I'd like to begin today by saying that the economists Ron Paul mentions in his book are ones I've never heard of! One reason I majored in history was because it encompasses so many subjects, so I thought I would get an amalgam of information on a variety of topics and subjects.
So they had us read Adam Smith, Ricardo, Malthus, Keynes and, of course, Marx. I never heard of Bastiat, Mises, Hayek, Rothbard or Sennholz.
I will offer two more thoughts before continuing: The chapter challenged so many indoctrinated beliefs, and I am willing to defer on the knowledge offered by Dr. Paul.
The other is that the reason I've lagged in posting this commentary is because I have already read chapter 5 on civil liberties (something I said I wouldn't do, keep reading without posting), and it is fantastic.
O.K, here are your economic extracts:
"Economic freedom is based on a simple moral rule: everyone has a right to his or her life and property, and no one has the right to deprive anyone of these things.
To some extent, everyone accepts this principal. For instance, anyone going to his neighbor's home and taking his money at gunpoint, regardless of all the wonderful, selfless things he promised to do with it, would be promptly arrested as a thief.
But for some reason it is considered morally acceptable when government does that very thing. We have allowed government to operate according to its own set of moral rules. Frederic Bastiat, one of the great political and economic writers of all time, called this "legal plunder."
Bastiat identified three approaches we could take to such plunder:
1. The few plunder the many.
2. Everybody plunders everybody.
3. Nobody plunders anybody.
We presently follow option number two: everyone seeks to use government to enrich himself at his neighbor's expense....
Number one certainly seems to be in play, too, but Paul defends his point with evidence.
By "legal plunder" Bastiat meant any use of government that enriched one group of people at the expense of another, and which would be illegal if private individuals carried it out themselves. He was not speaking only or even primarily about programs that are supposed to help the poor. Bastiat was a keen enough observer of the human condition to realize that people of all classes are happy to use the machinery of the state, if they can get away with it, to benefit themselves instead of earning their way in the world honestly.
The rich are more than happy to secure for themselves a share of the loot -- for example, in the form of subsidized low-interest loans (as with the Export-Import Bank), bailouts when their risky loans go sour, or regulatory schemes that hurt smaller competitors or make it harder for new ones to enter an industry. Of course, industry leaders will portray such regulation as being for the public good, and media outlets, inclined to give all regulation the benefit of the doubt, will do their best to make sure Americans buy it....
At first I thought Paul was wrong, but then I thought of this and realized he is right on the regulations and the MSM!
And yet the MSM and economic community is saying we need more regulation with the banks, blah-blah, when they got the bailout Dr. Paul alludes to here!
See how he CHALLENGES YOUR INDOCTRINATED ASSUMPTIONS?!
Dr. Paul goes on to illustrate his point using sugar quotas and U.S. protectionism, mentioning how the policy benefits a narrow few while spreading the costs around to the point that
The tendency is for this fleecing of the public to get worse and worse: the concentrated benefits it brings are too hard to resist, but the dispersed costs are too small to justify any effort against it. Multiply this modest example by about a million, to account for the countless other predatory schemes that special interests have imposed on our economy, and you have some idea of the impact of legal plunder....
Once government does become involved in something, intellectual and institutional inertia tends to keep it there for good. People lose their political imagination. It becomes impossible to conceive of dealing with the matter in any other way. Repealing the new bureaucracy becomes unthinkable. Mythology about how terrible things were in the old days becomes the conventional wisdom. Meanwhile, the bureaucracy itself, with a vested interest in maintaining itself and increasing its funding, employs all the resources it can to ensuring that it gets a bigger budget next year, regardless of its performance. In fact, the worse it does, the more funding it is likely to get -- exactly the opposite of what happens in the private sector, in which those who successfully meet the needs of their fellow man are rewarded with profits, and those who poorly anticipate consumer demand are punished with losses....
Once again, Dr. Paul challenges official dogma.
My first reaction was he'd let the oil companies off the hook (and he said as much in the debates, etc. He would just have a hands-off policy), and then I got to thinking: That 18-cent tax should be wiped out altogether!
That is a definite challenge to the indoctrination, because it would drop the price of gas immediately. But if you think the issue through deeper, you realize that oil companies get deals for extraction on public lands (they reimburse the taxpayers with 7-cents on the dollar, I think) and they get generous subsidies and tax-breaks from the government.
Need further convincing?
See this:
"WASHINGTON (AP) — A five-year farm bill in Congress this week does little to address the growing global food crisis. Instead, it diverts money that could be spent feeding poor children abroad to give more subsidies for U.S. farmers now enjoying record high crop prices and incomes....
President Bush has promised to veto it.... Bush contends it's too expensive and too generous to wealthy U.S. farmers....
Oh, the stench of having to agree with Bush!!!
International aid groups have long criticized U.S. farm bills for ignoring the plight of farmers in developing countries by making them compete with wealthy, taxpayer-subsidized American growers. By maintaining the bulk of direct payments — billions of dollars in subsidies that are distributed to farmers no matter how much they grow — and other subsidies in this bill, lawmakers failed to help the poor, the groups say.
"The pigs at the trough continued to promote generous handouts from taxpayers ... even as agriculture markets are so strong and our economy so weak," said Raymond C. Offenheiser, president of Oxfam America, an international aid group."
Yes, I think Dr. Paul has made his point and convinced me!
Why would we expect a system based on legal plunder... to be a net benefit to the poor or middle class, in whose names so many government schemes are enacted? Every one of the special benefits, on behalf of which hundreds of millions of dollars are expended on lobbyists every year, makes goods more expensive, companies less efficient and competitive, and the economy more sluggish. Given that the politically influential and well connected -- neither of which includes the middle class or the poor -- are the ones who tend to win privileges and loot from the government, I do not understand why we take it for granted that the net result of all this looting is good for those who are lower on the economic ladder. And when the loot is payed for by printing money and causing inflation, which... disproportionately harms the most vulnerable, the suggestion that the least prosperous are helped by all this intervention collapses into outright farce....
Now, whatever its moral and philosophical attractiveness, the free economy I have just proposed, in which no one is allowed to use government power to loot anyone else, is sometimes criticized as a "pro-business" philosophy that favors the well-to-do. This criticism could not be more off target. As I have said, businessmen, too, want special favors from government and lobby energetically for all kinds of wealth transfers to themselves. Very rarely does a business owner come to my office to congratulate me on my fidelity to the Constitution. They come because they want something, and what they want is usually not authorized by the Constitution.I do not claim that businessmen as a class are underhanded or wicked, since I do not believe in making prejudicial generalizations about any group. I am saying they are just as likely as anyone else to favor government intervention on their behalf....
I cannot finish a discussion of looting without mentioning the income tax. In another chapter I explained my opposition to the military draft, an institution based on the idea that the government owns its citizens and may direct their destinies against their will. The income tax implies the same thing: government owns you, and graciously allows you to keep whatever percentage of the fruits of your labor it chooses. Such an idea is incompatible with a free society....
In America, the average citizen in effect does unremunerated work for various levels of government for the equivalent of six months out of the year. People who favor this system should be honest about what they are saying: we have the right to force you to work against your will. Strip away the civics-class platitudes about "contributions" to "society," which are mere obfuscations designed to engineer the people's consent to the system, and that is what the income tax amounts to....
Dr. Paul then mentions the various efforts he's made at repealing various taxes, and then at what the larger goal should be:
What we should work toward, however, is abolishing the income tax and replacing it not with a national sales tax, but with nothing.... I have heard the breathless claims about how radical that is -- and compared to the trivial changes we are accustomed to seeing in government, I suppose it is. But in absolute terms, is it really so radical?
.... With a federal budget 40 percent lower than the federal budget of 2007.... would it really be so hard to imagine living in 1997 again? In return, we would have an economy so robust and dynamic that it would doubtless shatter even my own optimistic expectations. And we would once and for all have repudiated the totalitarian assumptions at the heart of the income tax.
How, by the way, did we ever let ourselves be talked in to such a thing? The income tax was first proposed for several reasons. The tariff, from which the federal government received most of its funding, was for a variety of reasons bringing in decreased revenue. At the same time, federal expenditures were going up, thanks in part to an increase in the military budget.
You know, they never spent any time on this in the history classes, readers.
An alternative had to be found. At the time, many Americans viewed the tariff as an unfair tax that burdened them as consumers and benefited big business by sheltering it from foreign competition. A tax on incomes, the argument went, would at last force the rich to pay their share. And that's just how the income tax was pitched to people: tax relief for you, in the form of lower tariffs, and a tax increase for the rich. Do not worry, people were told. Only the richest of the rich will ever pay the income tax.
That phony promise didn't last long. Within a few years, tax rates had shot through the roof, and classes of people who had thought they would never be taxed found themselves paying as well. And by the 1920s the tariff was raised again anyway, so the people wound up getting the worst of both worlds....
The history classes didn't portray it that way, not at all!! Sigh! Sob!
The kind of spending cuts we obviously need will not be easy, since our government has encouraged so many Americans to become dependent on federal programs. These programs cannot survive much longer without a financial collapse....
There he goes, challenging received thought again!
My first thought was National Health Care -- except that he's right about the dependency -- and how much I believe in that. Then it occurs to me that the hospitals are breeding grounds for germs, and that's where people are getting infected.
Maybe he has a point -- as I look at my shattered beliefs at my feet!
The fact is, we do not have the resources to sustain these programs in the long run....
Now Dr. Paul explodes the myth that he would let people suffer:
In the short run, in order to provide for those we have taught to be dependent on government, [Social Security and Medicare] could survive. My own suggestion is to fund this transition period by scaling back our unsustainable overseas commitments, saving hundreds of billions from the nearly one trillion dollars our empire is costing us every year, and in the process streamlining our overstretched military.... That is the only place where we can easily save money, applying some of the savings to these domestic programs and the rest to debt reduction.
I'm all for that!
Our out-of-control welfare state also helps account for the scope of our illegal immigration problem. When you subsidize something, you get more of it, and by offering free medical care and other services, as well as the prospect of amnesty, we get more illegal immigration....
I can already here the socio-ethnic groups hollering racism, but just wait...
Once again, the state divides rather than unifies. There would be far less hostility toward immigrants if the perception did not exist that they were getting something for nothing, while the rest of America struggles to make ends meet..... When, thanks to government policy, the economy is shaky, as it is now with the housing bubble bursting and inflation on the rise, it is all the easier to hold up immigrants as the scapegoats for people's economic woes....
Now he will address the myths inherent in the health care debate:
In the days before NMedicare and Medicaid, for instance, the poor and elderly were admitted to the hospitals at about the same rate they are now, and received good care. As a physician I never accepted Medicare or Medicaid money from the government, and instead offered cut-rate or free services to those who could not afford care. Before those programs came into existence, every physician understood that he or she had a responsibility to the less fortunate, and free medical care for the poor was the norm. Hardly anyone is aware of this today, since it doesn't fit into the typical, by-the-script story of government rescuing us from a predatory private sector.
Now THAT is the history I learned in school!!! The government saved us!!!
Laws and regulations that inflated the cost of medical services and imposed unreasonable liability standards on medical professionals even when they were acting in a voluntary capacity later made offering free care cost prohibitive, but free care for the poor was common at a time when America wasn't so "governmentish."
Dr. Paul then goes on to describe the way the U.S. health system functions now, and how the skyrocketing costs of care run parallel to the rise of the HMO's and third-party payers. He concludes that section with a devastating critique of National Health Care:
And speaking of poor treatment, those who favor national health care schemes should take a good, hard look at our veterans' hospitals. There is your national health care. These institutions are a national disgrace. If this is the care the government dispenses to those it honors as its most heroic and admirable citizens, why should anyone else expect to be treated any better?
That's a great point, and I am really torn now. I really liked "Sicko," and felt that if Canada, France and England can have good systems that they like, why can't America?
I told you Dr. Paul challenges conventional thought!
Americans have been given the impression that "regulation" is always a good thing, and that anyone who speaks of lessening the regulatory burden is an antisocial ogre who would sacrifice safety and human well-being....But that is how it is portrayed in too many of our American history classrooms. It is not unusual for American students to find their textbooks telling them that injustice was everywhere before the federal government, motivated by nothing but a deep commitment to the public good, intervened to save them from the wickedness of the free market....
BINGO!
Every single aspect of this story is false, though of course this version of our history continues to be peddled and believed. I don't blame people for believing it -- it's the only rendition of events they're ever told, unless by some fluke they have learned where to look for the truth. But there is an agenda behind this silly comic-book version of history: to make people terrified of the "unfettered" free market, and to condition them to accept the ever-growing burdens that the political class imposes on the private sector as an unchangeable aspect of life that exists for their own good.
An argument we hear even now is that a hundred years ago... people were much poorer and worked in less desirable conditions, while today... with much more regulation in place, people are much more prosperous.... If people are more prosperous today, that must be because government saved them from the ravages of the free market.
But that is nonsense....
Dr. Paul then touches on the area of free-trade and his position on the alphabet organization who are destroying U.S. sovereignty:
To establish genuine free trade, no such transfer of power is necessary. True free trade does not require treaties or agreements between governments. On the contrary, true free trade occurs in the absence of government intervention.... Organizations like the WTO and NAFTA represent government-managed trade schemes, not free trade....
Dr. Paul then tackles the foreign aid issue and its failures (much as domestic welfare has failed)...
Mine is an "isolationist" position only to those who believe that the world's peoples can interact with each other only through their governments, or only through the intermediary of a supranational bureaucracy.
He's talking about the Globalists, of course!
That unspoken assumption is dangerous and dehumanizing. There is nothing isolationist about opposing coercive government-to-government wealth transfers....
.... and tells a brief biography and history of the economist Ludwig von Mises (whom I had never heard of before reading this book; he was not on the college reading list, folks).
Dr. Paul then addresses environmental concerns:
Some people falsely believe that advocates of the free market must be opponents of the environment.... But a true supporter of private property and personal responsibility cannot be indifferent to environmental damage, and should be viewed as a from of unjustified aggression that must be punished or enjoined, or dealt with in some other way that is mutually satisfactory to all parties. Private business should not have the right to socialize its costs by burdening other people with the by-products of its operations....
Dumping garbage on your neighbors lawn is wrong. Pollution is really just another form of garbage. For that reason, proposals to charge pollution fees, which get higher the greater the pollution, neglect the demands of justice. Anderson compares it to taxing thieves as a way of giving them an economic incentive not to burglarize your home. If the practice is wrong, the law should treat it as such....
In fact, that's how American law used to treat pollution. But a series of nineteenth-century nuisance cases changed that: the courts suddenly decided that a certain level of pollution could be allowed for the sake of the greater good. The implication was that if, for example, a few farmers had their property destroyed by passing trains, that was the price of progress (Easy for them to say!).... Imagine if the previous legal approach to pollution had been overturned, and the polluters continued to be held legally liable for such invasive practices.... we would long ago have "begun enjoying a non-pollution-intensive technology where there were no open-ended smokestacks. Instead, these pipes would have led back to chemical cisterns, the latter to capture the otherwise errant soot particles."
And campaign finance reform:
.... The debate missed the point. As long as we have a government that can exploit peaceful, hardworking Americans on behalf of special interests, as long as it can make or break any American business with (for example) tax policy, politically-motivated antitrust prosecutions, and ill-considered regulation, and in general as long as economic winners and losers can be determined in Washington, people will want to assure their share of the loot by influencing the political process through money. Campaign finance reform focuses on the symptom rather than the cause....
Dr Paul finishes the chapter (and I finish this post) by noting the how skeptical he was about running for the presidency, and how surprised and overjoyed he is at the level of support he's received!
KEEP SOLDIERING ON, Doctor!!!! We are with you!!!
Previous posts:
Ron Paul Revolution Excerpts, Part Two
Ron Paul Revolution Excerpts, Continued
Ron Paul Revolution Excerpts, Continued (different post)
