". . . a republic, if you can keep it."
. . . and more generally, of government spending helping the economy.
When government takes your money, then gives *some* of it back to you, it is not a stimulus.
The economist being interviewed is Robert Higgs who has devoted much of his career toward dispelling this destructive myth.
There is no area in which Republicans have further strayed from our traditions than in foreign affairs.
Generations of conservatives followed the great advice of our Founding Fathers and pursued a restrained foreign policy that rebuffed entangling alliances and advised America, in the words of John Quincy Adams, not to “go abroad looking for dragons to slay.”
Sen. Robert Taft, the stalwart of the Old Right, urged America to stay out of NATO. Dwight Eisenhower was elected on a platform promising to get us out of the conflict in Korea. Richard Nixon promised to end the war in Vietnam.
Republicans were highly critical of Bill Clinton for his adventurism in Somalia and Kosovo. As recently as 2000, George W. Bush campaigned on a “humbler” foreign policy and decried nation-building.
But our foreign policy today looks starkly different.
Neoconservatives who have come to power in both the Democratic and Republican parties argue that the U.S. must ether confront every evil in every corner of the globe or risk danger at home. We need to “fight them over there” they say, so we don’t have to “fight them over here.” This argument presents a false choice. We do not have to pick between interventionism and vulnerability. The complexity of our world is exactly why the lessons of our past should ring true and demand a return to a traditional, pro-American foreign policy: one of nonintervention.
Moving forward, I suggest that we as Americans adhere to these five principles:
1. We do not abdicate American sovereignty to global institutions. The purpose of the United States is to protect the liberty of the American people. We should never allow the WTO, NAFTA, the U.N. or the Law of the Sea Treaty to transfer power from America to an international body.
2. We provide a strong national defense, but we do not police the world. America should be armed with defensive weapons capable of repelling any attack. We should spend all appropriate money to make sure that no country in world can credibly threaten us.
Unfortunately, our foreign policy is undermining our security. We have more than 700 military installations in 135 countries around the globe. We have 50,000 troops in Germany, 30,000 in Japan, and 25,000 in South Korea. Worse, we have our brave men and women bogged down occupying Iraq and Afghanistan in the midst of ethnic strife and civil war.
We spend more than $1 trillion per year on our foreign policy, and our military is stretched thin. We can no longer afford to be the world’s policeman. We must bring our troops home from around the world, cut overseas spending and strengthen our national defense.
3. We obey the Constitution and follow the rule of law. The Constitution clearly states that only Congress can declare war. Congress abandoned that responsibility during the buildup to the Iraq war and must never make that mistake again. When wars are undeclared, they drag on with no clear plan or exit strategy. If we must fight, we should do so with overwhelming force, win as quickly as possible and promptly withdraw.
4. We do not engage in nation-building. Conservatives know government is a poor tool to solve problems. It then makes no sense that we would think that our government could build civil societies and solve the tremendously complex problems of a developing country. Nation-building does not work. It places a tremendous burden on our military and takes directly from the pockets of the American taxpayer. The best thing we as Americans can do is offer friendship while setting a good example of what a free and prosperous society looks like. Ronald Reagan wanted America to be a “shining city on the hill.” We should make that our goal.
5. We stay out of the internal affairs of other nations. America should conduct trade, travel and diplomacy with all willing nations. Intervention, however, always has unintended consequences and almost always gets us in trouble. For example, in 1953, our CIA helped overthrow Mohammad Mosaddeq, the democratically elected prime minister of Iran and installed the Shah of Iran, a ruthless dictator. The blowback from our actions was in large part responsible for the extremist Iranian Revolution of 1979, the taking of our hostages and the many problems we have had with Iran ever since. So much of our intervention makes no sense. We backed Saddam Hussein for much of the 1980s, and then twice went to war against him. In the 1990s, we bribed North Korea not to pursue atomic weapons with nuclear technology, and Kim Jong-il used that assistance to build several nuclear bombs.
Intervention simply does not serve our long-term interests.
The world is a dangerous place and we should be concerned, but intervention and militarism cannot solve our problems. The answers to our foreign policy problems lie in defending our soil, scaling back our global military footprint and trading with all willing partners. We have strayed far from this philosophy, but we can get back on track by looking to our Constitution, our traditions and the example of our Founding Fathers.
UN? IMF? World Bank? Israel? Nato? South Korea? Japan?
I often debate my friends’ casual (naive?) suggestions that the state control commerce, fight the war on drugs, and bailout incompetent companies. I argue, as Bastiat does in The Law, that government is our collective defense of life, liberty and property, and that whatever government does beyond this mandate is offensive to both freedom and prosperity because government must take from one to do for another.
When my friends give ground in the debate, they usually do so grudgingly, retreating to the sacred cows of statists – public education, public transportation, pollution laws and child labor laws.
There is much to be said about each of these. Below, I excerpt a couple of articles from mises.org regarding child labor laws.
The first is a long list of snippets from the Child Labor Amendment Debate in the 1920s.
The Trouble With Child Labor Laws
“Let’s say you want your computer fixed or your software explained. You can shell out big bucks to the Geek Squad, or you can ask – but you can’t hire – a typical teenager, or even a preteen. Their experience with computers and the online world is vastly superior to that of most people over the age of 30. From the point of view of online technology, it is the young who rule. And yet they are professionally powerless: they are forbidden by law from earning wages from their expertise.
Might these folks have something to offer the workplace? And might the young benefit from a bit of early work experience, too? Perhaps – but we’ll never know, thanks to antiquated federal, state, and local laws that make it a crime to hire a kid.
Pop culture accepts these laws as a normal part of national life, a means to forestall a Dickensian nightmare of sweat shops and the capitalist exploitation of children. It’s time we rid ourselves of images of children tied to rug looms in the developing world. The kids I’m talking about are one of the most courted of all consumer sectors. Society wants them to consume, but law forbids them to produce.
You might be surprised to know that the laws against ‘child labor’ do not date from the 18th century. Indeed, the national law against child labor didn’t pass until the Great Depression – in 1938, with the Fair Labor Standards Act. It was the same law that gave us a minimum wage and defined what constitutes full-time and part-time work. It was a handy way to raise wages and lower the unemployment rate: simply define whole sectors of the potential workforce as unemployable.
By the time this legislation passed, however, it was mostly a symbol, a classic case of Washington chasing a trend in order to take credit for it. Youth labor was expected in the 17th and 18th centuries – even welcome, since remunerative work opportunities were newly present. But as prosperity grew with the advance of commerce, more kids left the workforce. By 1930, only 6.4 percent of kids between the ages of 10 and 15 were actually employed, and 3 out of 4 of those were in agriculture.
In wealthier, urban, industrialized areas, child labor was largely gone, as more and more kids were being schooled. Cultural factors were important here, but the most important consideration was economic. More developed economies permit parents to ‘purchase’ their children’s education out of the family’s surplus income – if only by foregoing what would otherwise be their earnings.
The law itself, then, forestalled no nightmare, nor did it impose one. In those days, there was rising confidence that education was the key to saving the youth of America. Stay in school, get a degree or two, and you would be fixed up for life. Of course, that was before academic standards slipped further and further, and schools themselves began to function as a national child-sitting service.” (Read more from mises.org)
The Child Labor Amendment Debate of the 1920s
“Few causes are so shrouded in sanctimonious mist as the movement, early in the twentieth century, to abolish child labor. Sympathetic journalists and historians dubbed it ‘the crusade for the children’ and depicted its foes as avaricious manufacturers.
Some self-styled ‘child savers,’ especially the women novelists and inveterate reformers of New England, were sincerely concerned about exploited children. Others, however, intended to reconstruct the family and install ‘government as overparent,’ to use the words of Colorado Judge Ben Lindsey. Opponents of the Child Labor Amendment, far from being the calloused plutocrats of legend, included noted Progressives, urban Catholics, and thousands of farm families.
The fight over the amendment highlighted the growing breach between those loyal to Jeffersonian America and those who sought to concentrate power in the grandest overparent, Washington, D.C.
. . . .
Here you are, a Jeffersonian Democrat, the cardinal principle of which doctrine was the integrity of the states, urging me, a Hamiltonian Republican, to support a constitutional amendment enabling the national government to deal with the children of the states. Strange times, these are. But I think I can encourage you to expect favorable action, as the women always get nowadays what they ask for. – Senator William Borah (RID)
to a constituent, 1924:
[A] communistic effort to nationalize children, making them primarily responsible to the government instead of to their parents. It strikes at the home. It appears to be a definite positive plan to destroy the Republic and substitute a social democracy. – Clarence E. Martin, President American Bar Association” (Read more from mises.org)
“Who controls the past controls the future. Who controls the present controls the past.” ~George Orwell
I’m pretty excited about today’s posts.
When I speak about freedom and Austrian Economics and the evils inherent in Socialism, people often tell me they are not speaking of Socialism as was manifest in the Soviet Union, they are speaking of socialist democracies like Sweden. In other words, they don’t believe in big crimes, but think little crimes are okay.
I believe that in socialist democracies it’s not the socialist (ie. coercive) institutions which are working, it’s the pockets of freedom that exist around them. Encroaching socialism can appear very benign in a prosperous country, because it’s proponents claim credit for the wealth and opportunities created by the remaining pockets of freedom.
Today, I excerpt from three outstanding essays I found at the Ludwig Von Mises Institute.
Sweden: Poorer Than You Think by William L. Anderson
One of the enduring myths of the ‘Third Way’ welfare state is that a nation as a whole can have a high standard of living–even if no one really has to work–as long as government transfers massive amounts of wealth from those who are well off to those who are less well off. For the past four decades, we have been inundated with news stories, books, and public commentary, all of which have exhorted us to be like Sweden.
The Swedes, we have been told, enjoy free medical care, generous welfare benefits, time off from work, and subsidies for just about everything. When one counters that Swedes pay enormously high taxes, the standard reply is, ‘That is true, but look at what they receive for their payments.’
According to a recent study, however, the cat is out of the bag. Relative to household in the United States, Swedish family income is considerably less. In fact, the study concludes, average income in Sweden is less than average income for black Americans, which comprise the lowest-income socioeconomic group in this country.
. . . .
In defense of the Swedes, let me first say that simple comparisons of income can be deceiving. While I have never been to Sweden (even though I have relatives there), I would think that even the poorest sections of Stockholm and other Swedish cities are more livable and attractive than what one finds in many U.S. cities. Even with the high taxes, I think I would rather live in downtown Stockholm than in downtown Detroit or Newark.
However, the study alerts us to something that is much more important, and that is that the European welfare states are not making their citizens wealthier. Over time, the cracks in these relatively wealthy nations are growing larger, and if the disease is not arrested, much of Europe will tumble off into real poverty in the not-so-distant future. Europeans–and, most likely, Americans–seem destined to learn the hard way that large, seemingly intractable welfare systems have their way of destroying the Goose that Laid the Golden Eggs.
While people can debate the present condition of Swedes in Stockholm versus blacks in Harlem, there is a deep issue here that people seem to forget when it comes to welfare states: they are destructive at their roots. Advocates of welfarism concentrate only upon distribution while vilifying production. Such a state of affairs cannot go on forever as governments are forced to cannibalize their own capital structure over time in order to make the system to continue to work.
. . . .
The Swedes and other northern Europeans are somewhat lucky in that they have had a relatively high standard of living. People in southern European nations like Italy and Spain–where high taxes and vast regulatory agencies abound–find themselves to be much poorer and with no prospects of real improvement.
Unfortunately, many Europeans (like our Canadian neighbors) believe that a vast welfare apparatus makes them morally superior to nations that do not have the same scope of benefits. (While one can point out that the United States has a huge welfare bureaucracy itself, it does not offer the same ‘generous,’ long-term benefits of the European states.) While they prattle on about their moral superiority and their egalitarianism, however, something else is happening. They are slowly becoming poorer and poorer, and the welfare state cannot save them. It can only accelerate their downward slide. (Read more from mises.org)
The Sweden Myth by Stefan Karlsson
The alleged recent success of the Swedish economy has allowed welfare statists both inside and outside of Sweden to argue that high taxes and an extensive welfare state are good for the economy. To fully understand this fallacy, we should review Sweden’s economic history.
Until the second half of the 19th century, Sweden was fairly poor. But far-reaching free market reforms in the 1860s allowed Sweden to benefit from the spreading Industrial Revolution.
And so, during the late 19th and early 20th centuries, Sweden saw its economy rapidly industrializing, driven by the many Swedish inventors and entrepreneurs.
During that time, Sweden produced extraordinarily many inventions, given its small population, including: dynamite, invented by Alfred Nobel (who established the Nobel Prize); the self-aligning ball bearing, invented by Sven Wingquist (who used this to create the SKF company); the sun-valve, invented by Gustav Dahlen (who used it to found industrial gas company AGA); the gas absorption refrigerator, invented by Baltzar von Platen (which was later used by Electrolux).
In addition, there were countless non-inventing entrepreneurs during that period: car manufacturers Volvo and Saab, and telecommunications company Ericsson. Indeed, with just a few exceptions, nearly all large Swedish companies were started during the late 19th and early 20th centuries, which was not only a period of strong growth, but also the time when the foundation for later economic growth was laid.
Another factor which continued Swedish prosperity was the fact that Sweden was able to stay out of both World Wars, and indeed all other wars as well. Sweden is in fact the country with the longest consecutive period of peace, having fought no war since 1809, when Sweden was invaded by Russia, losing Finland to the invader. . . .
As a result of its free market policies, the resourcefulness of its people, and its successful avoidance of war, Sweden had the highest per-capita income growth in the world between 1870 and 1950, by which time Sweden had become one of the world’s richest countries, behind only the United States and Switzerland, and Denmark (who have since also fallen behind because of high taxes).
But the foundation for future trouble had already been created. In 1932, the Social Democrats rose to power in the face of the Great Depression. And like FDR in America and Adolf Hitler in Germany, they started to expand government power over the economy. Until 1932, government spending had been kept below 10% of GDP in Sweden, but the Social Democrats, under their leader Per Albin Hansson, wanted to change this and remake Sweden into a ‘folkhem’ (‘people’s home’), a term Swedish Social Democrats adopted from the Fascists in Italy.
Between 1950 and 1976, Sweden experienced an expansion in government spending unprecedented during a period of peace, with government spending to GDP rising from about 20% in 1950 to more than 50% in 1975. Virtually every year, taxes were increased while the welfare state expanded relentlessly, both in the form of a sharp increase in the number of government employees and ever more transfer payment benefits.
During the first 20 years, this relentless government expansion took place seemingly without ill effect, as Sweden benefited from rapid global growth – although Sweden’s growth had already started to slip in relative terms, from well above average to just average. This changed in the 1970s after Olof Palme, from the left wing of the Social Democratic party became Prime Minister. Palme stepped up the socialist transformation in Sweden, rapidly increasing anti-business regulations and sharply increased payroll taxes.
The payroll-tax increases, along with increasing wage demands from unions, made Swedish businesses highly uncompetitive on the global markets, something which Palme decided to solve by devaluing the Swedish krona. As a result, price inflation rose sharply, leading to repeated devaluations. . . .
. . . . the recession became Sweden’s deepest by far since the Great Depression, with GDP in 1993 being 5% lower than in 1990, with employment falling more than 10%, and the budget deficit rising to more than 10% of GDP. By then Sweden had fallen to between 15th and 20th place in international income comparisons, a decline from which it has never
since recovered.
After this deep downturn, Sweden has performed much better for a number of reasons. The 20% decline in the value of the krona in late 1992 gave a strong boost to exports and together with the dramatic lowering of interest rates, this helped kick-start a cyclical recovery in late 1993. Moreover, a number of free market reforms implemented during Ingvar Carlsson and conservative Carl Bildt (who was Prime Minister between 1991 and 1994) had helped raise the structural growth potential of the Swedish economy.
Apart from the already mentioned reforms of reduced marginal tax rates and abolished currency controls, deregulated bank lending and significantly lower inflation, this included privatizations of several state-owned companies and deregulation of several key sectors, including the retail sector, the telecommunications sector and the airline industry. Also, when the massive budget deficit was eliminated, even the Social Democrats realized the need for deep spending cuts, which together with the typical cyclical decline in the burden of spending during booms helped reduce the extremely bloated burden of government spending somewhat.
All of this has helped Sweden recover in relative terms from the stagnation of the 1970s and 1980s and the deep economic downturn in the early 1990s. It is this relative recovery that is now seized upon by the Social Democrats and their sympathizers inside and outside of Sweden when they claim that the Swedish model of high taxes and a big welfare state is successful.
Yet as should be clear, the relative improvement of performance is due not to high taxes (lower now than previously), but to free-market reforms. (Read more from mises.org)
How the Welfare State Corrupted Sweden by Per Bylund
Old people in Sweden say that to be Swedish means to supply for your own, to take care of your self, and never be a burden on anyone else’s shoulders. Independence and hard work was the common perception of a decent life, and the common perception of morality. That was less than one hundred years ago.
My late grandmother used to say something had gone wrong with the world. She was proud to never have asked for help, to have always been able to rely on herself and her husband. . . .
My grandmother, born in 1920, was of the last generation to have that special personal pride, of having a firm and deeply rooted morality, of being a sovereign in life no matter what – to be the sole master of one’s fate. The people of her generation experienced and endured one or two world wars (though Sweden never took part) and were raised by poor Swedish farmers and industrial workers. They witnessed and were the driving force behind the Swedish ‘wonder.’
They would gladly offer to help those in need even if they only had little, but were not likely to accept anyone’s help if offered. They felt pride in being competent to take care of themselves; they cherished independence of others, of never having to ask for help. They figured, if they couldn’t make it themselves, they had no right to ask for help.
. . . .
[Today] Swedes generally welcome proposals to hand over more power to politicians and they even tend to ask for higher taxes.
Decent morality is long gone. It was completely destroyed in little more than two generations – through public welfare benefits and the concept of welfare rights.
. . . .
[M]y parents’ generation went to public schools where they were taught mathematics and languages as well as the superiority of welfare and the morality of the state. They learned the workings of the machinery of the welfare state and gained a totally new (mis)conception of rights: all citizens enjoy a right – only through being citizens – to education, health care, unemployment, and social security.
Being an individual, they were taught, means having a right to support for your individual needs. Everybody has a right to all the resources necessary to pursue one’s own and society’s happiness, they were told. And everybody should enjoy the right to put their children in state daycare centers while working, making it possible for every family to earn two salaries (but not enough time to raise their children). The opportunities for “the good life,” at least financially, must have seemed enormous to the older generations.
This new morality permeated the populace and became the “natural” state of things, at least in their minds. This generation, born during the two or three decades following World War II, became considerably different from their parents’ generation morally and philosophically. They got used to the enormous post-war economic growth (thanks to Sweden never entering the war) and the ever-increasing welfare rights of the rapidly growing state.
. . . .
The voting masses, children of the welfare state dependent on its system of logic, supported the tax hikes, which quickly climbed to 50% and higher. And they demanded social benefits at taxpayers’ expense. . . .
Through the powerful labor unions, wage-earning Swedes were awarded raises every year regardless of real productivity, and in time annual raises of salaries became normality. People who didn’t get a raise started considering themselves “punished” by their evil employer, and there were increasing demands for legal help in the struggle against employers. One has a “right” to a better salary next year just as the current salary must be better than last year’s; so the thinking goes. . . .
The children of this generation, born in the 1970s, ’80s, and ’90s commonly had a “free” upbringing (based on the ideals of 1968), essentially meaning a childhood “free from rules” and “free of responsibility.” For this generation there is no causality whatsoever in social life; whatever you do is not your responsibility – even having children. These are the current younger adults in Swedish society.
I am myself part of this second generation of people raised with and by the welfare state. A significant difference between my generation and the preceding one is that most of us were not raised by our parents at all. We were raised by the authorities in state daycare centers from the time of infancy; then pushed on to public schools, public high schools, and public universities; and later to employment in the public sector and more education via the powerful labor unions and their educational associations. The state is ever-present and is to many the only means of survival – and its welfare benefits the only possible way to gain independence. . . .
On May 14, the national trade workers’ union demanded the state “redistribute” jobs through offering people in their 60s state pensions if they step down and their employers employ young, unemployed people in their stead. In the labor union’s calculations, such a stunt would “create” 55,000 jobs.
What this shows is that the only perceivable way of finding jobs for the young seems to be to “relieve” older people of theirs; job positions are scarce and unemployment is increasing even as demand for goods and services is going up – thanks to heavy state regulation in the marketplace. The welfare state creates problems and conflicts on many levels, forcing people to compete for shares of continuously decreasing wealth. . . .
My mother, a middle school teacher, has had to face her pupils’ parents demanding she do “something” about their stressful family situation. They demand “society” take responsibility for their children’s upbringing since they have already spent “too many years” caring for them. (“Caring” usually means dropping them off at the public daycare center at 7 am and picking them up again at 6 pm.)
They loudly stress their “right” to be relieved from this burden. . . .
What we are now seeing in Sweden is the perfectly logical consequence of the welfare state: when handing out benefits and thereby taking away the individual’s responsibility for his or her own life, a new kind of individual is created – the immature, irresponsible, and dependent. In effect, what the welfare state has created is a population of psychological and moral children – just as parents who never let their children face problems, take responsibility, and come up with solutions themselves, make their offspring needy, spoiled, and utterly demanding. (Read more from mises.org)
What I see in this, is our 22 million government bureaucrats looking for meaning and excitement in their empty, pathetic lives. The founding fathers had it right. Don’t engage in foreign wars.
They do not hate us because we are free. They do not hate us because they are evil. They hate us because we are over there.
“Since 1945, the USA has been responsible either directly or indirectly of helping remove dozens of governments, many democratically elected, around the world. Sometimes the events are kept secret for years and only slowly come out. Other times, the events are the cause of demonstrations, anger and resentment at the time they occur. . . .
In the list below only successful changes of government are listed. Many attempts have failed. Cuba is the best example of this.
| Year | Country | Reason Given | Actual Reason |
| 1949 | Syria | Communism | Elected government against USA political interests and pro-Palestinian. |
| 1949 | Greece | Communism | Elected government against USA political and economic interests. |
| 1952 | Cuba | None | Elected government against USA business interests. |
| 1953 | Iran | None | Elected government against USA oil interests. |
| 1953 | British Guyana | None | Access to sugar and bauxite. |
| 1954 | Guatemala | Communism | Elected government against USA business interests. |
| 1955 | South Vietnam | Communism | French backed leader replaced by USA backed leader. |
| 1957 | Haiti | Haiti is near the USA | Previous government against USA business interests. |
| 1958 | Laos | None | Pro-USA government wanted. |
| 1959 | Laos | None | Pro-USA government wanted. |
| 1960 | South Korea | Communism | Previous leader not strong enough for USA. |
| 1960 | Laos | None | Pro-USA government wanted. |
| 1960 | Ecuador | Communism | Previous government too independent in foreign policy. |
| 1963 | Dominican Republic | Business Interests | Elected government against USA business interests. |
| 1963 | South Vietnam | None | Previous leader’s policies led to televised suicides. |
| 1963 | Honduras | Communism | Pro-USA government and access to resources. |
| 1963 | Guatemala | Communism | Military government was about to allow elections. |
| 1963 | Ecuador | None | Elected government too independent. |
| 1964 | Brazil | Communism | Access to resources and cheap labour. |
| 1964 | Bolivia | Communism | Previous government too independent in foreign policy. |
| 1965 | Zaire | None | Access to cobalt, copper and diamonds. |
| 1966 | Ghana | None | Previous government too independent in foreign policy. |
| 1967 | Greece | None | Military bases. |
| 1970 | Cambodia | None | Previous king against USA political interests. |
| 1970 | Bolivia | None | Country took ownership of its oil and tin. |
| 1972 | El Salvador | Communism | Elected leader against USA business interests. |
| 1973 | Chile | Communism | Elected government against USA business interests. |
| 1975 | Australia | None | Elected government had unsuitable foreign policy. |
| 1979 | South Korea | None | Pro-USA government wanted. |
| 1980 | Liberia | Democracy | Pro-USA government wanted. |
| 1982 | Chad | None | Pro-USA government wanted. |
| 1983 | Grenada | Democracy | Pro-USA government wanted. |
| 1987 | Fiji | Democracy | Previous elected government supported nuclear-free Pacific. |
| 2002 | Venezuela | None | Disagreed with foreign policy of elected government. |
| 2004 | Haiti | Fraudulent elections | Disagreed with economic policy of elected government. |
”
William Blum, USA writer from the book, “Rogue State”:
“From 1945 to the end of the [20th] century, the USA attempted to overthrow more than 40 foreign governments, and to crush more than 30 populist-nationalist movements struggling against intolerable regimes. In the process, the USA caused the end of life for several million people, and condemned many millions more to a life of agony and despair”.
Michael Krenn, quoting the USA charge d’Affairs in 1929:
“Until the Venezuelan people could be trusted to make the right decisions concerning their political and economic direction – and that time was deemed to be in the very distant future – it was best for all concerned that they be kept safe from democracy.”
CIA document, dated 10 September 1973 about Chile:
“The coup attempt will begin September 11. All three branches of the armed forces and the Carabineros are involved in this action. A declaration will be read on Radio Agricultura at 7 A.M. on 11 September.”
Jack Kubisch, Deputy Assistant Secretary of State. Testimony before the USA House Subcommittee on Inter American Affairs 20 September 1973 about the Chilean coup:
“Gentlemen, I wish to state as flatly and as categorically as I possibly can that we did not have advance knowledge of the coup that took place on September 11.”
Pentagon’s Planning Guidance for the Fiscal Years 1994 – 1999, a USA planning document:
“Our first objective is to prevent the re-emergence of a new rival… we must maintain the mechanisms for deterring potential competitors from even aspiring to a larger regional or global role.”
Bill Clinton, USA president, speaking in Greece;
“When the junta took over in 1967 here the United States allowed its interests in prosecuting the Cold War to prevail over its interests – I should say its obligation – to support democracy, which was, after all, the cause for which we fought the Cold War. it is important that we acknowledge that.”
Read more at krysstal.com (Including a brief elaboration of each coup.)
“Navy Vet Honored, Foiled Israeli Attack
. . . . Terry Halbardier[‘s] bravery and ingenuity as a 23-year-old Navy seaman spelled the difference between the murder of 34 of the USS Liberty crew and the intended massacre of all 294.
The date was June 8, 1967; and for the families of the 34 murdered and for the Liberty’s survivors and their families, it is a ‘date which will live in infamy’ — like the date of an earlier surprise attack on the U.S. Navy.
The infamy is two-fold: (1) the Liberty, a virtually defenseless intelligence collection platform prominently flying an American flag in international waters, came under deliberate attack by Israeli aircraft and three 60-ton Israeli torpedo boats off the coast of the Sinai on a cloudless June afternoon during the six-day Israeli-Arab war; and (2) President Lyndon Johnson called back carrier aircraft dispatched to defend the Liberty lest Israel be embarrassed — the start of an unconscionable cover-up, including top Navy brass, that persists to this day.
Given all they have been through, the Liberty survivors and other veterans – who joined Halbardier to celebrate his belated receipt of the Silver Star – can be forgiven for having doubted that this day would ever come. In the award ceremony at the Visalia (California) office of Rep. Devin Nunes, the Republican congressman pinned the Silver Star next to the Purple Heart that Halbardier found in his home mailbox three years ago.
Nunes said, ‘The government has kept this quiet I think for too long, and I felt as my constituent he [Halbardier] needed to get recognized for the services he made to his country.’
. . . .
The Liberty survivors are big on getting the truth out about what actually happened that otherwise beautiful day in June 1967. Last Wednesday’s award of the Silver Star to Terry Halbardier marked a significant step in the direction of truth telling. Is it too much to hope that the example set by Nunes may embolden other lawmakers to right the wrongs done to their Liberty-veteran constituents — and thus to chip away at what’s left of the cover-up?
Halbardier said he accepted his Silver Star on behalf of the entire 294-man crew. He and fellow survivor Don Pageler expressed particular satisfaction at the wording of the citation, which stated explicitly — with none of the usual fudging — the identity of the attackers: ‘The USS Liberty was attacked by Israeli aircraft and motor torpedo boats in the East Mediterranean Sea. . . .’ In the past, official citations, like Captain McGonagle’s, had avoided mentioning Israel by name when alluding to the attack.
I think former U.S. Ambassador Edward Peck put it best in condemning this kind of approach as ‘obsequious, unctuous subservience to the peripheral interests of a foreign nation at the cost of the lives and morale of our own service members and their families.’ Strong words for a diplomat. But right on target.
Were it not for Halbardier’s bravery, ingenuity, and technical expertise, the USS Liberty would surely have sunk, taking down much – if not all – of the crew. Israeli commando helicopters were ready to take care of any personnel still that survived the sinking.
The first thing the Israeli aircraft bombed and strafed were the Liberty’s communications antennae and other equipment. They succeeded in destroying all the antennae that were functional. One antenna on the port side, though, had been out of commission and had escaped damage.
In receiving the Silver Star, Halbardier made light of his heroism, claiming that he was just a guy from Texas who could do a whole lot with simple stuff like baling wire. (In the infantry we called this kind of thing a ‘field expedient.’) In any case, with his can-do attitude and his technical training, he figured he might be able to get that particular antenna working again. But first he would have to repair a cable that had been destroyed on deck and then connect the antenna to a transmitter.
The deck was still being strafed, but Halbardier grabbed a reel of cable, ran out onto the deck, and attached new cable to the antenna so a radioman could get an SOS out to the 6th fleet in the Mediterranean.
Voila. ‘Mayday’ went out; almost immediately the Israeli aircraft and torpedo ships broke off the attack and went back to base; the Israeli government sent a quick apology to Washington for its unfortunate ‘mistake;’ and President Johnson issued orders to everyone to make believe the Israelis were telling the truth — or at least to remain silent.
To their discredit, top Navy brass went along, and the Liberty survivors were threatened with court martial and prison if they so much as mentioned to their wives what had actually happened. They were enjoined as well from discussing it with one another. As Liberty crewman Don Pageler put it, ‘We all headed out after that, and we didn’t talk to each other.’
. . . .
Despite Israeli protestations, the accumulated evidence, including intercepted voice communications, is such that no serious observer believes Israel’s ‘Oops’ excuse of a terrible mistake.
The following exchanges are excerpts of testimony from U.S. military and diplomatic officials given to Alison Weir, founder of ‘If Americans Knew’ and author of American Media Miss the Boat:
Israeli pilot to ground control: ‘This is an American ship. Do you still want us to attack?’
Ground control: ‘Yes, follow orders.’
. . . . . . . . . . . . . . . . . . . . . ..
‘But sir, it’s an American ship — I can see the flag!’
Ground control: ‘Never mind; hit it!’
Haviland Smith, a CIA officer stationed in Beirut during the Six-Day War, says he was told that the transcripts were ‘deep-sixed,’ because the U.S. government did not want to embarrass Israel.”
Read more at afterdowningstreet.org or visit ussliberty.org.
“Obama acknowledges the United States’ role in overthrowing the democratically elected Iranian government during the last century. Obama says it’s going to be difficult to overcome decades of mistrust.” (Read more from campaigniran.org)
Wow. That took courage.
“The failure of the U.S. to uphold its commitments under the Bretton Woods Agreement to redeem the dollar for gold at $35 per ounce was the primary cause of the great inflation in all the world’s currencies. Just to recap events: In 1944 the allied powers agreed that the dollar would serve the same role as gold for the purposes of international currency settlements after World War II. At that time the U.S. owned (or safe kept for allied governments who were at war and whose territories were threatened by invasion) most of the gold reserves of the allied central banks. As long as the U.S. would keep its dollar to gold ratio at the agreed-upon $35 per ounce ratio, central banks around the world could settle their trading accounts in dollars. These central banks would maintain an agreed-upon ratio of dollars to their local currencies just for this purpose. The world would be on a ‘gold exchange standard’. If one country inflated its currency, its trading partners would demand dollars in exchange far in excess of the profligate country’s ability to pay. It would be forced to deflate. Just as the case under a true international gold standard, that country’s prices would fall, its exports would increase, thus generating dollar reserves and all would be back to equilibrium. The key to this whole program was the promise of the United States itself not to inflate. But, of course, this is exactly what it did.
Theoretically, the U.S. should have been placed in the same position as any other country that inflated its currency–instead of running out of dollars, the U.S. would run out of gold. Its gold reserves did dwindle, which should have set off alarms at the International Monetary Fund, which was charged with the job of auditing the gold supplies of the U.S. and ensuring that it honored its obligations. But the IMF did not do its job. Why? This enters the arena of psychology, but I imagine that the Cold War had something to do with it. The U.S. alone was capable of protecting the Allies from the growing Soviet threat. Perhaps the Allies and the IMF felt an obligation not to criticize their protector. Who knows? But once France got the atomic bomb and a president—Charles de Gaulle—who felt comfortable acting as an equal on the international stage, it no longer felt that it needed to cow tow to the U.S. So in 1963 France demanded to be repaid in gold for its ever-increasing stockpile of dollars. This should have instilled much needed fiscal and monetary discipline in the U.S., but it did no such thing. President Johnson committed the U.S. to fighting a foreign war AND instituting new welfare entitlements—his ‘guns and butter’ policy. In 1969 President Nixon could have reversed this policy, but he feared that the inevitable recession would mean the loss of a second term, so he simply reneged on Bretton Woods and ‘closed the gold window’ in 1971. So much for U.S. honor and prestige!” (Read more from patrickbarron.blogspot.com)
There is a popular cluster of myths surrounding our Great Depression:
1) It just happened unexpectedly. (Crashes, including the one in 1929, are the predictable and inevitable consequence of inflationary monetary policies.)
2) Hoover made it worse by not helping. (Hoover intervened massively and continuously.)
3) FDR’s New Deal rescued us. (FDR continued and expanded Hoover’s interventions, close to the point of fascism.)
Lets take a look at #3. Here are a two illustrations of FDR’s New Deal policies:
Roosevelt supporter-turned-critic John T. Flynn, in The Roosevelt Myth (1944), wrote:
The NRA [National Recovery Administration] was discovering it could not enforce its rules. Black markets grew up. Only the most violent police methods could procure enforcement. In Sidney Hillman’s garment industry the code authority employed enforcement police. They roamed through the garment district like storm troopers. They could enter a man’s factory, send him out, line up his employees, subject them to minute interrogation, take over his books on the instant. Night work was forbidden. Flying squadrons of these private coat-and-suit police went through the district at night, battering down doors with axes looking for men who were committing the crime of sewing together a pair of pants.
“A hapless New Jersey tailor named Jack Magid became nationally famous after he was arrested, convicted, and imprisoned by the code police for the “crime” of pressing a suit of clothes for 35 cents when the Tailors’ Code fixed the price at 40 cents. The NRA was ruled unconstitutional by the U.S. Supreme Court on May 27, 1935.” (from mises.org)
“Executive Order 6102 is an Executive Order signed on April 5, 1933 by U.S. President Franklin D. Roosevelt ‘forbidding the Hoarding of Gold Coin, Gold Bullion, and Gold Certificates.’ The Order required most people to deliver on or before May 1, 1933 all but a small amount gold coin, gold bullion, and gold certificates owned by them to the Federal Reserve. Under the Trading With the Enemy Act of October 6, 1917, as amended on March 9, 1933, violation of Executive Order 6102 was punishable by fine up to $10,000 ($166,640 if adjusted for inflation as of 2008) or up to ten years in prison, or both. Because of this forced immediate sale of gold to the Federal Reserve at the government set price of $20.67 per troy ounce, this Executive Order is often referred to as the Gold Confiscation of 1933. Shortly after this forced sale, the price of gold from the treasury for international transactions was raised to $35 an ounce.” (from wikipedia.org)
Wow. This is a long, FANTASTIC essay by Austrian Economist Yuri Maltsev. Full version available here.
Lenin’s slogan, “Marxism is Almighty Because It Is True,” was displayed practically everywhere in the former Soviet Union.
I once met an Indian translator hired by the Political Publishing House to translate 50 volumes of the Collected Works of Marx and Engels into Malayalam. He complained the project was stalled because the Soviet propaganda officers could not find another Malayalam translator to cross check his work. . . .
In the Soviet Union, Marxism was not thought to be just an economic theory. It pretended to be the universal explanation of nature, life, and society. . . . In the name of Marxism, the death toll reached 100 million; the rivers of blood flowed from Russia to Kampuchea, from China to Czechoslovakia.
Hatred was the chief motivator of the socialist revolutionaries and their followers. Lenin regarded politics as a branch of pest control; the aim of his operations was the extermination of cockroaches and bloodsucking spiders, the myriad persons who stood in the way of his political ambitions. Yet Western hagiographers have glossed over this atrocious ruthlessness of Marxists, as historian Richard Pipes has documented. . . .
One of the common denominators between Leninists and government interventionists in the West is the belief that the problems of monopoly are the problems of ownership: only private monopolies acting out of greed are harmful. These institutions are suppressing scientific and technical progress, polluting the environment, and engaging in other conspiracies against public well-being. Government monopolies, however, were believed to be ethical and upright; they substituted the “greed” of the profit motive with a “societal interest.” Yet group bureaucrats who manage and operate the public sector are no less self-interested than those who manage and operate private business. One important difference exists, though: unlike private entrepreneurs, they are not financially responsible for their actions and they operate without institutional constraints of cost control that private property and competition induces. The enlightened minds of planners and technocrats cannot overcome the problem of economic calculation without market signals. . . . [emphasis added]
The failure of socialism in Russia, and the enormous suffering and hardship of people in all socialist countries, is a powerful warning against socialism, statism, and interventionism in the West. . . .
It is beyond the capacity of economic analysis to calculate the opportunity costs of the socialist experiment in Russia. But the human death toll from Stalin’s collectivization, purges, and Gulags is estimated by Russian historian Roy Medvedev at forty-one million people. . . .
“Despite the recent collapse of socialism and communism in Soviet Russia and Eastern Europe, socialism is alive and growing,” Gary Becker has said.
The Austrian school is also the historical bete noire of the Marxian school. Long before any other school came around to understanding the deep flaws in the Marxian approach, the Austrians had devoted an enormous amount of intellectual power to exposing its fallacies and dangers. Carl Menger refuted the labor theory of value, his student Eugen von Böhm-Bawerk demolished Marx’s views of capital, F.A. Hayek showed the incompatibility between socialism and political freedom, and Ludwig von Mises attacked the core of socialist economic theory.
It was Mises’s criticism that has proven to be the most prescient. In his 1920 essay “Economic Calculation in the Socialist Commonwealth,” he argued that the socialist economy couldn’t properly be called an “economy” at all, since the system provides no means for rationally allocating resources. It abolishes private property in capital goods, thereby eliminating the markets that produce prices with which to calculate profit and loss. The absence of rational economic calculation, and the institutional structures that undergird it, prevents any realistic assessment of the proper uses and opportunity costs and resource allocation options. “As soon as one gives up the conception of a freely established monetary price for goods of a higher order,” Mises wrote, “rational production becomes completely impossible.” The central planners of an industrial economy will find themselves in a perpetual state of confusion and ignorance, “groping in the dark.”
“One may anticipate the nature of the future socialist society,” he said seventy years before the rest of the world was to become convinced. “There will be hundreds and thousands of factories in operation. Very few of these will be producing wares ready for use; in the majority of cases what will be manufactured will be unfinished goods and production goods. . . Every good will go through a whole series of stages before it is ready for use. In the ceaseless toil and moil of this process, however, the administration will be without any means of testing their bearings.” . . .
Gorbachev’s original theory was that the socialist system was in good working order, but the people, the cogs in the communist machine, had taken to laziness, drunkenness, and were accumulating “dishonest income” in violation of socialist ethics. His first reform was to call for “a restructuring of people’s thinking.”
The anti-alcohol campaign began right away. Party bosses sternly announced that they didn’t want any “drunks” in their country. Their enforcers began a concerted effort to discover anyone with the smell of alcohol on their breath and haul them into the police station. When the police stations became overcrowded, it became routine practice to drive thousands of people about fifteen miles out of town and drop them in the cold and dark. Nearly every night, you could see armies of so-called drunks walking miles back to town in the middle of winter.
Over 90 percent of liquor stores were closed. The Party bosses did not anticipate what happened next: sugar, flour, aftershave, and window cleaner immediately disappeared from the shelves. Using these products, the production of moonshine increased by about 300 percent in one year.
The predictable result was a heavy loss of life. From 13,000 to 25,000 people died from drinking poisonous homemade alcohol. Many more died standing in lines for five hours to get the little bit of official liquor that was left. . . .
Price controls in cooperative markets were strictly enforced, so that all prices had to be the same as in state stores. For example, beef was supposed to be 4 rubles per kilo. As a working economist in Moscow, my first thought was, “all beef will disappear from the market.” But when I went to the market to see what was going on, to my surprise beef was available. It turns out that farmers were shrewdly selling 4 rubles’ worth of beef, but attached would be a huge dinosaur-sized bone that brought the total weight to one kilo. With a complex system of selling meat plus huge bones, supply and demand met and there were no meat shortages.
Things were different in the market for rabbit meat, which was supposed to sell for 3 rubles per kilo. It was impossible to find a bone heavy enough to add to the total weight that could also have plausibly come from a rabbit. Rabbit meat disappeared very quickly. . . .
The most visible results of the campaign against dishonest income were an increase in bribes and a reshuffling of power in favor of the bureaucrat-led mafia. Soviet bureaucrats were always pleased when new laws were passed because it gave them a chance to extract even more bribes. . . .
I once knew a man who was head of a huge, multi-hundred-thousand-ruble furniture manufacturing enterprise. He did his best to stay away from underground activities, and on his salary he could afford to. But he had an enemy in the Party, and one day he got a visit from a policeman accusing him of dishonesty in record keeping. (Police work is a highly valued occupation because of the opportunity for receiving bribes.) Instead of paying the appropriate bribe, the man maintained his innocence. Then a team of six accountants came into his offices and combed through his records over a period of weeks. Finally, they found a 34-ruble mistake, which they said was deliberate dishonesty.
After a hearing, the state attorney threatened the man with eight years in prison. His own attorney, whom he had to bribe, told him the best solution was to pay 15,000 rubles — divided among the prosecutors, the bureaucrats, and the judge — so the affair could end. . . .
After wreaking havoc on the economy through his first two campaigns, Gorbachev initiated a third: in favor of “labor discipline,” that is, forcing people to show up on time and work harder. In this, Gorbachev was following a similar campaign by his mentor Andropov (who had people rounded up in the streets and destroyed their lives for not acting like slaves). Gorbachev initiated harsh measures against “lazy” people, making it easier to find and prosecute anybody the government did not like. If a person was absent for three hours, they would lose their job. Instead of giving two weeks’ notice to change jobs, employees had to give two months’. . . .
Gorbachev’s final effort, before he began speaking about “the market,” was a short-lived campaign for new “quality” standards. The central plan had always emphasized the quantity of output, but never the quality. So 150,000 new bureaucrats were hired to oversee the “quality of output.” . . . resulting in more bribes and more failure. . . .
A young man from a peasant family I knew had heard that market activity was legal, and decided to raise a pig to sell in the market. For six months, this hopeful entrepreneur devoted his time and money to caring for it and feeding it, hoping he would earn twice his money back by selling it. Never was a man so happy as when he took the pig to market one morning. That night I found him drunk and depressed. He was not a drinker, so I asked him what happened. When he arrived at the market, a health inspector immediately chopped off a third of the pig. The inspector said he was looking for worms. Then the police came and picked the best part of it, and left without even saying thank you. He had to pay bribes to the officials in charge of the market to get a space to sell what was left. And he had to sell the meat at state prices. By the end of the day, he earned barely enough to buy one bottle of vodka, which he had just finished drinking. This was Gorbachev’s new market in a nutshell. . . .
Henry Kissinger, the Nobel Prize Committee, and many others have given credit to Gorbachev for the events of 1989 in Eastern Europe, which brought down the communist regimes there. Gorbachev’s real strategy in those countries, however, was to replace the old-guard Stalinists (with poor images) with young men like himself who drank the same brands of brandy. He hoped he could put smoother, smarter men in power in an effort to save socialism. The situation fell out of his control, largely because the KGB had misinformed him about how deep the hatred toward socialism was in those countries. The revolutions of Eastern Europe happened in spite of Gorbachev, not because of him. . . .
Western academics and media pundits found his support for socialism charming, if a little outdated. But the people who lived under the system felt differently. They knew socialism had proven itself the most destructive ideology in human history — responsible for untold millions of deaths. For those populations onto whom socialism was imposed, it impoverished them, wiped out their cultural heritage, and in many cases, resulted in massive bloodshed.
At his first news conference after the Soviet coup attempt, Gorbachev promised: “I will struggle until the very end for the renewal of this party. I am a true believer in socialism.”
“If you know your history, you know that in 1934 there was an attempted coup in the United States that was thwarted largely due to the efforts of U.S. Marine Corps Major General Smedley Butler (ret.)
Look it up.
Among other things, Butler was only one of 19 people ever awarded the Medal of Honor twice and the only person to be awarded a Marine Corps Brevet Medal and a Medal of Honor for two different actions.
After it dawned on him how his heroism and the heroism of the troops under his command had been misused, he wrote a book called “War is a Racket” which I can virtually guarantee you never heard about in school.
Butler concluded there are only two reasons to ever take up arms:
1. To defend the country against real – not manufactured – attacks
2. To defend the Bill of Rights
Sounds good to me.”