.

Partisan considerations also make some members of the opposition party hesitate to reign in the President. These members are reluctant to set a precedent of “tying the President’s hands” that could be used against a future President of their own party.

The concentration of power in the office of the President is yet one more negative consequence of our interventionist foreign policy. A foreign policy based on interventionism requires a strong and energetic executive, unfettered by Constitutional niceties such as waiting for Congress to pass laws or declare war. So it simply was natural, as America abandoned the traditional foreign policy of non-interventionism, for Presidents to act “without waiting for Congress.” After all, the President is “commander-in-chief” and he needs to protect “national security,” they argued. Once it became accepted practice for the President to disregard Congress in foreign affairs, it was only a matter of time before Presidents would begin usurping Congressional authority in domestic matters.

It should not be surprising that some of the biggest promoters of an “energetic” executive are the neoconservatives. They are also enthusiastic promoters of the warfare state. Sadly, they have misled many Constitutionalists into believing that one can consistently support unchecked Presidential authority in foreign policy, but limit Presidential authority in domestic matters. Until it is fully understood that virtually limitless Presidential authority in foreign affairs cannot coexist with strict limits on Presidential authority in domestic matters, we will never limit the power of the Presidency.

The people must also insist that politicians stop viewing issues concerning the separation of powers through a partisan lens and instead be willing to act against any President who exceeds his Constitutional limitations. Thankfully we have scholars such as Louis Fisher, who has just published an important new book on Presidential power, to help us better understand the Founders’ intent with regard to separation of powers. The key to achieving this goal is to make sure the people understand that any President of any party who would exceed Constitutional limitations is a threat to liberty, and any member of Congress who ignores or facilitates Presidential usurpation is being derelict in his Constitutional duty.

Ron Paul Straight Talk: The Continuing Al-Qaida Threat

Appearing last week before the Senate Intelligence Committee, Director of National Intelligence James Clapper testified that he could not say the threat from al-Qaida is any less today than it was ten years ago. It was a shocking admission. Does he mean that the trillions of dollars spent fighting the war on terrorism have resulted in no gains? That those who urged us to give up some of our liberties to gain security have, as Benjamin Franklin warned, lost both?

There may be reasons Director Clapper would want us to believe that the threat from al-Qaida is as strong as ever. An entire industry has arisen from the government’s war on terror, and for both the government sector and the security-industrial complex the terrorist threat is big business. Economic pressure has thus far not affected the military or intelligence sectors – despite false claims that the sequestration cut military spending. However, emphasizing continued high threat levels without being able to openly explain them due to secrecy requirements is one way to keep the security budget untouched.

Also, emphasizing the continued high threat level from terrorists overseas is a good way to frighten citizens away from their increasing outrage over reports of massive domestic spying by the NSA. Unfortunately Americans may still be more willing to give up their liberties if they are told that the threats to their security remain as high as ever.

What if Clapper is telling us the truth, however? What would this revelation mean if that is the case?

For one, it means that we have gotten very little for the tremendous amount of spending on the war on terrorism and the lives lost. We are told that the military and intelligence community can protect us if they are given the tools they need, but it appears they have not done a very good job by their own admission.

More likely, it may mean that the US government’s policies are causing more al-Qaida groups to arise and take the place of those who have been defeated by US drone and military attacks. Clapper does mention that there are so many different al-Qaida franchises popping up it is difficult to keep track of them all, much less defeat them. But why is that? A former State Department official stated last year that every new drone strike in Yemen that kills innocent people results in the creation of 40-60 new enemies. Likewise, the young girl from Pakistan who had been brutally shot by the Taliban for her desire to go to school told President Obama during a White House meeting that “drone attacks are fueling terrorism. Innocent victims are killed in these acts, and they lead to resentment among the Pakistani people.”

Are there more al-Qaida groups out there because our policies keep creating new ones?

On that point, Clapper said to the Senate that in Syria the al-Qaida affiliated al-Nusra Front “does have aspirations for attacks on the homeland.” It is all the more disturbing, then, to have also read last week that Congress voted in secret to resume sending weapons to the Syrian rebels, who are dominated by al-Qaida-affiliated groups. We have read about US-supplied weapons meant for “moderates” in Syria being seized by radicals on several occasions, and the Voice of America reported last year that our Saudi “allies” are arming the same al-Nusra Front that Clapper identifies as a threat to the US. Is the US Congress arming the very people who will commit the next attack on US soil?

Why is al-Qaida as much a threat as it was ten years ago? Perhaps it is that we continue to fight the wrong war in the wrong manner. Perhaps because we refuse to consider that many overseas are angry because of our government’s policies and actions. After ten years of no progress, is it not time to try something new? Is it not time to try non-intervention and a strong defense rather than drone strikes and pre-emptive attacks?

Ron Paul Straight Talk: Every Week Should Be School Choice Week

National School Choice week takes place from January 26 to February 1, and during this week education freedom activists around the country will be participating in events highlighting the need for parental control of education. I wholeheartedly endorse National School Choice Week, as parental control of education is a prerequisite for a free and prosperous society.

When government usurps control of education from parents, education can easily become indoctrination. Centralized, top-down models of education are also doomed to failure as there is no way a bureaucrat in D.C. can design an education system capable of meeting the needs of every child in the country. The failure of centralized education is shown by the correlation between American students’ declining tests scores and the growth of Federal control over American schools. Education reforms that further, or expand, the Department of Education will prove fruitless. The only effective education reform is to restore parental control over education.

The key to restoring parental control is to give parents back control over the education dollar. This means shutting down the Department of Education and returning the money currently spent promoting schemes like “common core”. Ideally, this would be accomplished by eliminating all Federal taxes on American families. However, if the political support for outright abolition of Federal taxes is not available, education tax credits can also serve as an effective way of getting control over education back into the hands of the people. Unlike taxpayer-funded vouchers, private tax credits do not open the door to government control of education. This is because tax credits allow parents to use their own money on their children’s education, rather than relying on funds provided by the Federal government. Since “he who pays the piper calls the tune,” Federal funding of education—whether in the form of Federal grants or taxpayer-funded vouchers—inevitably means schools will spend more time trying to please Federal bureaucrats than parents.

One educational model that I am particularly interested in is homeschooling. Many of the most devoted and most effective advocates of liberty I have worked with come from homeschooling families. This might be because many homeschooling families have personal experience with government harassment, ranging from having to comply with government regulations to being threatened with the loss of their children for the “crime” of homeschooling. It is ironic that government would attempt to force homeschoolers to conform to its regulations considering that homeschoolers constantly out-perform their public school-educated peers.

In order to encourage the growth of homeschooling I have developed my own homeschool curriculum. The Ron Paul Curriculum consists of a rigorous program of study in history, economics, mathematics, and the physical and natural sciences.

Older students will also have the opportunity to get practical experience creating and running their own on-line businesses. Frequent written assignments will ensure students have the maximum opportunity to develop strong communication skills.

Giving my strong belief in liberty, the history and economics curriculum will provide a good grounding in liberty, including the principles of Austrian Economics. However, the drafters of the curriculum took great care to never sacrifice intellectual rigor and accuracy.

Education is one of those things that is simply too important to be left to the government. The best way to ensure quality education is to ensure that parents have the ability to pick the education option that best fits their child’s unique needs and abilities. Everyone who wishes to see America remain a free and prosperous society has an interest in parental control of education.

Ron Paul’s Straight Talk: Warfare, Welfare, Wonder Woman

Supporters of warfare, welfare and Wonder Woman cheered last week as Congress passed a $1 trillion “omnibus” appropriation bill. This legislation funds the operations of government for the remainder of the fiscal year. Wonder Woman fans can cheer that buried in the bill was a $10,000 grant for a theater program to explore the comic book heroine.

That is just one of the many outrageous projects buried in this 1,582-page bill. The legislation gives the Department of Education more money to continue nationalizing education via “common core.” Also, despite new evidence of Obamacare’s failure emerging on an almost daily basis, the Omnibus bill does nothing to roll back this disastrous law.

Even though the Omnibus bill dramatically increases government spending, it passed with the support of many self-described “fiscal conservatives.” Those wondering why anyone who opposes increasing spending on programs like common core and Obamacare would vote for the bill, may find an answer in the fact that the legislation increases funding for the “Overseas Continuing Operations” — which is the official name for the war budget — for the first time since 2010. This $85 billion war budget contains $6 billion earmarked for projects benefiting Boeing, Lockheed-Martin and other big defense contractors.

Ever since “sequestration” went into effect at the beginning of last year, the military-industrial complex’s Congressional cheering session has complained that sequestration imposed “draconian cuts” on the Pentagon that will “decimate” our military — even though most of the “cuts” were actually reductions in the “projected rate of growth.” In fact, under sequestration, defense spending was to increase by 18 percent over 10 years, as opposed to growing by 20 percent without sequestration.

Many of the defenders of increased war spending are opponents of welfare, but they are willing to set aside their opposition to increased welfare spending in order to increase warfare spending. They are supported in this position by the lobbyists for the military-industrial complex and the neoconservatives, whose continued influence on foreign policy is mystifying. After all, the neocons were the major promoters of the disastrous military intervention in Iraq.

While many neocons give lip service to limiting domestic spending, their main priority remains protecting high levels of military spending to maintain an interventionist foreign policy. The influence of the neocons provides intellectual justification for politicians to vote for ever-larger military budgets — and break the campaign promises to vote against increases in spending and debt.

Fortunately, in recent years more Americans have recognized that a constant defense of liberty requires opposing both war and welfare. Many of these Americans, especially the younger ones, have joined the intellectual and political movement in favor of limiting government in all areas. This movement presents the most serious challenge the bipartisan welfare-warfare consensus has faced in generations. Hopefully, the influence of this movement will lead to bipartisan deals cutting both welfare and warfare spending.

The question facing Americans is not whether Congress will ever cut spending. The question is: Will the spending be reduced in an orderly manner that avoids inflecting massive harm on those depending on government programs, or will spending be slashed in response to an economic crisis caused by ever-increasing levels of deficit spending? Because politicians are followers rather than leaders, it is ultimately up to the people what course we will take. This is why it is vital that those of us who understand the dangerous path we are currently on do all we can to expand the movement for liberty, peace and prosperity.

Congress Defers to President On NSA Reform

Congress’ decline from the Founders’ vision as “first among equals” in government to an echo chamber of the unitary executive, has been a slow but steady process. In the process we have seen a steady stream of unConstitutional wars and civil liberties abuses at home. Nowhere is this decline more evident than in the stark contrast between the Congressional response to intelligence agencies’ abuses during the post-Watergate era and its response to the far more serious National Security Agency abuses uncovered in recent years.

In 1975, Senator Frank Church (D-Idaho) convened an historic select committee to investigate the U.S. intelligence services for possible criminality in the wake of Watergate. Thanks in part to reporting by Seymour Hersh and others, abuses by the CIA, NSA and FBI had come to light, including the monitoring of U.S. peace activists.

The Church Committee played its proper Congressional role, checking the power of the executive branch, as it had been spiraling out of control since the 1950s and the early CIA covert action programs. The Committee sought to protect U.S. citizens against abuses by their government after those abuses had come to light through leaks of secret government documents.

The parallel to the present NSA scandals cannot be ignored. What is completely different, however, is that Congress is today acting as an advocate for the executive branch’s continuing abuses, and as an opponent to the civil liberties of U.S. citizens. Not only has Congress — with a precious few exceptions — accepted the NSA’s mass spying program on American citizens, it has actually been encouraging the President to continue to expand the program!

Where once there was a Congressional committee to challenge and oppose the President’s abuse of power, today the President himself has been even allowed by a complacent Congress to hand pick his own NSA review commission!

Are we really expected to believe that a commission appointed by the President to look into the activities of the President’s intelligence services will come to anything more than a few superficial changes to give the impression of real reform?

One of the President’s commission recommendations is that the NSA cease holding our phone records and demand that the private phone companies retain those records instead — for the NSA to access as it wishes. This is supposed to be reform?

The President will make a speech this Friday to tell the rest of us which of the suggestions made by his own commission he will decide to implement. Congress has no problem with that. Representative Adam B. Schiff (D-Calif.) admitted last week that Congress has no intention of asserting itself in the process. “It’s my hope that [Obama will] do as much as he can through the executive process because the legislative process will be difficult, perilous and long.”

Church famously said back in 1975: “In the need to develop a capacity to know what potential enemies are doing, the United States government has perfected a technological capability that enables us to monitor the messages that go through the air… We must know, at the same time, that capability at any time could be turned around on the American people, and no American would have any privacy left… There would be no place to hide…. I know the capacity that is there to make tyranny total in America, and we must see to it that this agency and all agencies that possess this technology operate within the law and under proper supervision so that we never cross over that abyss. That is the abyss from which there is no return.”

Have we reached that point? Let us hope not. Real reform begins with the repeal of the Patriot Act and of the 2001 Authorization for the use of military force. If we keep our eye on that goal and not allow ourselves to become distracted with the President’s phony commissions, we might force Congress to listen.

Iraq: The ‘Liberation’ Neocons Would Rather Forget

Remember Fallujah? Shortly after the 2003 invasion of Iraq, the U.S. military fired on unarmed protestors, killing as many as 20 and wounding dozens. In retaliation, local Iraqis attacked a convoy of U.S. military contractors, killing four. The U.S. then launched a full attack on Fallujah to regain control, which left perhaps 700 Iraqis dead and the city virtually destroyed.

According to press reports last weekend, Fallujah is now under the control of al-Qaida affiliates. The Anbar province, where Fallujah is located, is under siege by al-Qaida. During the 2007 “surge,” more than 1,000 U.S. troops were killed “pacifying” the Anbar province. Although al-Qaida was not in Iraq before the U.S. invasion, it is now conducting its own surge in Anbar.

For Iraq, the U.S. “liberation” is proving far worse than the authoritarianism of Saddam Hussein, and it keeps getting worse. Last year was Iraq’s deadliest in five years. In 2013, fighting and bomb blasts claimed the lives of 7,818 civilians and 1,050 members of the security forces. In December alone, nearly 1,000 people were killed.

I remember sitting through many hearings in the House International Relations Committee praising the “surge,” which we were told secured a U.S. victory in Iraq. They also praised the so-called “Awakening,” which was really an agreement by insurgents to stop fighting in exchange for U.S. dollars. I always wondered what would happen when those dollars stopped coming.

Where are the surge and awakening cheerleaders now?

One of them, Richard Perle, was interviewed last year on NPR and asked whether the Iraq invasion that he pushed was worth it. He replied:

I’ve got to say I think that is not a reasonable question. What we did at the time was done in the belief that it was necessary to protect this nation. You can’t a decade later go back and say, well, we shouldn’t have done that.

Many of us were saying all along that we shouldn’t have done that — before we did it. Unfortunately, the George W. Bush Administration took the advice of the neocons pushing for war and promising it would be a “cakewalk.” We continue to see the results of that terrible mistake, and it is only getting worse.

Last month, the U.S. shipped nearly 100 air-to-ground missiles to the Iraqi air force to help combat the surging al-Qaida. Ironically, the same al-Qaida groups the U.S. is helping the Iraqis combat are benefiting from the U.S. covert and overt war to overthrow Bashar Assad next door in Syria. Why can’t the U.S. government learn from its mistakes?

The neocons may be on the run from their earlier positions on Iraq, but that does not mean they have given up. They were the ones pushing for an attack on Syria this summer. Thankfully, they were not successful. They are now making every effort to derail President Barack Obama’s efforts to negotiate with the Iranians. Just last week, William Kristol urged Israel to attack Iran with the hope we would then get involved. Neoconservative Senators from both parties recently introduced the Nuclear Weapon Free Iran Act of 2013, which would also bring us back on war-footing with Iran.

Next time the neocons tell us we must attack, just think “Iraq.”

Ron Paul Straight Talk: Government Policies Hurt Low-Wage Workers

Fast-food workers across the county have recently held a number of high profile protests to agitate for higher wages. These protests have been accompanied by efforts to increase the wages mandated by state and local minimum wage laws, as well as a renewed push in some States and localities to pass “living wage” laws. President Obama has proposed raising the Federal minimum wage to ten dollars an hour.

Raising minimum wages by government decree appeals to those who do not understand economics. This appeal is especially strong during times of stagnant wages and increased economic inequality. But raising the minimum wage actually harms those at the bottom of the income ladder. Basic economic theory teaches that when the price of a good increases, demand for that good decreases. Raising the minimum wage increases the price of labor, thus decreasing the demand for labor. So an increased minimum wage will lead to hiring freezes and layoffs. Unskilled and inexperienced workers are the ones most often deprived of employment opportunities by increases in the minimum wage.

Minimum wage laws are not the only example of government policies that hurt those at the bottom of the income scale. Many regulations that are promoted as necessary to “rein in” large corporations actually hurt small businesses. Because these small businesses operate on a much narrower profit margin, they cannot as easily absorb the costs of complying with the regulations as large corporations. These regulations can also inhibit lower income individuals from starting their own businesses. Thus, government regulations can reduce the demand for wage-labor, while increasing the supply of labor, which further reduces wages.

Perhaps the most significant harm to low-wage earners is caused by the inflationist polices of the Federal Reserve. Since its creation one hundred years ago this month, the Federal Reserve’s policies have caused the dollar to lose over 95 percent of its purchasing power—that’s right, today you need $23.70 to buy what one dollar bought in 1913! Who do you think suffers the most from this loss of purchasing power—Warren Buffet or his secretary?

It is not just that higher incomes can afford the higher prices caused by Federal Reserve. The system is set up in a way that disadvantages those at the bottom of the income scale. When the Federal Reserve creates money, those well-connected with the political and financial elites receive the newly-created money first, before general price increases have spread through the economy. And most fast-food employees do not number among the well-connected.

It is not a coincidence that economic inequality has increased in recent years, as the Federal Reserve has engaged in unprecedented money creation and bailouts of big banks and Wall Street financial firms. As billionaire investor Donald Trump has said, the Federal Reserve’s quantitative easing policies are a great deal for “people like me.” And former Federal Reserve official Andrew Huszar has called QE “the greatest backdoor Wall Street bailout of all time.”

Many so-called champions of economic equality and fairness for the working class are preparing to confirm Janet Yellen as next Chairman of the Federal Reserve. Yet Yellen is committed to continuing and even expanding, the upward redistributionist polices of her predecessors. Washington could use more sound economic thinking and less demagoguery.

By increasing unemployment, government policies like minimum wage laws only worsen inequality. Those who are genuinely concerned about increasing the well-being of all Americans should support repeal of all laws, regulations, and taxes that inhibit job creation and economic mobility. Congress should also end the most regressive of all taxes, the inflation tax, by ending the Federal Reserve.

Ron Paul Straight Talk: Progress Toward Peace In 2013, But Dark Clouds Remain

It is the time of year we feel a sense of joy and optimism. We are preparing for the holidays and looking to spend time with our families and friends. This year, as we look back, we see several developments that leave us feeling optimistic.

A U.S. attack on Syria was averted to a large degree because the American people did not want another Mideast war. Public pressure was so strong that President Barack Obama was forced to back down from his threats to launch missiles at Syria over an alleged Syrian government chemical attack. We have just recently discovered that U.S. claims at the time were based on highly manipulated “intelligence.” The President narrowly avoided another Iraq debacle, where the U.S. went to war based on lies and fabrications. This time, the American people were much more skeptical. That is good news!

A U.S. attack on Syria would have brought us one step closer to the neocons’ ultimate goal of an attack on Iran. The Administration’s decision to step back from the brink with Syria has consequently opened the door to an historic U.S. diplomatic engagement with Iran.

Yes, the neocons have suffered a number of defeats this year, for which we have great reason to be thankful and optimistic. However, it would be foolish to believe that a couple of defeats will end their obsession with American exceptionalism, war and the U.S. global empire. Though the neocons have had several setbacks, they will continue their efforts. And there are some dark clouds on the horizon that we should closely watch.

The Senate, for example, seems intent on ruining the Christmas spirit — a time when Christians celebrate the birth of the Prince of Peace — with new threats against Iran, even as diplomacy has achieved what decades of sanctions could not.

While U.S. Senate efforts to include new Iran sanctions language in the National Defense Authorization Act for 2014 (NDAA) were unsuccessful, those pushing for more sanctions on Iran even in the midst of a diplomatic thaw have not given up. Last week, 26 Senators — drawn equally from each party — introduced the Nuclear Weapons Free Iran Act, which would impose severe new sanctions on Iran and on countries who do business with Iran.

Perhaps worse, the Act states that it is the sense of the Congress that if Israel attacks Iran, the US Congress should:

[A]uthorize the use of military force, diplomatic, military, and economic support to the Government of Israel in its defense of its territory, people, and existence.

Even though a “sense of Congress” has no force of law, these are the kinds of blank checks that lead to world wars. Though not binding, language like this is meant to establish U.S. policy over time, so that if Israel does attack Iran, enough Senators will be on record supporting U.S. involvement that they feel compelled to vote for war. This is the game they played for more than a decade with Iraq legislation.

The Senate bill is unlikely to ever become law. But even if it did, it would not succeed. Its demand that the rest of the world stop doing business with Iran just as Iran has shown such diplomatic flexibility would likely be ignored.

Congress — under the influence of the Israeli and Saudi lobbies — is seeking to derail the Obama Administration’s diplomatic efforts with Iran. We can be optimistic over the steps toward peace this past year, but we should remain vigilant. The war lobby will not give up so easily.

Ron Paul Straight Talk: After 100 Years Of Failure, It’s Time To End The Fed!

A week from now, the Federal Reserve System will celebrate the 100th anniversary of its founding. Resulting from secret negotiations between bankers and politicians at Jekyll Island, Ga., the Fed’s creation established a banking cartel and a board of government overseers that has grown ever stronger through the years. One would think this anniversary would elicit some sort of public recognition of the Fed’s growth from a quasi-agent of the Treasury Department intended to provide an elastic currency, to a de facto independent institution that has taken complete control of the economy through its central monetary planning. But just like the Fed’s creation, its 100th anniversary may come and go with only a few passing mentions.

Like many other horrible and unConstitutional pieces of legislation, the bill that created the Fed, the Federal Reserve Act, was passed under great pressure on Dec. 23, 1913, in the waning moments before Congress recessed for Christmas, with many members already absent from those final votes. This underhanded method of pressuring Congress with such a deadline to pass the Federal Reserve Act would provide a foreshadowing of the Fed’s insidious effects on the U.S. economy — with actions performed without transparency.

Ostensibly formed with the goal of preventing financial crises such as the Panic of 1907, the Fed has become increasingly powerful over the years. Rather than preventing financial crises, however, the Fed has constantly caused new ones. Barely a few years after its inception, the Fed’s inflationary monetary policy to help fund World War I led to the Depression of 1920. After the economy bounced back from that episode, a further injection of easy money and credit by the Fed led to the Roaring Twenties and to the Great Depression, the worst economic crisis in American history.

But even though the Fed continued to make the same mistakes over and over again, no one in Washington ever questioned the wisdom of having a central bank. Instead, after each episode the Fed was given more and more power over the economy. Even though the Fed had brought about the stagflation of the 1970s, Congress decided to formally task the Federal Reserve in 1978 with maintaining full employment and stable prices, combined with constantly adding horrendously harmful regulations. Talk about putting the inmates in charge of the asylum!

Now we are reaping the noxious effects of a century of loose monetary policy, as our economy remains mired in mediocrity and utterly dependent on a stream of easy money from the central bank. A century ago, politicians failed to understand that the financial panics of the 19th century were caused by collusion between government and the banking sector. The government’s growing monopoly on money creation, high barriers to entry into banking to protect politically favored incumbents, and favored treatment for government debt combined to create a rickety, panic-prone banking system. Had legislators known then what we know now, we could hope that they never would have established the Federal Reserve System.

Today, however, we do know better. We know that the Federal Reserve continues to strengthen the collusion between banks and politicians. We know that the Fed’s inflationary monetary policy continues to reap profits for Wall Street while impoverishing Main Street. And we know that the current monetary regime is teetering on a precipice. One hundred years is long enough. End the Fed!

Ron Paul Straight Talk: Hobby Lobby Case Concerns Rights, Not Contraception

This column originally appeared on the Ron Paul Institute For Peace And Prosperity’s website.

One of the most important cases the US Supreme Court will consider this term is Hobby Lobby’s lawsuit challenging the Obamacare mandate that employer-provided health care plans must cover abortion and contraceptives. Hobby Lobby, a corporation owned and managed by a traditional Christian family, argues that the mandate violates their First Amendment rights.

Much of the discussion has focused on whether a corporation such as Hobby Lobby can even have First Amendment rights. But the issue of “corporate personhood” is a smokescreen. Hobby Lobby’s corporate status has no bearing on whether under Obamacare, Hobby Lobby’s owners, about whose personhood there is no doubt, have a right to run their business in a manner consistent with their moral beliefs. If the form by which Hobby Lobby did business was relevant to its right to operate free of federal interference, then Hobby Lobby could avoid the Obamacare mandate by simply reorganizing itself as a partnership or sole proprietorship.

Some Obamacare supporters cast this case as a conflict between Hobby Lobby’s First Amendment rights and the rights of its employees to contraception and abortion. Hobby Lobby is not trying to stop its employees from obtaining contraceptives and abortions; it is simply asking that the government not force it to pay for them.

Forcing Hobby Lobby to pay for abortion services is especially offensive because Hobby Lobby’s owners consider abortion a form of murder. Those who, like me, agree that abortion is an act of violence against an innocent person, will side with Hobby Lobby. However, this case is not about the legality of abortion. It is about whether someone can have a “right” to force someone else to provide him with a good or service.  Therefore, even those who support legal abortion should at least support a business’s right to choose to not subsidize it.

Supporters of the mandate claim Congress has the power to create rights to privately-provided goods and services. They also say that Congress has the power to legislatively override the rights of religious liberty, property, and contract. It is fair to ask what is the source of Congress’s power to create new rights. It certainly does not originate in the Declaration of Independence, which expressly denies that rights come from the government; or from the United Stares Constitution, which nowhere granted government the power to redistribute or create artificial rights.

The principle that Government can force businesses to violate their religious principals even if those principles conflict with civil law could be applied in ways some Obamacare supporters may find objectionable. For example, what if the government argued that the Pentagon’s need for some products produced by a Quaker-owned business trumped the Quaker owner’s objections to war?

The hypothetical example above shows just how radical and dangerous are arguments in support of the Obamacare abortion and contraception mandate. If Hobby Lobby loses, the US Supreme Court will have endorsed the idea that the federal government can force individuals to violate their most sacred religious principles to satisfy any government demands. The central question of the Hobby Lobby case, then, is whether religious liberty will continue to be meaningful in this country. For what good is a religious liberty that protects your rights to attend a worship service, but allows the government to force you to live in opposition to the values preached at those services? This is why all supporters of liberty and limited government—regardless of their views on the morality of contraception—should be on the side of Hobby Lobby.

Ron Paul Straight Talk: You Cannot Negotiate With Iran?

You cannot negotiate with Iran. That is what they told us for years. The Iranian leadership is too fanatical, they are not rational actors, they are “not like us.” One U.S. official even recently said that deception is part of the Iranian DNA. But just over a week ago negotiations between the five permanent UN Security Council Members plus Germany and the Iranians produced an historic agreement that may be first step toward a new era in US relations with the Middle East.

As Middle East expert Eric Margolis pointed out this week, for Iran’s major concessions it will only receive “$7 billion — of its own money, which has been frozen abroad by U.S.-led sanctions.” That sounds like quite a bit of compromise for such a “fanatical” country.

Earlier this summer the same people made the same arguments about Syria. You cannot negotiate with Syrian President Assad, they said. He is insane; he is another Hitler. But not only was it possible, a deal was signed ending the threat of a US strike in exchange for Syria agreeing to give up its chemical weapons and the ability to manufacture new ones. Syria upheld its end of the agreement and the chemicals were all accounted for on schedule.

Why have the interventionists, the neocons, and the special interest groups claimed for so long that negotiation and diplomacy was tantamount to surrender; that countries such as Iran and Syria “only understand force”? It is because these groups are afraid of diplomacy. They do not want a peaceful resolution to these conflicts. They see U.S. foreign relations only in the starkest terms: do what we say and we will give you aid, disobey us and we will bomb you.

Now the warmongers who call themselves “foreign policy experts” have been exposed. The whole world sees that they are wrong. Their advice is bad. Their limited vision of how foreign affairs should be conducted is actually dangerous to the United States. It is now clear that there are workable alternatives.

As with the U.S. threats against Syria, public opinion polls on talks with Iran demonstrate that the American people are solidly behind diplomacy and opposed to another war. According to one recent poll, Americans support the deal reached with Iran by a margin of two-to-one.

Congress, however, is once again far behind the American people. Even as U.S. negotiators were reaching agreement with their Iranian counterparts, U.S. representatives and Senators were drafting legislation to increase sanctions on Iran. Instead of listening to the American people, many in Congress seem attached to special interests like the Israel and Saudi lobbies, which oppose anything less than full Iranian capitulation. Israel refuses to join the Non-Proliferation Treaty yet it seeks to dictate the rules of the treaty to those who have signed it. Saudi Arabia is desperate to control the region politically and economically, and it views an Iran that is free to sell oil and other products on the open market as a threat to Saudi power.

For too long both Israel and the Saudis have benefited from a US military guarantee. It has created “moral hazard” that only encourages more belligerent behavior on both of their parts. It remains to be seen whether this six month trial period will develop into a permanent move toward normalization of relations with Iran. What if Congress refuses to give Iran its own money back? But we are moving in the right direction and we should be optimistic.

A better U.S. relationship with Iran may signal the beginning of the end of U.S. meddling in the region and serve as an incentive for Saudi Arabia, Israel, and the Gulf States to solve their problems themselves. This would be a great boost to U.S. national security, just as an Iran open to U.S. business and trade would be a great boost to our economic security. Is peace finally breaking out? Let’s hope so.

Ron Paul Straight Talk: Can Karzai Save Us?

After a year of talks over the post-2014 U.S. military presence in Afghanistan, the US Administration announced last week that a new agreement had finally been reached. Under the deal worked out with Afghan President Hamid Karzai, the U.S. would keep thousands of troops on nine military bases for at least the next ten years.

It is clear that the Obama Administration badly wants this deal. Karzai, sensing this, even demanded that the U.S. president send a personal letter promising that the U.S. would respect the dignity of the Afghan people if it were allowed to remain in the country. It was strange to see the U.S. president go to such lengths for a deal that would mean billions more U.S. dollars to Karzai and his cronies, and a U.S. military that would continue to prop up the regime in Kabul.

Just as the deal was announced by Secretary of State John Kerry and ready to sign, however, Karzai did an abrupt about-face. No signed deal until after the next presidential elections in the spring, he announced to a gathering of tribal elders, much to the further embarrassment and dismay of the U.S. side. The U.S. Administration had demanded a signed deal by December. What may happen next is anybody’s guess. The U.S. threatens to pull out completely if the deal is not signed by the end of this year.

Karzai should be wary of his actions. It may become unhealthy for him. The U.S. has a bad reputation for not looking kindly on puppet dictators who demand independence from us.

Yet Karzai’s behavior may have the unintended benefit of saving the U.S. government from its own worst interventionist instincts. The U.S. desire to continue its military presence in Afghanistan — with up to 10,000 troops — is largely about keeping up the false impression that the Afghan war, the longest in U.S. history, has not been a total, catastrophic failure. Maintaining a heavy U.S. presence delays that realization, and with it the inevitable conclusion that so many lives have been lost and wasted in vain. It is a bitter pill that this president, who called Afghanistan “the good war,” would rather not have to swallow.

The Administration has argued that U.S. troops must remain in Afghanistan to continue the fight against al-Qaeda. But al-Qaeda has virtually disappeared from Afghanistan. What remains is the Taliban and the various tribes that have been involved in a power struggle ever since the Soviets left almost a quarter of a century ago. In other words, twelve years later we are back to the starting point in Afghanistan.

Where has al-Qaeda gone if not in Afghanistan? They have branched out to other areas where opportunity has been provided by U.S. intervention. Iraq had no al-Qaeda presence before the 2003 US invasion. Now al-Qaeda and its affiliates have turned Iraq into a bloodbath, where thousands are killed and wounded every month. The latest fertile ground for al-Qaeda and its allies is Syria, where they have found that U.S. support, weapons, and intelligence is going to their side in the ongoing war to overthrow the Syrian government.

In fact, much of the U.S. government’s desire for an ongoing military presence in Afghanistan has to do with keeping money flowing to the military industrial complex. Maintaining nine U.S. military bases in Afghanistan and providing military aid and training to Afghan forces will consume billions of dollars over the next decade. The military contractors are all too willing to continue to enrich themselves at the expense of the productive sectors of the U.S. economy.

Addressing Afghan tribal elders last week, Karzai is reported to have expressed disappointment with U.S. assistance thus far: “I demand tanks from them, and they give us pickup trucks, which I can get myself from Japan… I don’t trust the U.S., and the U.S. doesn’t trust me.”

Let us hope that Karzai sticks to his game with Washington. Let the Obama Administration have no choice but to walk away from this twelve-year nightmare. Then we can finally just march out.

Ron Paul Straight Talk: The Fed Steals From The Poor To Give To The Rich

Last Thursday the Senate Banking Committee held hearings on Janet Yellen’s nomination as Federal Reserve Board Chairman. As expected, Ms. Yellen indicated that she would continue the Fed’s “quantitative easing” (QE) polices, despite QE’s failure to improve the economy. Coincidentally, two days before the Yellen hearings, Andrew Huszar, an ex-Fed official, publicly apologized to the American people for his role in QE. Mr. Huszar called QE “the greatest backdoor Wall Street bailout of all time.”

As recently as five years ago, it would have been unheard of for a Wall Street insider and former Fed official to speak so bluntly about how the Fed acts as a reverse Robin Hood. But a quick glance at the latest unemployment numbers shows that QE is not benefiting the average American. It is increasingly obvious that the Fed’s post-2008 policies of bailouts, money printing, and bond buying benefited the big banks and the politically-connected investment firms. QE is such a blatant example of crony capitalism that it makes Solyndra look like a shining example of a pure free market!

It would be a mistake to think that QE is the first time the Fed’s policies have benefited the well-to-do at the expense of the average American. The Fed’s polices have always benefited crony capitalists and big spending politicians at the expense of the average American.

By manipulating the money supply and the interest rate, Federal Reserve polices create inflation and thereby erode the value of the currency. Since the Federal Reserve opened its doors one hundred years ago, the dollar has lost over 95 percent of its purchasing power —that’s right, today you need $23.70 to buy what one dollar bought in 1913!

As pointed out by the economists of the Austrian School, the creation of new money does not impact everyone equally. The well-connected benefit from inflation, as they receive the newly-created money first, before general price increases have spread through the economy. It is obvious, then, that middle- and working-class Americans are hardest hit by the rising level of prices.

Congress also benefits from the devaluation of the currency, as it allows them to increase welfare- and warfare-spending without directly taxing the people. Instead, the increase is only felt via the hidden “inflation tax.” I have often said that the inflation tax is one of the worst taxes because it is hidden and because it is regressive. Of course, there is a limit to how long the Fed can facilitate big government spending without causing an economic crisis.

Far from promoting a sound economy for all, the Federal Reserve is the main cause of the boom-and-bust economy, as well as the leading facilitator of big government and crony capitalism. Fortunately, in recent years more Americans have become aware of how the Fed is impacting their lives. These Americans have joined efforts to educate their fellow citizens on the dangers of the Federal Reserve and have joined efforts to bring transparency to the Federal Reserve by passing the Audit the Fed bill.

Auditing the Fed is an excellent first step toward restoring a monetary policy that works for the benefit of the American people, not the special interests. Another important step is to repeal legal tender laws that restrict the ability of the people to use the currency of their choice. This would allow Americans to protect themselves from the effects of the Fed’s polices. Auditing and ending the Fed, and allowing Americans to use the currency of their choice, must be a priority for anyone serious about restoring peace, prosperity, and liberty.

Ron Paul Straight Talk: Chained Consumer Price Index Chains Taxpayers

One of the least discussed, but potentially most significant, provisions in President Obama’s budget is the use of the “chained consumer price index” (chained CPI), to measure the effect of inflation on people’s standard of living. Chained CPI is an effort to alter the perceived impact of inflation via the gimmick of “full substitution.” This is the assumption that when the price of one consumer product increases, consumers will simply substitute a similar, lower-cost product with no adverse effect. Thus, the government decides your standard of living is not affected if you can no longer afford to eat steak, as long as you can afford to eat hamburger.

The problem with “full substitution” should be obvious to anyone not on the government payroll. Since consumers did not choose to buy lower-priced beef before inflation raised the price of steak, they obviously preferred steak. So if the Federal Reserve’s policies create inflation that forces you to purchase hamburger instead of steak, your standard of living is lowered. CPI already uses this sort of substitution to mask the costs of inflation, but chained CPI uses those substitutions more frequently, thereby lowering the reported rate of inflation.

Supporters of chained CPI also argue that the government should take into account technology and other advances that enhance the quality of the products we buy. By this theory, increasing prices signal an increase in our standard of living! While it is certainly true that advances in technology improve our standard of living, it is also true that, left undisturbed, market processes tend to lowerthe prices of goods. Remember the mobile phones from the 1980s? They had limited service, constantly needed charging, and were extremely expensive. Today, almost all Americans can easily afford a mobile device to make and receive calls, texts, and e-mails, as well as use the Internet, watch movies, read books, and more.

The same process occurred with personal computers, cars, and numerous other products. If left alone, the operations of the market place will deliver higher quality and lower prices. It is only when the government interferes with the operation of the market, especially via fiat money, that consumers must contend with constant price increases.

The goal of chained CPI is to decrease the government’s obligation to meet its promise to keep up with the cost of living in programs like Social Security. But it does not prevent individuals who have a nominal increase in income from being pushed into a higher income bracket. Both are achieved without a vote of Congress.

Noted financial analyst Peter Schiff correctly calls chained CPI a measurement of the cost of survival. Instead of using inflation statistics as a political ploy to raise taxes and artificially cut spending, the President and Congress should use a measurement that actually captures the eroding standard of living caused by the Federal Reserve’s inflationary policies. Changing government statistics to exploit the decline in the American way of life and benefit big spending politicians and their cronies in the big banks does nothing but harm the American people.

What Cannot Be Said About Iraq

In this week’s “Texas Straight Talk,” Ron Paul takes a look at the hamster wheel of American interventionist policy in the Middle East and points out its senseless, repetitive, destabilizing influence. Never mind that our leaders know exactly what they’re doing, even if they’ll never admit it.

October was Iraq’s deadliest month since April, 2008. In those five and a half years, not only has there been no improvement in Iraq’s security situation, but things have gotten much worse. More than 1,000 people were killed in Iraq last month, the vast majority of them civilians. Another 1,600 were wounded, as car bombs, shootings, and other attacks continue to maim and murder.

As post-“liberation” Iraq spirals steadily downward, Prime Minister Nuri al-Maliki was in Washington last week to plead for more assistance from the United States to help restore order to a society demolished by the 2003 U.S. invasion. Al-Qaida has made significant recent gains, Maliki told President Obama at their meeting last Friday, and Iraq needs more US military aid to combat its growing influence.

Obama pledged to work together with Iraq to address al-Qaeda’s growing presence, but what was not said was that before the U.S. attack there was no al-Qaida in Iraq. The appearance of al-Qaida in Iraq coincided with the U.S. attack. They claimed we had to fight terror in Iraq, but the U.S. invasion resulted in the creation of terrorist networks where before there were none. What a disaster.

Maliki also told President Obama last week that the war in next-door Syria was spilling over into Iraq, with the anti-Assad fighters setting off bombs and destabilizing the country. Already more than 5,000 people have been killed throughout Iraq this year, and cross-border attacks from Syrian rebels into Iraq are increasing those numbers. Again, what was not said was that the U.S. government had supported these anti-Assad fighters both in secret and in the open for the past two years.

Earlier in the week a group of Senators – all of whom had supported the 2003 U.S. invasion of Iraq – sent a strongly-worded letter to Obama complaining that Maliki was far too close to the Iranian government next door. What was not said was that this new closeness between the Iraqi and Iranian governments developed under the U.S.-installed government after the U.S. invasion of Iraq.

Surely there is plenty of blame that can be placed on Maliki and the various no-doubt corrupt politicians running Iraq these days. But how was it they came to power? Were we not promised by those promoting the war that it would create a beach-head of democracy in the Middle East and a pro-American government?

According to former Treasury Secretary Paul O’Neill, in early 2001 as the new Bush administration was discussing an attack on Iraq, then-Defense Secretary Donald Rumsfeld said, “Imagine what the region would look like without Saddam and with a regime that’s allied with U.S. interests. It would change everything in the region and beyond it. It would demonstrate what U.S. policy is all about.”

We see all these years later now how this ridiculous this idea was.

I have long advocated the idea that since we just marched in, we should just march out. That goes for U.S. troops and also for U.S. efforts to remake Iraq, Afghanistan, Libya, and everywhere the neocon wars of “liberation” have produced nothing but chaos, destruction, and more U.S. enemies overseas. We can best improve the situation by just leaving them alone.

The interventionists have unfortunately neither learned their lesson from the Iraq debacle nor have they changed their tune. They are still agitating for regime change in Syria, even as they blame the Iraqi government for the destabilization that spills over. They are still agitating for a U.S. attack on Iran, with Members of Congress introducing legislation recently that would actually authorize U.S. force against Iran.

It looks like a very slow learning curve for our bipartisan leaders in Washington. It’s time for a change.

Ron Paul Straight Talk: Americans Should Embrace Chilling Relations With Saudi Arabia

Last week it was reported that Saudi Arabia decided to make a “major shift” away from its 80 years of close cooperation with the United States. The Saudi leadership is angry that the Obama Administration did not attack Syria last month, and that it has not delivered heavy weapons to the Syrian rebels fighting to overthrow the Assad government. Saudi Arabia is heavily invested in the overthrow of the Assad government in Syria, sending money and weapons to the rebels.

However, it was the recent diplomatic opening between the United States and Iran that most infuriated the Saudis. Saudi Arabia is strongly opposed to the Iranian government and has vigorously lobbied the U.S. Congress to maintain sanctions and other pressure on Iran. Like Israel, the Saudis are fearful of any U.S. diplomacy with Iran.

This additional strain in U.S./Saudi relations came at the 40 year anniversary of the Arab oil embargo of the U.S. over its support of Israel in the 1973 Yom Kippur war. At the time, the embargo caused quite a bit of trouble for Americans, including gas shortages and long lines at the filling stations. A repeat of this move, however, would not have the same effect on the U.S. economy. Though it would not be desired, these are not the 1970s and oil is now a more fungible commodity no longer solely in Arab hands.

Why does Saudi Arabia insist that the United States fight its battles? The Saudis are strongly opposed to the governments in Syria and Iran so they expect the U.S. to attack. It is their neighborhood, why don’t they fight their own wars? Israel shares the same position in the region as Saudi Arabia: it has been fighting to overthrow Assad in Syria for years, and Israeli leadership constantly pushes the U.S. toward war on Iran. They are both working on the same side of these issues but why do they keep trying to draw us in?

We have unwritten agreements to defend Saudi Arabia and Israel, which keeps us heavily involved militarily in the Middle East. But when the U.S. becomes so involved, we are the real losers—especially the American taxpayers, who are forced to finance this global military empire. Plus, our security guarantee to Saudi Arabia and Israel creates a kind of moral hazard: there is little incentive for these two countries to push for more peaceful solutions in the region because the U.S. military underwrites their reckless behavior. It is an unhealthy relationship that should come to an end.

If Saudi Arabia and Israel are so determined to extend their influence in the region and share such similar goals, why don’t they work together to stabilize the region without calling on the U.S. for back-up? It might be healthy for them to cooperate and leave us out of it.

One of Osama bin Laden’s stated goals was to bankrupt the U.S. by drawing it into endless battles in the Middle East and south Asia. Unfortunately, even from beyond the grave he continues to successfully implement his policy. But should we really be helping him do so? If Saudi Arabia wants to pull back from its deep and unhealthy relationship with the United States we should welcome such a move. Then we might return to peace and commerce rather than sink under entangling alliances.

Texas Straight Talk: How DC Won On The Debt Ceiling, And Americans Lost

Washington, DC, Wall Street, and central bankers around the world rejoiced this week as Congress came to an agreement to end the government shutdown and lift the debt ceiling. The latest spending-and-debt deal was negotiated by Congressional leaders behind closed doors, and was rushed through Congress before most members had time to read it. Now that the bill is passed, we can see that it is a victory for the political class and special interests, but a defeat for the American people.

The debt ceiling deal increases spending above the levels set by the “sequester.” The sequester cuts were minuscule, and in many cases used the old DC trick of calling reductions in planned spending increases a cut. But even minuscule and phony cuts are unacceptable to the bipartisan welfare-warfare spending collation. The bill also does nothing to protect the American people from the Obamacare disaster.

As is common in bills drafted in secret and rushed into law, this bill contains special deals for certain powerful politicians. The bill even has a provision authorizing continued military aid to opponents of the Ugandan “Lord’s Resistance Army,” which was the subject of the widely-viewed “Kony 2012″ YouTube videos. Most of these unrelated provisions did not come to public attention until after the bill was passed and signed into law.

Members of Congress and the public were told the debt ceiling increase was necessary to prevent a government default and an economic crisis. This manufactured fear supposedly justified voting on legislation without allowing members time to even read it, much less to remove the special deals or even debate the wisdom of intervening in overseas military conflicts because of a YouTube video.

Congress should have ignored the hysterics. A failure to increase government’s borrowing authority would not lead to a default any more that an individual’s failure to get a credit card limit increase in would mean they would have to declare bankruptcy. Instead, the failure of either an individual or a government to obtain new borrowing authority would force the individual or the government to live within their means, and may even force them to finally reduce their spending. Most people would say it is irresponsible to give a spendthrift, debit-ridden individual a credit increase. Why then is it responsible to give an irresponsible spendthrift government an increase in borrowing authority?

Congress surrendered more power to the president in this bill. Instead of setting a new debt ceiling, it simply “suspended” the debt ceiling until February. This gives the administration a blank check to run up as much debt as it pleases from now until February 7th. Congress can “disapprove” the debt ceiling suspension, but only if it passes a resolution of disapproval by a two-thirds majority. How long before Congress totally abdicates its constitutional authority over spending by allowing the Treasury permanent and unlimited authority to borrow money without seeking Congressional approval?

Instead of seriously addressing the spending crisis, most in Congress would rather engage in last-minute brinksmanship and backroom deals instead of taking the necessary action to reign in spending. Congress will only take serious steps to reduce spending when either a critical mass of Americans pressures it to cut spending, or when investors and foreign countries stop buying US government debt. Hopefully, those of us who understand sound economics can convince enough of our fellow citizens to pressure Congress to make serious spending cuts before Congress’s reckless actions cause a total economic collapse.

Ron Paul: At The Fed, The New Boss Is The Same As The Old Boss

The news that Janet Yellen was nominated to become the next Chairman of the Board of Governors of the Federal Reserve System was greeted with joy by financial markets and the financial press. Wall Street saw Yellen’s nomination as a harbinger of continued easy money. Contrast this with the hand-wringing that took place when Larry Summers’ name was still in the running. Pundits worried that Summers would be too cautious, too hawkish on inflation, or too close to big banks.

The reality is that there wouldn’t have been a dime’s worth of difference between Yellen’s and Summers’ monetary policy. No matter who is at the top, the conduct of monetary policy will be largely unchanged: large-scale money printing to bail out big banks. There may be some fiddling around the edges, but any monetary policy changes will be in style only, not in substance.

Yellen, like Bernanke, Summers, and everyone else within the Fed’s orbit, believes in Keynesian economics. To economists of Yellen’s persuasion, the solution to recession is to stimulate spending by creating more money. Wall Street need not worry about tapering of the Fed’s massive program of quantitative easing under Yellen’s reign. If anything, the Fed’s trillion dollars of yearly money creation may even increase.

What is obvious to most people not captured by the system is that the Fed’s loose monetary policy was the root cause of the current financial crisis. Just like the Great Depression, the stagflation of the 1970s, and every other recession of the past century, the current crisis resulted from the creation of money and credit by the Federal Reserve, which led to unsustainable economic booms.

Rather than allowing the malinvestments and bad debts caused by its money creation to liquidate, the Fed continually tries to prop them up. It pumps more and more money into the system, piling debt on top of debt on top of debt. Yellen will continue along those lines, and she might even end up being Ben Bernanke on steroids.

To Yellen, the booms and bust of the business cycle are random, unforeseen events that take place just because. The possibility that the Fed itself could be responsible for the booms and busts of the business cycle would never enter her head. Nor would such thoughts cross the minds of the hundreds of economists employed by the Fed. They will continue to think the same way they have for decades, interpreting economic data and market performance through the same distorted Keynesian lens, and advocating for the same flawed policies over and over.

As a result, the American people will continue to suffer decreases in the purchasing power of the dollar and a diminished standard of living. The phony recovery we find ourselves in is only due to the Fed’s easy money policies. But the Fed cannot continue to purchase trillions of dollars of assets forever. Quantitative easing must end sometime, and at that point the economy will face the prospect of rising interest rates, mountains of bad debt and malinvested resources, and a Federal Reserve which holds several trillion dollars of worthless bonds.

The future of the US economy with Chairman Yellen at the helm is grim indeed, which provides all the more reason to end our system of central economic planning by getting rid of the Federal Reserve entirely. Ripping off the bandage may hurt some in the short run, but in the long term everyone will be better off. Anyway, most of this pain will be borne by the politicians, big banks, and other special interests who profit from the current system. Ending this current system of crony capitalism and moving to sound money and free markets is the only way to return to economic prosperity and a vibrant middle class.