Isolationism Verses Non-Interventionism

Mark Steyn filled in for Rush Limbaugh yesterday. He was able to to diss just about every Republican candidate while interacting with callers who favor any particular one. One caller calling from I-70 in Kansas asked about Ron Paul. Steyn actually responded by saying Ron has been able to get Americans thinking about the Federal Reserve as the main problem. But then Steyn went on basically call Ron Paul a "nut".

Now what was interesting about Steyn's referencing Ron as a nut was that he didn't offer one argument as to why. With every other candidate, he offered a laundry list of silly things and ideas that the candidate had done. But with Ron Paul, he offered none, nada, zilcho.

Now that kind of puzzled me just a bit. Well, after doing some research on the internet, I was able to find an interview in which Steyn says almost exactly what he said on Rush's show. Here is a portion of his interview with Hugh Hewitt:

Yes, I'm not (laughing), I'm not ready to say that, you know, Ron Paul has basically signed on to jihadist foreign policy. I don't think foreign policy engages him. And I think this is the black hole in the Paul campaign. When Ron Paul, you know, there's a lot of stuff. When Ron Paul starts going on about the gold standard and the Federal Reserve, and we dismissed him as some kind of kook for that three or four years ago, in fact, a lot of people have kind of come around to thinking he may be onto something there in recent times. But I don't think he's engaged by foreign policy at all, and I think this is, the idea that America can be a 19^th Century isolationist republic is absurd. America has two relatively benign neighbors, and yet 70% of the population of Mexico has moved north across the southern border, and 100% of every single bad Canadian idea has moved south across the northern border. Things that would be uniquely Canadian absurdities forty years ago, like multiculturalism and government health care, are now embedded in American politics. So the idea that Ron Paul's view of the Constitution can hold the planet at bay, I think, is the biggest defect in his whole pitch.

So there you have it. To be an isolationist is to be a "nut". But is Ron Paul an isolationist? Before we get to that, I want to look at the statement that 70% of Mexico is coming across the border. Now obviously Steyn is being facetious, but his point is obvious. Yet isn't it our foreign policy that has helped Mexico boil to the point it is at? Isn't the War on Drugs a major problem that has caused Mexicans to be killed left and right? How about instead of building a wall around the United States (and locking us in), how about getting rid of welfare, which is probably the number one reason they come in the first place?

But if you haven't noticed already, this whole argument is a red herring. What in tarnations do bad ideas coming from Canada and Mexicans crossing the border have anything to do with isolationism and Ron Paul's position?

But the biggest flaw in Steyn's non-argument is his last statement in the quote,

So the idea that Ron Paul's view of the Constitution can hold the planet at bay, I think, is the biggest defect in his whole pitch.

Ron Paul isn't trying to save the planet. In fact, Ron Paul has been quite clear. It is U.S. policy that is causing more problems than it solves. It is also equally clear that the Constitution does not empower the Federal government to go dropping bombs on anyone they wish in order to be the world's police man. So as far as the above quote is concerned, Mark Steyn offers no reason what-so-ever as to why Ron Paul is a "nut" or "kook".

None of this means that Ron Paul wants to be an isolationist. Ron Paul wants to be a non-Interventionist. The two should not be equivocated. Fortunately, Ron Paul answers a question that deals with this on Youtube.

What If?

I watched this the other night. It was the conclusion to his program.

The Widening Gap?

Are you worried about the widening gap between the rich and the poor? I'm curious about people who make this statement, "That the rich keep getting richer." People that hold this view may have a natural socialist view without realizing it. To make this statement in the first place, it implies that we should strive for equality. Some people have more talent than others. Just as we would think it outrageous to add weights to NBA stars until they can play no better than the other players, nor should equality be a goal in economics. If an entrepreneur figures out how to serve people so well that he gets rich should we inject him with a stupefying serum?

What we should strive for is equality under the law! The rules the same for all, Not the results. This is done by absence and limitation of government. When Nancy Pelosi buys a stock and votes on a bill to make herself rich, this is not equality under law. When the FDA gets to tell Diamond walnuts it cannot claim health benefits but Lays "heart healthy" potato chips is fine, this is not equality under law. All inequality under law comes from government not business and private sector. Everything wall street does to gain an advantage over others comes from regulation and lobbying. Remove the state from the picture, and you have equality under law and pure free market. There is no such thing as a just government. There is no "improving government" or making it more efficient, or as Newt Gingrich says "using six sigma and lean" for government (this is pretty much the most absurd thing I have ever heard from a politician, but they never cease to surprise me).

We should never worry about the rich getting richer. Since for them to do so in a free market, they must figure out how to make others richer. We should worry about making a real free market. Capitalism is a system where one must make people more wealthy in order to become wealthy himself. We must work to destroy croni-capitalism, or old English style mercantilism. This is a system of government supported private business. This is what we have become. To fix this, we don't go and protest wall street. We remove government power. Even the power we think is legitimate. The power to regulate medicine, food, banking, travel and all else.

Once you recognize that without the FDA we will not all die of poisonous medicine, you will see that killing customers and getting sued is not a great business model, Once you recognize that without government building roads and trains we will still have roads and trains, that private ownership of roads and trains is better than government ownership, and you will see it will be far cheaper and no traffic when people must compete for your business of traffic. Once you realize that without government police, people will start hiring private police. The tyranny will be gone, and they will actually serve and protect you or get fired while the next company takes their business. Then, we will be truly safe.

Just as we see how absurd it would be for government to run all shoe companies, we need to realize that services like protection and travel can be handled by the market far better than the monopoly of government. Imagine what your shoes would cost were they considered too important for the private sector and so somehow handing it over to a monopoly would make it better. Everything the market handles gets better and cheaper with time. There is no reason to believe that all services and products can not be handled this way!

-Written by Jim Fisher

Ron Paul Takes On Bob Schieffer

I didn't have time to get my busy brother, so I decided to plow ahead on my own. This past Sunday, Ron Paul was on Deface the Nation with the hostile Bob Schieffer. Every shot Schieffer took at Ron, Ron was able to answer. Schieffer looked like the true insider that he is.

Here's the program.



Show Notes,

The actual Schieffer interview on Deface the Nation


Please watch/listen to The Origin & Nature of International Conflict by Hans-Hermann Hoppe.

Article by Hoppe, The Impracticability of One World Government

Republican Primary Polls

Article on Ron Paul

Rush Limbaugh and the Federal Reserve

Today I was listening to famous radio show Host, Rush Limbaugh, when I herd an excellent question. On this episode of Tea Party Hobos podcast, Jim and I review Rush's answer. Listen here.

Show notes, an excerpt from Rush's program:

BEGIN TRANSCRIPT

RUSH: Carl in Ireton, Ohio.  It's great to have you with us.  Hello, sir.

CALLER:  It's a real treat and honor to talk to you, Rush.

RUSH:  Thank you, sir.

CALLER:  Second-time caller here.  Hey, I want to get your take on something.  In the late 1970s under Jimmy Carter, we had a horrible economy with sky-high interest rates.

RUSH:  Yep.

CALLER:  Today under Obama we've got an economy that's far, far worse, but the interest rates are extremely low.  Can you explain, Rush, how this administration is holding down the interest rates and if you can, when do you think the interest rates are gonna skyrocket?

RUSH:  I don't know that they will.  The Federal Reserve is holding down interest rates.  I know you're talking about interest rates, but concurrent with this is interest and inflation.  And inflation is starting now.  It has been for a while.  They're telling us the cost of living is flat, but if you buy gasoline or food you know that they're lying to you about that.  Inflation is going up.  The Fed is keeping interest rates low as one of their so-called weapons in trying to force an economic recovery.  The belief is, and this defies logic to me, but the professed belief is that businesses are not borrowing money because of interest rates and that banks are not lending money because of interest rates.  So the Fed says if we keep interest rates low it will inspire small business to go out and borrow.

What small businesses have been saying for two years is it has nothing to do with it, we don't have any customers, we have no reason to expand, we've got no reason to borrow no matter what your interest rate is.  The banks are saying we love this interest rate being low.  We don't have to loan the money to make any money on it; we can put it somewhere with no interest rate, we can get it for nothing from the Fed, invest it in something else and grow it that way.  We don't have to lend money to make money on it.  Normally banks earn an income by loaning money to people.  They pay it back with interest, and that's the bank's income.  Well, with no interest, the banks can get that money from the Fed that they would otherwise loan and invest it in other places rather than individuals who want to borrow money.  (interruption) No, it wouldn't stimulate the economy to raise interest rates right now.

But there's a dual-edged sword.  They're not trying to stimulate; they're trying to make sure that the economy doesn't go off the cliff.  But it's misguided, it's all based on a false belief that if interest rates were just lower that people would borrow money, particularly small business.  You can hear Obama still talking, why do you think Obama's still out there promising tax credits, "If you go hire somebody, we'll give you a $3,000 tax credit for every new hire."  Because businesses aren't growing, and they're not growing because there aren't any customers, and there are not any customers because unemployment is sky-high.  So there's no reason to expand.  They figured that they could get people to borrow money with low interest rates.  And it hasn't worked out.

I don't want to gloss over this.  All banks get their money from the Fed.  And they're charged interest for that money.  When that interest rate is hardly anything, the banks can get money for practically nothing.  And instead of having to make money by lending it they simply go out and buy stock in Apple or whatever they do with it, and that's how they grow, they don't have to lend it.  So nobody is lending money.  The people that want to borrow are not considered good credit risks because of the state of the economy.  So it's just mismanagement of the money supply and so forth by the Fed, as far as I'm concerned.  And interest rates are totally at the purview now of the Fed.  If the Fed wants to raise them they will.

It's good for people who can borrow.  The mortgage interest rate's pretty low.  But, on the other hand, people who live on fixed incomes off of their interest rates going high, they're sitting flatline, zero.  Inflation doesn't have anything to do with the interest rate right now because they're two separate things.  The interest rates is artificial.  The interest rates being kept artificially low by the Fed as a weapon, as a piece of ammunition, really.  Interest rates right now have really no relationship to inflation.  If the Fed would delink interest rates to their control and let lending institutions set the rate based on what they thought they could get for it, if the market were allowed to rule, you might have some stabilizing in this, but none of that's gonna change really until there is some legitimate economic growth.  And the policies that are in place here are stymieing economic growth.

This is the point that anybody who's paying any attention to understands.  This administration is just a giant roadblock to growth, everything they've done.  They're taking money out of the private sector and giving it to the public sector, unions, more bureaucracy, EPA, I don't care what agency you want to talk about, they're getting more money, and then the money that does end up back in the private sector ends up there in the form of food stamps or school dinners or more government services or what have you, health care benefits.  But none of it the result of any economic activity that's creating growth and new revenue.  The pie is not expanding right now.  GDP they say is at 2.5%.  We can look out and see that we don't have two and a half percent growth in the economy in the last quarter, there's no sign of it, other than in very small, unique sectors.  But overall it just isn't happening.


The misery index with Carter did calculate, interest rates in some places got up as high as 15% back in the Jimmy Carter days.  And it was just Fed policy back then not to monkey with it.  These people, as far back as I can remember, the past ten years, the Fed has been paranoid about inflation.  So they've kept interest rates low.  What really has set in is deflation in some sectors, which is not good.  You might think it's good for the consumer, but deflation for manufacturing is not good.  If you can't recoup the cost of producing a product, then you can't stay in business, much less make a profit on it.  And deflation makes it almost impossible to make back your costs on a product so there's deflation in certain parts of the economy, inflation in others.  All the while they're trying to tell us that the cost of living index, CPI, is pretty much level.  But it's not.

As I say if you buy gasoline or food, you know, the cost of living is getting more expensive.  And now oil spiked up over a hundred bucks a barrel, what is it, 102 at the end of the day yesterday.  So it's only gonna get worse.  That's why this bunch, Obama and the Democrats have to go because all of this is by design, all of this is based on a mistaken economic belief that central planning and a giant central authority can create new products, dictate economic growth, target economic growth, and it cannot.  This bunch has proven it time and time again with every stimulus, every policy.  Just the other day the CBO guy admitted to Jeff Sessions, "Yeah, over ten years, the stimulus plan of 2009 will be a drag on economic growth.  It will shrink the economy."  Why is that?  Why would a 700 or almost $850 billion stimulus shrink the economy over ten years?  Because it can do nothing else.  It takes that money out of the private sector.

Before you can spend $850 billion of the government you gotta take it out.  It's a net wash.  You take the money out of a collective number of pockets to equal $850 billion, and then you spend it again, you put it somewhere else in the economy?  So we took it away from producers, and who ended up getting it?  Unions, teachers, states, private sector.  There was no infrastructure activity.  There were no new schools built.  There weren't any shovel-ready jobs.  All of that was a lie, all of it was smoke and mirrors.  The stimulus was a slush fund designed to keep union workers employed during the recession so that their dues were collected, so that Democrat campaign coffers were continually replenished.  That's all it was.  And the state of Wisconsin is proof of it.  We cataloged it as it was happening in the state of the Wisconsin.

END TRANSCRIPT

Newt, the Political Opportunist

Since the political wind has blown in Newt Gingrich's direction (see here), I thought I'd interact with Newt's article dated on the 8th of November (read here). Now I must confess Newt Gingrich is a very intelligent man, but he is sadly a political opportunist. He simply doesn't have a consistent bone in his body except for one. That bone is to ensure government power goes toward Republicans.

In his article he says he wants to repeat what Ronald Reagan did in the 80s. Being the historian, he states an observation in the first paragraph.

Since the Great Depression, recessions in America before this last one have lasted an average of 10 months. The longest previously has been 16 months. But here we are 46 months after the last recession started, and there is still no real recovery.

Now why is that? Is it really merely because President Obama has done a great job at making certain no recovery takes place. Well, I have to agree. Anything President Obama could do to slow down the train that is heading off of the cliff is being ignored. Yet why do we assume that slowing down the train will somehow prevent the train from wrecking?


He appeals to the era of Reagan,

Ronald Reagan did it, with arguably worse circumstances than today: double digit inflation, double digit unemployment and double digit interest rates. We did it when I was Speaker of the House, when the American people created 11 million new jobs in four years. Returning to these principles would restore another economic boom within a year.

Assumption: High interest rates were bad. But why were they bad? They were bad because the Federal Reserve, with Paul Volcker, didn't print money for the Big Boys. Instead, they reduced the money supply and increased the value of the dollar. Now depending on your point of view, you might think this was bad. You may even think Reagan saved our economy and perhaps in the way of taxation, he helped. But as these websites explain, Volcker's policy reversed our money from being inflated in the manner that the current Federal Reserve is doing.

Read here:

Carter cannot be blamed for the double-digit inflation that peaked on his watch, because inflation started growing in 1965 and snowballed for the next 15 years. To battle inflation, Carter appointed Paul Volcker as Chairman of the Federal Reserve Board, who defeated it by putting the nation through an intentional recession. Once the threat of inflation abated in late 1982, Volcker cut interest rates and flooded the economy with money, fueling an expansion that lasted seven years. Neither Carter nor Reagan had much to do with the economic events that occurred during their terms

and here

Although inflation came down slightly in the mid 1970s, prices soon began to accelerate to the point that, by the end of the decade, curbing inflation replaced reducing unemployment as the Carter administration's primary economic priority.


To this effect, in July 1979 Jimmy Carter appointed Paul Volcker to succeed G. William Miller as Chairman of the U.S. Federal Reserve. Although there remains some debate about why Carter decided on Volcker, who was then serving as President of the Federal Reserve Bank of New York, the move signaled Carter's sanctioning of a disinflationary monetary policy.

But the underlying and fundamental problem to our economy's "boom and bust cycle" [think the dot.com bubble, housing bubble so on and so forth] is the Federal Reserve's power to print money and the government's power to regulate by a command and control economy.

Newt states something that all Republicans are saying.

My economic recovery plan also narrows the Federal Reserve’s statutory mandate to focus on price stability so as to maintain a stable dollar without inflation. That ensures job creating investors from the world over that their investments in America will not be depreciated by a declining dollar or inflation.

Now what does Newt mean by this? Does he plan on more money printers? Or does he plan to do what Paul Volcker did and reduce the money supply, thereby increasing interest rates?

It is simply difficult to know for certain since no one knows which Newt will show up to a political discussion. As Robert Higgs notes in his article,

Franklin Roosevelt "did bring us out of the Depression," Newt Gingrich told a group of Republicans after the recent election, and that makes FDR "the greatest figure of the 20th century."

We must remember that Newt may be a great historian and knows full well the error of price controls, but he is in government. What is good for Americans & liberty is bad for government, and what is bad for Americans and liberty is good for government. As he states later in the article:

Finally, my plan slashes the runaway regulatory burdens that are killing jobs. This includes repealing and replacing Obamacare...

Please don't miss the barely stated assumption. He doesn't want to eliminate government's role in solving our problems [please think of him working with Hilary on green issues]. He simply wants to have Republicans doing the solving by replacing Obamacare with something else.

So if you think that Roosevelt's policies of extending the Great Depression was a good idea, then I am not certain how Newt is your man.

Podcast: Hobos Discuss Herman Cain

This evening, Jim and I did another Tea Party Hobos Podcast. We discussed Herman Cain and his economic positions. We mostly discussed Cain's views of the Federal Reserve. Once again, Jim shines in his understanding of economics, and hopefully, if you are trying to understand the substance of our economic problems, Jim will have much to offer in this podcast. Enjoy!