INTERMEX POWER

The Mapmakers Petition

2012-02-03T13:40:00.002-07:00

The Mapmakers Petition

This could have also been labelled as from the files of “anti-trust is not about consumers.” Apparently, a mapmaker in France has successfully sued and won damages from Google for unfair competition, ie from providing Google Maps for free.
Just as in the Microsoft anti-trust case and just about every anti-trust case in history, companies who brought the suit are really trying to stop an up-start competitor from trashing their business model, but they have to couch this true concern in mumbled words about the consumer. Specifically, they raise that ever-popular boogeyman of jacking up prices once the monopoly is secured. The next time this happens, of course, will be the first time. Its a myth. For example, in Google’s case, left unsaid is how they would jack up their prices when at least two other companies (Bing, Mapquest) also provide mapping services online for free.

Tags: france, Google Maps, monopoly, prices
Category: Liability / Lawsuits / Insurance, Regulation | 2 Comments

The Media and Cancer Risks

January 31, 2012, 8:44 am

The old saying goes, “where there is smoke, there’s fire.” I think we all are at least subconciously suceptible to thinking this way vis a vis the cancer risks in the media. We hear so much about these risks that, even if the claims seem absurd, we worry if there isn’t something there. After all, if the media is concerned, surely the balance of evidence must be at least close – there is probably a small risk or increase in mortality.
Not so. Take cell phones. We have heard for decades concern about cancer risk from cell phones. But they are not even close to dangerous, missing danger levels by something like 5 and a half orders of magnitude.

Cell phones do not cause cancer. They do not even theoretically cause cancer. Why? Because they simply do not produce the type of electromagnetic radiation that is capable of causing cancer. Michael Shermer explains, using basic physics:
…known carcinogens such as x-rays, gamma rays and UV rays have energies greater than 480 kilojoules per mole (kJ/mole), which is enough to break chemical bonds… A cell phone generates radiation of less than 0.001 kJ/mole. That is 480,000 times weaker than UV rays…
If the radiation from cell phones cannot break chemical bonds, then it is not possible for cell phones to cause cancer, no matter what the World Health Organization thinks. And just to put the “possible carcinogen” terminology into perspective, the WHO also considers coffee to be a possible carcinogen. Additionally, it appears that politics and ideology may have trumped science in the WHO’s controversial decision.

Tags: media, Michael Shermer, physics, risk, risks, UV, WHO, World Health Organization
Category: Science | 16 Comments

The Ultimate End of Social-Democratic Labor Policy

When a country

Increases the minimum wage, and therefore the minimum skill / productivity needed for a job
Adds substantially to the costs of labor through required taxes, insurance premiums, pensions, etc
Makes employees virtually un-fireable, thus forcing companies to think twice about hiring young, unproven employees they may be saddled with, good or bad, for decades
Puts labor policy in the hands of people who already have jobs (ie unions)
Shift wealth via social security and medical programs from the young to the old

It gets this

The bitterly ironic part is that when these folks hit the streets in mass protests, it will likely be for more of the same that put them there in the first place.

Want to argue that such policies are hurting workers rather than helping? Good luck, at least in Italy

Pietro Ichino, a professor of labor law at the University of Milan and a senator in the Italian legislature, is known as the author of several “neoliberal” books and studies recommending that the Italian government relax its extraordinarily stringent regulation of employers’ hiring and firing decisions. As Bloomberg Business Week reports, that means that Prof. Ichino must fear for his life: “For the past 10 years, the academic and parliamentarian has lived under armed escort, traveling exclusively by armored car, and almost never without the company of two plainclothes policemen. The protection is provided by the Italian government, which has reason to believe that people want to murder Ichino for his views.”

Memo to US: Don’t get cocky, you are going down the same path

Update: Interesting and sort of related from Megan McArdle

An apparent paradox that frequently puzzles journalists is that Europeans work fewer hours than workers in the United States, while in some countries, hourly productivity appears to be the same, or even higher, than that of American workers.This is not actually a paradox at all. Much of the decline in European hours worked per-capita came in the form of unemployment. Rigid labor laws which make it hard to fire (and thus, risky to hire) shut less productive workers out of the market, particularly the young, and those who had been displaced due to disruptive industry change. So does anything that raises the cost of labor, like, er, loads of mandatory vacation and leave. When you exclude your least productive workers from the labor force, your measured hourly productivity will be higher, particularly if you use metrics like GDP per hours worked.

2012-02-03T13:29:00.002-07:00

By Jeff Harding

This is a video featuring Cato’s Dan Mitchell on the Libertarian State of the Union. I think you will find it informative and entertaining.

TrimTabs Explains Why Today's "Very, Very Suspicious" NFP Number Is Really Down 2.9 Million In Past 2 Months

2012-02-03T13:27:00.004-07:00

Submitted by Tyler Durden

We have examined the nuance of the euphoric jobs data this morning from every angle and by now there should be plenty of 'information' for investors to make their own minds up on its credibility. However, the avuncular CEO of TrimTabs, who despite channeling Lewis Black lately, likely knows this data a little better than the average Jim on the street having collected tax witholdings data for the past 14 years, is modestly apoplectic at the adjustments. In one of his more colorful episodes, and rightfully so, Charles Biderman notes that "Either there is something massively changed in the income tax collection world, or there is something very, very suspicious about today’s BLS hugely positive number," adding, "Actual jobs, not seasonally adjusted, are down 2.9 million over the past two months. It is only after seasonal adjustments – made at the sole discretion of the Bureau of Labor Statistics economists – that 2.9 million fewer jobs gets translated into 446,000 new seasonally adjusted jobs." A 3.3 million "adjustment" solely at the discretion of the BLS? And this from the agency that just admitted it was underestimating the so very critical labor participation rate over the past year? Finally, Biderman wonders whether the BLS is being pressured during an election year to paint an overly optimistic picture by President Obama’s administration in light of these 'real unadjusted job change' facts. Frankly, in light of recent discoveries about the other "impartial" organization, the CBO, we don't think there is any need to wonder at all.

Record 1.2 Million People Fall Out Of Labor Force In One Month

2012-02-03T13:24:00.004-07:00

By: Curt

A month ago, we joked when we said that for Obama to get the unemployment rate to negative by election time, all he has to do is to crush the labor force participation rate to about 55%. Looks like the good folks at the BLS heard us: it appears that the people not in the labor force exploded by an unprecedented record 1.2 million. No, that’s not a typo: 1.2 million people dropped out of the labor force in one month! So as the labor force increased from 153.9 million to 154.4 million, the non institutional population increased by 242.3 million meaning, those not in the labor force surged from 86.7 million to 87.9 million. Which means that the civilian labor force tumbled to a fresh 30 year low of 63.7% as the BLS is seriously planning on eliminating nearly half of the available labor pool from the unemployment calculation. As for the quality of jobs, as withholding taxes roll over Year over year, it can only mean that the US is replacing high paying FIRE jobs with low paying construction and manufacturing. So much for the improvement.

Chart below shows it all - that jump is not a fat finger!

And Labor Force Participation:

This is the largest absolute jump in 'Persons Not In Labor Force' on record...and biggest percentage jump in 30 years.

Chart: Bloomberg

More Proposed Stimulus Spending On Infrastructure

2012-02-03T13:20:00.000-07:00

When Barack Hussein Obama took office in January, 2009, he identified 10 corridors appropriate for high-speed rail in the US. His stimulus bill earmarked $8 billion to jump-start the project. High speed rail is Obama’s “Holy Grail” of public infrastructure projects. Proponents originally said the LA-to-SF bullet train project would create more than 1 million jobs, but recently revised that downward to several thousand jobs. (That’s quite a revision!) Almost every state originally identified dropped out of the running because they couldn’t afford their share of the cost. Only California is still seeking money for its “high speed rail” project that is to go between Los Angeles and San Francisco. Since the project was first unveiled in 2008, officials have tripled its projected cost, delayed its start of service for 13 years, downsized ridership projections and increased ticket prices. Almost two-thirds of Californians now say they’d vote against issuing bonds to pay for a project they narrowly approved just three years ago.

Original cost estimates (2008) were $33 billion for the entire project, with California, the federal government (that’s us taxpayers), and private enterprise sharing costs equally. Recent cost estimates (2011) are $98.5 billion. Recently revised ridership figures show that a one-way ticket price could require a government subsidy of $100 per passenger per ticket. Estimated travel time between the cities is 2 hours, 40 minutes. Flying takes about 1 hour, 5 minutes. The original cost of $55 for a one-way ticket was revised in 2009 to be 83% of the cost of a similar airline flight, or about $105. So the question is, “Why would anyone pay 83% of a flight cost to make the trip in over twice the time?”
When the California legislature undertook the most expensive public-works project in American history, they also created an independent review board to ensure that the LA-to-SF high-speed rail project would have solid financial footing. The name of the review board is “The California High-Speed Rail Peer Review Group.” But in a report Tuesday, January 3, 2012, the review board, a panel of experts created by state law to help safeguard the public’s interest, raised serious doubts about almost every aspect of the project, concluding that the current plan “is not financially feasible.” As a result, the panel said, it “cannot at this time recommend that the Legislature approve the appropriation of bond proceeds for this project.” Tom Umberg, chairman of the authority board, said in a letter to California lawmakers that the report is “deeply flawed, in some areas misleading and its conclusions are unfounded.” “As the report presents a narrow, inaccurate and superficial assessment of the HSR program, it does a disservice to policy-makers who must confront these decisions.”
California Governor Jerry Brown last week reiterated his commitment to the project, and the Rail Authority today blasted the Peer Review Group’s report. Brown spokesman Gil Duran said in an e-mail that the Peer Review Group’s report “does not appear to add any arguments that are new or compelling enough to suggest a change in course.” So if Governor Brown thinks that a project whose costs have tripled from original estimates, the estimates on which voters relied when approving the project in 2008, presents no fiscal problems, then why should he worry when the state-mandated review board tells him that the project can’t work?

Iran’s Political Power Struggle

2012-02-03T13:18:00.001-07:00

By: Warren Beatty

Iran has been much in the news lately, with its atomic bomb, er, energy program, its nuclear scientist short lifespan, its “Close the Strait of Hormuz” exercise, its telling the US that an aircraft carrier had better not come back into the Persian Gulf, and its test firing of a home built missile. So I thought a look at its internal politics may prove interesting.

The power struggle in Iran between the supreme leader, Ayatollah Ali Khamenei, and President Mahmoud Ahmadinejad, could lead to Ahmadinejad’s resignation. It was predictable that when Intelligence Minister Heydar Moslehi resigned (or was dismissed) from Ahmadinejad’s cabinet in April, 2011, it would be costly for Ahmadinejad. The extent of the damage for Ahmadinejad’s defiance of Supreme Leader Ayatollah Ali Khamenei is now becoming clear. According to the Tehran Etedaal newspaper, several people close to Ahmadinejad and his chief of staff, Esfandiar Rahim Mashaei, have been arrested by security services. Moslehi defied Ahmadinejad by being more loyal to Supreme Leader Ayatollah Ali Khamenei. Got that? It has always been difficult to be a player in Iranian politics/religion.
The attack on the British embassy in Tehran in November, 2011, by Iranian “youths” is another example of this situation. Ali Larijani, speaker of the Iranian parliament, condemned Great Britain and said that the action of Iranian “youth” was reflecting the view of all Iranians. This line had to have been transmitted through Khamenei’s office that already supported the embassy attack as “the people’s reaction” to Britain’s hostile economic action (sanctions).
Ahmadinejad attempted to undermine Larijani, a political competitor and possible presidential candidate in 2013. Ahmadinejad took a big political chance and went against the already established line by opposing the diplomatic sanctions already called for against Great Britain. A more cynical interpretation of the Iranian president’s tactic would suggest he recognizes that Ayatollah Khamenei does not support him or his political future, and in consequence Ahmadinejad decided to seek political support from the more moderate elements in Iranian politics. His turning to those who represent a less confrontational wing of Iran’s political life may be his only hope of continuing to remain a major player.
From a practical point of view the internal security service of VEVAK, the al Quds force within the Islamic Revolutionary Guard Corps, and the Council of Guardians are the operative instruments of Ayatollah Khamenei that hold the physical and ideological reins of power. If an individual or group seeks to wrest power from the existing structure militarily, judicially, or politically, they seemingly have an insurmountable obstacle to overcome. If a politician (in this case Ahmadinejad) takes a line contrary to that which is generally approved by the supreme leader’s office, but can point to a form of consent from one of the power centers (in this case, the Council of Guardians), he has covered himself.
The ultimate question then becomes whether or not Ayatollah Ali Khamenei can remain as the supreme leader, and the answer is in the hands of the religious hierarchy, not the electoral process. And the answer to this question has some very real implications for President Mahmoud Ahmadinejad.
Just what the rest of the world needs – a political power struggle in Iran while it develops nuclear weapons and buys delivery systems from North Korea.

War, Racism and the Empire of Poverty. When Empire Hits Home, Part 1

2012-02-03T13:14:00.000-07:00

by Andrew Gavin Marshall

At a time of such great international turmoil economically and politically, it is increasingly important to identify and understand the social dynamics of crisis. A global social crisis has long preceded the economic crisis, and has only been exacerbated by it. The great shame of human civilization is the fact that over half of it lives in abysmal poverty.

Poverty is not simply a matter of ‘bad luck’; it is a result of socio-political-economic factors that allow for very few people in the world to control so much wealth and so many resources, while so many are left with so little. The capitalist world system was built upon war, race, and empire. Malcolm X once declared, “You can’t have capitalism without racism.”

The global political economy is a system that enriches the very few at the expense of the vast majority. This exploitation is organized through imperialism, war, and the social construction of race. It is vitally important to address the relationship between war, poverty and race in the context of the current global economic crisis. Western nations have plundered the rest of the world for centuries, and now the great empire is hitting home. What is done abroad comes home to roost.

The Social Construction of ‘Race’

500 years ago, the world was going through massive transformations, as the Spanish, Portuguese, French, and British colonized the ‘New World’ and in time, a new system of ‘Capitalism’ and ‘nation states’ began to emerge. The world was in a great period of transition and systemic change in which it was the Europeans that emerged as the dominant world powers. The colonies in the Americas required a massive labour force, “Between 1607 and 1783, more than 350,000 ‘white’ bond-labourers arrived in the British colonies.”[1]

The Americas had both un-free blacks and whites, with blacks being a minority, yet they “exercised basic rights in law.”[2] Problems arrived in the form of elites trying to control the labour class. Slaves were made up of Indian, black and white labourers; yet, problems arose with this “mixed” population of un-free labour. The problem with Indian labourers was that they knew the land and could escape to “undiscovered” territory, and enslavement would often instigate rebellions and war:

The social costs of trying to discipline un-free native labour had proved too high. Natives would eventually be genocidally eliminated, once population settlement and military power made victory more or less certain; for the time being, however, different sources of bond labour had to be found.[3]

Between 1607 and 1682, more than 90,000 European immigrants, “three-quarters of them chattel bond-labourers, were brought to Virginia and Maryland.” Following the “establishment of the Royal African Company in 1672, a steady supply of African slaves was secured.” Problems became paramount, however, as the lower classes tended to be very rebellious, which consisted of “an amalgam of indentured servants and slaves, of poor whites and blacks, of landless freemen and debtors.” The lower classes were united in opposition to the elites oppressing them, regardless of background.[4]

Bacon’s Rebellion of 1676 was of particular note, as bond-labourers, black and white, rebelled against the local elites and “demanded freedom from chattel servitude.” For the colonialists, “Such images of a joint uprising of black and white, slave and bondsman, proved traumatic. In the face of a united rebellion of the lower orders, the planter bourgeoisie understood that their entire system of colonial exploitation and privilege was at risk.”[5]

In response to this threat, the landed elite “relaxed the servitude of white labourers, intensified the bonds of black slavery, and introduced a new regime of racial oppression. In doing so, they effectively created the white race – and with it white supremacy.”[6] Thus, “the conditions of white and black servants began to diverge considerably after 1660.” Following this, legislation would separate white and black slavery, prevent “mixed” marriages, and seek to prevent the procreation of “mixed-race” children. Whereas before 1660, many black slaves were not indentured for life, this changed as colonial law increasingly “imposed lifetime bondage for black servants – and, especially significant, the curse of lifetime servitude for their offspring.”[7]

A central feature of the social construction of this racial divide was “the denial of the right to vote,” as most Anglo-American colonies previously allowed free blacks to vote, but this slowly changed throughout the colonies. The ruling class of America was essentially “inventing race.” Thus, “Freedom was increasingly identified with race, not class.”[8]

It is out of this that ideas of race and later, ‘race science’ emerged, as eugenics became the dominant ideology of western elites, trying to scientifically ‘prove’ the superiority of ‘whites’ and the ‘inferiority’ of ‘blacks’. This would carry a dual nature of justifying white domination, as well as providing both a justification for and excuse to oppress black people, and in fact, people of all ‘races’. This was especially clear as in the late 1800s and early 1900s the European empires undertook the ‘Scramble for Africa’ in which they colonized the entire continent (save Ethiopia). It was largely justified as a ‘civilizing’ mission; yet, it was fundamentally about gaining access to Africa’s vast resources.

Following World War II, global power rested predominantly in America, the leading hegemon, expanding the economic interests of North America and Western Europe around the world. War, empire, and racism have been central features of this expansion. In large part, poverty has been the result. Now, the empire hits home.

Global Labour

The world has almost 6.8 billion people, half of them female. The world economy has a labour force of 3.184 billion people; of all people employed in the world, 40% are women. While the world is equally male and female, 1.8 billion men are employed, compared to 1.2 billion women. The population of people in low paying jobs, long hours, and part-time work are predominantly women.[9]

Global Poverty and Wealth

In 1999, the United Nations Development Program (UNDP) reported that, “Although 200 million people saw their incomes fall between 1965 and 1980, more than 1 billion people experienced a drop from 1980 to 1993.” In 1996, “100 countries were worse off than 15 years [prior].” In the late 1960s, “the people in well-to-do countries were 30 times better off than those in countries where the poorest 20 percent of the world's people live. By 1998, this gap had widened to 82 times (up from 61 times since 1996).” As of 1998, “3 billion people live on less than $2 per day while 1.3 billion get by on less than $1 per day. Seventy percent of those living on less than $1 per day are women.”[10]

Elites and academics, as well as major social movements in western nations focus on population growth as being the driver in global poverty, picking up from where the Malthusians left off; poverty becomes the problem caused by “population growth” as opposed to a problem caused by wealth and resource distribution. In 2003, a World Bank report revealed that, “A minority of the world's population (17%) consume most of the world's resources (80%), leaving almost 5 billion people to live on the remaining 20%. As a result, billions of people are living without the very basic necessities of life - food, water, housing and sanitation.” Further:

1.2 billion (20%) of the world population now lives on less that $1/day, another 1.8 billion (30%) lives on less than $2/day, 800 million go to bed hungry every day, and 30,000 - 60,000 die each day from hunger alone. The story is the same, when it comes to other necessities like water, housing, education etc. On the flip side, we have increasing accumulation of wealth and power, where the world's 500 or so billionaires have assets of 1.9 trillion dollars, a sum greater than the income of the poorest 170 countries in the world.[11]

Other figures from the World Bank report include the fact that, “The world's 358 billionaires have assets exceeding the combined annual incomes of countries with 45 percent of the world's people,” and “The Gross Domestic Product (GDP) of the poorest 48 nations (i.e. a quarter of the world's countries) is less than the wealth of the world's three richest people combined.” Incredibly, “A few hundred millionaires now own as much wealth as the world's poorest 2.5 billion people.”[12]

In regards to poverty and hunger statistics, “Over 840 million people in the world are malnourished—799 million of them are from the developing world. Sadly, more than 153 million of them are under the age of 5 (half the entire US population).” Further, “Every day, 34,000 children under five die of hunger or other hunger-related diseases. This results in 6 million deaths a year.” That amounts to a “Hunger Holocaust” that takes place every single year. As of 2003, “Of 6.2 billion living today, 1.2 billion live on less than $1 per day. Nearly 3 billion people live on less than $2 a day.”[13]

In 2005, according to World Bank statistics, “More than one-half of the world's people live below the internationally defined poverty line of less than U.S. $2 a day,” and “Nearly one-third of rural residents worldwide lack access to safe drinking water.”[14]

In 2006, a groundbreaking and comprehensive report released by the World Institute for Development Economics Research of the United Nations University (UNU-WIDER) reported that, “The richest 2% of adults in the world own more than half of global household wealth.” An incredible startling statistic was that:

[T]he richest 1% of adults alone owned 40% of global assets in the year 2000, and that the richest 10% of adults accounted for 85% of the world total. In contrast, the bottom half of the world adult population owned barely 1% of global wealth.[15]

This is worth repeating: the top 1% owns 40% of global assets; the top 10% owns 85% of world assets; and the bottom 50% owns 1% of global assets.

The 2009 UN Millennium Development Goals report stated that in the wake of the global economic crisis and the global food crisis that preceded and continued through the economic crisis, progress towards the goals of poverty reduction are “threatened by sluggish – or even negative – economic growth, diminished resources, fewer trade opportunities for the developing countries, and possible reductions in aid flows from donor nations.”[16]

The Millennium Development Goals (MDGs) report stated that in 2009, “an estimated 55 million to 90 million more people will be living in extreme poverty than anticipated before the crisis.” Further, “the encouraging trend in the eradication of hunger since the early 1990s was reversed in 2008, largely due to higher food prices.” Hunger in developing regions has risen to 17% in 2008, and “children bear the brunt of the burden.”[17]

In April of 2009, a major global charity, Oxfam, reported that a couple trillion dollars given to bail out banks could have been enough “to end global extreme poverty for 50 years.”[18] In September of 2009, Oxfam reported that the economic crisis “is forcing 100 people-a-minute into poverty.” Oxfam stated that, “Developing countries across the globe are struggling to respond to the global recession that continues to slash incomes, destroy jobs and has helped push the total number of hungry people in the world above 1 billion.”[19]

The financial crisis has hit the ‘developing’ world much harder than the western developed nations of the world. The UN reported in March of 2009 that, “Reduced growth in 2009 will cost the 390 million people in sub-Saharan Africa living in extreme poverty around $18 billion, or $46 per person,” and “This projected loss represents 20 per cent of the per capita income of Africa’s poor – a figure that dwarfs the losses sustained in the developed world.”[20]

While the world’s richest regions lie in North America, Europe, and Pacific Asia respectively, the vast majority of the rest of the world lives in gross poverty. This disparity is ‘colour-coded’, too; as the top, the worlds wealthy, are white, while the world’s impoverished, the vast majority of the world’s people, are people of colour. This disparity is further polarized when gender is included, as the majority of the wealthy are men, while the majority of the impoverished are women. This disparity of a global scale is carried over to a national scale in the United States.

Race and Poverty in America

In the last months of Martin Luther King’s life, he focused his attention to the struggle against poverty. Today, “Sadly, as far as the country has come regarding civil rights, more Americans live in poverty today than during King's lifetime. Forty million people, 13% of the population, currently fall below the poverty line.” In 1967, King wrote:

In the treatment of poverty nationally, one fact stands out. There are twice as many white poor as [black] poor in the United States. Therefore I will not dwell on the experiences of poverty that derive from racial discrimination, but will discuss the poverty that affects white and [black] alike.[21]

Today, “more whites than blacks do still live in poverty, but a higher proportion of minorities fall below the poverty line, including 25% of blacks and 23% of Latinos (compared to 9% of whites). Stable jobs, good housing, comprehensive education and adequate health care are still unequal, unsuitable and, in many cases, unavailable.” King wrote, “The curse of poverty has no justification in our age. The time has come for us to civilize ourselves by the total, direct, and immediate abolition of poverty.”[22]

In 1995, “Federal Reserve research found that the wealth of the top one percent of Americans is greater than that of the bottom 95 percent.” Further, “Wealth projections through 1997 suggest that 86 percent of stock market gains between 1989 and 1997 went to the top ten percent of households while 42 percent went to the most well-to-do one percent.”[23]

Wealth disparity is not colour-blind. As of 1998, “The modest net worth of white families [was] 8 times that of African-Americans and 12 times that of Hispanics. The median financial wealth of African-Americans (net worth less home equity) [was] $200 (one percent of the $18,000 for whites) while that of Hispanics [was] zero.” Further, “Household debt as a percentage of personal income rose from 58 percent in 1973 to an estimated 85 percent in 1997.”[24]

In 2000, a major university study revealed that the poor were more likely to be audited by the IRS than the rich.[25] In December of 2009, the Seattle Times ran an article in which they tell the story of Rachel Porcaro, a 32-year-old mother of two boys. She was summoned to the IRS back in 2008 where she was told she was being audited. When she asked why, she was told that, “You made eighteen thousand, and our data show a family of three needs at least thirty-six thousand to get by in Seattle.” Thus, “They thought she must have unreported income. That she was hiding something. Basically they were auditing her for not making enough money.”[26]

The reporter for the Seattle Times wrote that, “An estimated 60,000 people in Seattle live below the poverty line — meaning they make $11,000 or less for an individual or $22,000 for a family of four. Does the IRS red-flag them for scrutiny, simply because they're poor?” He contacted the local IRS office with that question; they “said they couldn't comment for privacy reasons.” What followed the initial audit was even worse:

She had a yearlong odyssey into the maw of the IRS. After being told she couldn't survive in Seattle on so little, she was notified her returns for both 2006 and 2007 had been found "deficient." She owed the government more than $16,000 — almost an entire year's pay.

[. . . ] Rachel's returns weren't all that complicated. At issue, though, was that she and her two sons, ages 10 and 8, were all living at her parents' house in Rainier Beach (she pays $400 a month rent). So the IRS concluded she wasn't providing for her children and therefore couldn't claim them as dependents.[27]

A family friend who was an accountant determined that the IRS was wrong in its interpretation of the tax law; “He sent in the necessary code citations and hoped that would be the end of it.” But the story wasn’t over; “Instead, the IRS responded by launching an audit of Rachel's parents.” Rachel said, “We're surviving as a tribe. It seems like we got punished for that.”[28]

Taxation is a major issue related to poverty. A major report issued in November of 2009 revealed that the state of “Alabama makes families living in poverty pay higher income taxes than any other state.” Thus, “At the lowest incomes, we have some of the highest taxes in the nation because our system is upside down.”[29]

In November of 2009, stunning statistics were revealed as a true test of poverty in America:

With food stamp use at record highs and climbing every month, a program once scorned as a failed welfare scheme now helps feed one in eight Americans and one in four children.

It has grown so rapidly in places so diverse that it is becoming nearly as ordinary as the groceries it buys. More than 36 million people use inconspicuous plastic cards for staples like milk, bread and cheese, swiping them at counters in blighted cities and in suburbs pocked with foreclosure signs.

Virtually all have incomes near or below the federal poverty line, but their eclectic ranks testify to the range of people struggling with basic needs. They include single mothers and married couples, the newly jobless and the chronically poor, longtime recipients of welfare checks and workers whose reduced hours or slender wages leave pantries bare.[30]

The food stamps program is growing at the pace of 20,000 people per day, as “There are 239 counties in the United States where at least a quarter of the population receives food stamps,” and “In more than 750 counties, the program helps feed one in three blacks. In more than 800 counties, it helps feed one in three children.” Further, “food stamps reach about two-thirds of those eligible” nationwide.[31] Thus, there is potentially 18 million more Americans eligible to use food stamps, which would make the figure soar to 54 million.

In 2008, tent cities started popping up in and around cities all across the United States, as the homeless population rapidly expanded like never before.[32] The Guardian reported in March of 2009 that, “Tent cities reminiscent of the "Hoovervilles" of the Great Depression have been springing up in cities across the United States - from Reno in Nevada to Tampa in Florida - as foreclosures and redundancies force middle-class families from their homes.”[33]

An April 2009 article in the German newspaper Der Spiegel ran a report on the middle class in the US being thrown into poverty, in which the authors wrote, “The financial crisis in the US has triggered a social crisis of historic dimensions. Soup kitchens are suddenly in great demand and tent cities are popping up in the shadow of glistening office towers.” Further:

Poverty as a mass phenomenon is back. About 50 million Americans have no health insurance, and more people are added to their ranks every day. More than [36] million people receive food stamps, and 13 million are unemployed. The homeless population is growing in tandem with a rapid rise in the rate of foreclosures, which were 45 percent higher in March 2009 than they were in the same month of the previous year.

[. . . ] The crisis in the lower third of society has turned into an existential threat for some Americans. Many soup kitchens are turning away the hungry, and even hastily constructed new facilities to house the homeless are often inadequate to satisfy the rising demand.

Many private corporations across America are withdrawing their funding for social welfare projects. Ironically, their generosity is ending just as mass poverty is returning to America.[34]

Crime was also reported to be on the rise at a dramatic rate. One criminologist explained that in the face of more Americans struggling in harsh economic times, “The American dream to them is a nightmare, and the land of opportunity is but a cruel joke.” Statistics were confirming his predictions of a rise in crisis-related crime, as April 2009 was “one of the bloodier months in American criminal history.” A professor of criminology stated, “I've never seen such a large number (of killings) over such a short period of time involving so many victims.”[35]

In the midst of the euphoria over a perceived economic recovery, which has yet to “trickle down” to the people, tent cities have not vanished. In late February of 2010, it was reported that, “Just an hour outside of New York City, a thriving tent city gives a home to refugees from the economic downturn.” Many people in poverty “have become so desperate that they have had to move into the woods.” One woman in this forest tent city outside of New York had been living there for two years. She said, “I just went through a divorce. And it was a bad divorce. And I ended up here, homeless in here.”[36]

Rob, a 21-year-old who was laid off when the Great ‘Recession’ began, is the youngest homeless man living in the forest tent city. He said the worst part is the shame, “The embarrassment of walking out of here, the cars see you come by and they know who you are. The shame of walking into town and having people give you dirty looks just for the way you’re forced to live.”[37]

While many more millions are being plunged into poverty, the internal disparities of race, gender, and age still persist. In November of 2009, it was reported that the jobless rate for 16-to-24-year-old black men has reached Great Depression proportions, as 34.5% of young black men were unemployed in October of 2009, “more than three times the rate for the general U.S. population.” Further:

The jobless rate for young black men and women is 30.5 percent. For young blacks -- who experts say are more likely to grow up in impoverished racially isolated neighborhoods, attend subpar public schools and experience discrimination -- race statistically appears to be a bigger factor in their unemployment than age, income or even education. Lower-income white teens were more likely to find work than upper-income black teens, according to the Center for Labor Market Studies at Northeastern University, and even blacks who graduate from college suffer from joblessness at twice the rate of their white peers.[38]

Another startling statistic in the report was that, “Young black women have an unemployment rate of 26.5 percent, while the rate for all 16-to-24-year-old women is 15.4 percent.” The fact that these are the statistics for young people is especially concerning, as “the consequences can be long-lasting”:

This might be the first generation that does not keep up with its parents' standard of living. Jobless teens are more likely to be jobless twenty-somethings. Once forced onto the sidelines, they likely will not catch up financially for many years. That is the case even for young people of all ethnic groups who graduate from college.[39]

With poverty, food scarcity increases. While many Americans and people the world over have felt the effects of the recession on their daily meals, the race disparity persists in this facet as well, as “one in four African-American households struggles to put food on the table on a regular basis, compared with about one in seven households nationally.” Further, “90 percent of African American children will receive food stamp benefits by the time they turn 20.”[40]

In March of 2010, a truly staggering report was released by a major economic research group which concluded that, “Women of all races bring home less income and own fewer assets, on average, than men of the same race, but for single black women the disparities are so overwhelmingly great that even in their prime working years their median wealth amounts to only $5.” Let’s review that again:

[W]hile single white women in the prime of their working years (ages 36 to 49) have a median wealth of $42,600 (still only 61 percent of their single white male counterparts), the median wealth for single black women is only $5.[41]

The research organization analyzed data from the Federal Reserve’s 2007 Survey of Consumer Finances. Wealth, or net worth, in the report, is defined as:

[T]he total of one's assets -- cash in the bank, stocks, bonds and real estate; minus debts -- home mortgages, auto loans, credit cards and student loans. The most recent financial data was collected before the economic downturn, so the current numbers likely are worse now than at the time of the study.[42]

The study further revealed that, “For all working-age black women 18 to 64, the financial picture is bleak. Their median household wealth is only $100. Hispanic women in that age group have a median wealth of $120.” Black women are more likely to be hit with the responsibility of working and raising children on their own:

In a 2008 study of black women and their money, the ING Foundation found that black women -- who frequently manage the assets of their households -- financially support friends, family and their houses of worship to a much greater degree than the general population.

They also are more likely to be employed in jobs and industries -- such as service occupations -- with lower pay and less access to health insurance. And when their working days are done, they rely most heavily on Social Security because they are less likely to have personal savings, retirement accounts or company pensions. Their Social Security benefits are likely to be lower, too, because of their low earnings.[43]

The poor youth of America are also disproportionately subject to racial exacerbations of their social situations. In America, “more than half of all young adult dropouts are jobless. And dropouts are at greater risk of being incarcerated and having poorer physical and mental health than those who graduate.” Again, the racial disparity emerges, as “[p]oor and minority youths are far less likely to graduate from high school than white children.”

An October 2009 report released by the National Center for Education Statistics says 59.8 percent of blacks, 62.2 percent of Hispanics, and 61.2 percent of American Indians graduated from public high school in four years with a regular diploma in the 2006-2007 school year compared to 79.8 percent for whites and 91.2 percent for Asian and Pacific Islanders. Black and Hispanic dropout rates were more than twice those of white youths.[44]

Many youths then venture into crime to survive. It is here where another racial divide rears its head in a clear example of how Justice is not blind, but sees in technicolour. The incarceration rate, that is, the prison rate of Americans is colour-coded. Black men are incarcerated “at a rate that is over 6 times higher than that for white males.” While black Americans make up 13% of the US population, they make up 40% of the US prison population. Meanwhile, whites make up 66% of the US population, yet only 34% of the prison population. Hispanics make up 15% of the U.S. population, and account for 20% of the prison population.[45]

The poor youth are subject to further insults, as new federally funded drug research revealed a startling and bleak disparity: poor children who are dependent upon Medicaid, a government health program for low-income families, “are given powerful antipsychotic medicines at a rate four times higher than children whose parents have private insurance.” Further, these children, the poor children, “are more likely to receive the drugs for less severe conditions than their middle-class counterparts.” A research team from Rutgers and Columbia posed the question:

Do too many children from poor families receive powerful psychiatric drugs not because they actually need them — but because it is deemed the most efficient and cost-effective way to control problems that may be handled much differently for middle-class children?[46]

The effects are not simply psychological, as “Antipsychotic drugs can also have severe physical side effects, causing drastic weight gain and metabolic changes resulting in lifelong physical problems.” Ultimately, what the research concluded was that, “children with diagnoses of mental or emotional problems in low-income families are more likely to be given drugs than receive family counseling or psychotherapy.”[47]

A study published in the Canadian Journal of Psychiatry revealed that, “Children and youth on certain antipsychotic medications are more prone to getting diabetes and becoming fat,” and that, “the medication has significant and worrying side-effects.”[48] In America, the prescribing of anti-psychotic drugs to children rose five-fold between 1995 and 2002 to roughly 2.5 million.[49]

Thus, we have a situation in which the poor are treated in such a way as to dehumanize them altogether; to deprive them not simply of life’s necessities, but to then use them as guinea pigs and to punish them for their poverty. Hubert Humphrey once said, “A society is ultimately judged by how it treats its weakest and most vulnerable members.” How shall our societies be thus judged?

War and Poverty

It is to our own detriment that we fail to see the relationship between war and poverty both on a national and global level. War is the most violent and oppressive tool used by the powerful to control people and resources. The industry of war profits very few at the expense of the majority; it does not simply impoverish the nation that is attacked, but impoverishes the nation that is attacking.

In April of 1967, one year before Martin Luther King, Jr. was assassinated, he delivered a speech entitled, “Beyond Vietnam: A Time to Break Silence.” This speech is one of King’s lesser known, yet arguably, one of his most important. While reading the text of the speech does it no justice to the words spoken from King’s mouth in his magnanimous manner, they are worth reading all the same. Dr. King declared that, “A time comes when silence is betrayal. That time has come for us in relation to Vietnam.” His words are as significant today as the day they were spoken, and are worth quoting at some length:

Even when pressed by the demands of inner truth, men do not easily assume the task of opposing their government's policy, especially in time of war. Nor does the human spirit move without great difficulty against all the apathy of conformist thought within one's own bosom and in the surrounding world. [. . . ]

Over the past two years, as I have moved to break the betrayal of my own silences and to speak from the burnings of my own heart, as I have called for radical departures from the destruction of Vietnam, many persons have questioned me about the wisdom of my path. At the heart of their concerns this query has often loomed large and loud: Why are you speaking about war, Dr. King? Why are you joining the voices of dissent? Peace and civil rights don't mix, they say. Aren't you hurting the cause of your people, they ask? And when I hear them, though I often understand the source of their concern, I am nevertheless greatly saddened, for such questions mean that the inquirers have not really known me, my commitment or my calling. Indeed, their questions suggest that they do not know the world in which they live.

[. . . ] I knew that America would never invest the necessary funds or energies in rehabilitation of its poor so long as adventures like Vietnam continued to draw men and skills and money like some demonic destructive suction tube. So I was increasingly compelled to see the war as an enemy of the poor and to attack it as such.

Perhaps the more tragic recognition of reality took place when it became clear to me that the war was doing far more than devastating the hopes of the poor at home. It was sending their sons and their brothers and their husbands to fight and to die in extraordinarily high proportions relative to the rest of the population. We were taking the black young men who had been crippled by our society and sending them eight thousand miles away to guarantee liberties in Southeast Asia which they had not found in southwest Georgia and East Harlem. So we have been repeatedly faced with the cruel irony of watching Negro and white boys on TV screens as they kill and die together for a nation that has been unable to seat them together in the same schools. So we watch them in brutal solidarity burning the huts of a poor village, but we realize that they would never live on the same block in Detroit. I could not be silent in the face of such cruel manipulation of the poor.

My third reason moves to an even deeper level of awareness, for it grows out of my experience in the ghettoes of the North over the last three years -- especially the last three summers. As I have walked among the desperate, rejected and angry young men I have told them that Molotov cocktails and rifles would not solve their problems. I have tried to offer them my deepest compassion while maintaining my conviction that social change comes most meaningfully through nonviolent action. But they asked -- and rightly so -- what about Vietnam? They asked if our own nation wasn't using massive doses of violence to solve its problems, to bring about the changes it wanted. Their questions hit home, and I knew that I could never again raise my voice against the violence of the oppressed in the ghettos without having first spoken clearly to the greatest purveyor of violence in the world today -- my own government. For the sake of those boys, for the sake of this government, for the sake of hundreds of thousands trembling under our violence, I cannot be silent.

[. . . ] In 1957 a sensitive American official overseas said that it seemed to him that our nation was on the wrong side of a world revolution. During the past ten years we have seen emerge a pattern of suppression which now has justified the presence of U.S. military "advisors" in Venezuela. This need to maintain social stability for our investments accounts for the counter-revolutionary action of American forces in Guatemala. It tells why American helicopters are being used against guerrillas in Colombia and why American napalm and green beret forces have already been active against rebels in Peru. It is with such activity in mind that the words of the late John F. Kennedy come back to haunt us. Five years ago he said, "Those who make peaceful revolution impossible will make violent revolution inevitable."

Increasingly, by choice or by accident, this is the role our nation has taken -- the role of those who make peaceful revolution impossible by refusing to give up the privileges and the pleasures that come from the immense profits of overseas investment.

I am convinced that if we are to get on the right side of the world revolution, we as a nation must undergo a radical revolution of values. We must rapidly begin the shift from a "thing-oriented" society to a "person-oriented" society. When machines and computers, profit motives and property rights are considered more important than people, the giant triplets of racism, materialism, and militarism are incapable of being conquered.

[. . . ] A nation that continues year after year to spend more money on military defense than on programs of social uplift is approaching spiritual death.

[. . . ] The choice is ours, and though we might prefer it otherwise we must choose in this crucial moment of human history.[50]

After delivering such a monumental speech against war and empire, King was attacked by the national media; with Life Magazine calling the speech, “demagogic slander that sounded like a script for Radio Hanoi,” and the Washington Post saying that, “King has diminished his usefulness to his cause, his country, his people.”[51]

War is inextricably linked to the impoverishment of people around the world and at home. Inherent within the system of war, racial divides and exploitation are further exacerbated.

In the midst of the economic crisis, military recruitment went up, as the newly unemployed seek job security and an education. A Pentagon official said in October of 2008 that, “We do benefit when things look less positive in civil society,” as “185,000 men and women entered active-duty military service, the highest number since 2003, according to Pentagon statistics. Another 140,000 signed up for duty in the National Guard and reserve.”[52]

In November of 2008, the British Ministry of Defence (MoD) reported that recruitment into the military had increased by over 14% as a result of the economic crisis. Interestingly, “The north of England, where the credit crunch has hit hard, is among the areas where the MoD says recruitment is at its strongest.”[53]

In 2005, it was reported that the Pentagon had developed a database of teenagers 16-18 and all college students “to help the military identify potential recruits in a time of dwindling enlistment.” Further, according to the Washington Post, “The new database will include personal information including birth dates, Social Security numbers, e-mail addresses, grade-point averages, ethnicity and what subjects the students are studying.”[54]

The American Civil Liberties Union (ACLU) released a report in 2008, which revealed that there is a dangerous trend in recruiting youth in the United States. Recruitment of youth 16 and younger is prohibited in the United States, however:

[T]he U.S. armed services regularly target children under 17 for military recruitment. The U.S. military heavily recruits on high school campuses, targeting students for recruitment as early as possible and generally without limits on the age of students they contact. Despite a lawsuit challenging its identification of eleventh-grade high school students for recruitment, the Department of Defense’s central recruitment database continues to collect information on 16-year-olds for recruitment purposes.[55]

Various Army programs and recruitment services target students as young as 11, which includes a video game used as a tool for Army recruitment “explicitly marketed to children as young as 13.” Further, “The U.S. military’s recruitment policies, practices, and strategies explicitly target students under 17 for recruitment activities on high school campuses.”[56]

In 2007, prior to the economic crisis, it was reported that, “nearly three quarters of those killed in Iraq came from towns where the per capita income was below the national average.” Further, “More than half came from towns where the percentage of people living in poverty topped the national average.” The war casualties have disproportionately affected rural American towns, which make up the majority of military recruits. Interestingly, between “1997 to 2003, 1.5 million rural workers lost their jobs due to changes in industries like manufacturing that have traditionally employed rural workers.”[57] Now, they make up the majority of war casualties. War and poverty are inherently related in this example: the most impoverished suffer the most in war.

In 2007, it was further reported that more than 30,000 foreign troops are enlisted in the US Army, being recruited to join from foreign nations such as Mexico in return for being granted US citizenship.[58] In 2005, whites made up 80% of Army recruits, while blacks made up 15% of recruits. In 2008, whites made up 79%, while blacks made up 16.5% of Army recruits. However, an interesting statistic is that between 2007 and 2008, there was a 5% increase in the recruit of whites, while over the same period there was nearly a 96% increase in the recruitment of blacks. In 2008, 52% of recruits were under the age of 21. For the fifth year in a row, as of 2008, “youth from low- to middle-income neighborhoods are over-represented among new Army recruits.”[59]

In March of 2008, The Nation published an article entitled “The War and the Working Class,” in which it explained that the American military operated under an “economic draft,” as “Members of the armed forces come mainly and disproportionately from the working class and from small-town and rural America, where opportunities are hard to come by.”[60] This was even before the economic crisis had really started to be noticed in the United States.

In January of 2009 it was reported that, “The Army and each of the other branches of the military are meeting or exceeding their goals for signing up recruits, and attracting more qualified people.”[61] In March of 2009, it was reported that, “Fresh recruits keep pouring into the U.S. military, as concerns about serving in Iraq and Afghanistan are eclipsed by the terrible civilian job market.” All branches of the armed forces “met or exceeded their active duty recruiting goals for January, continuing a trend that began with a decline in the U.S. job market.”

The military acknowledged that weakness in the U.S. economy, which lost 2.6 million jobs in 2008 and another 598,000 in January, has made the armed services more appealing to potential recruits.[62]

It was reported in October of 2009 that due to the economic crisis, “Middle-class American youth are entering the military in significant numbers,” as the Department of Defense announced “that for the first time since the draft ended and the all-volunteer force began 36 years ago, every service branch and reserve component met or exceeded its recruiting goals, both in numbers and quality.” As the economic crisis “resulted in the largest and the swiftest increase in overall unemployment that we've ever experienced,” this created a boom for military recruiting.[63]

In December of 2009 it was reported that with a record number of college graduates unable to find work, recruitment soared to record levels, even in the midst of President Obama announcing the deployment of an additional 30,000 troops to Afghanistan. As one commentator put it:

The United States is broken – school systems are deteriorating, the economy is in shambles, homelessness and poverty rates are expanding – yet we’re nation-building in Afghanistan, sending economically distressed young people over there by the tens of thousands at an annual cost of a million dollars each.[64]

In January of 2010 it was reported by the military that many Marines nearing the end of their active duty are reconsidering re-enlisting due to the severe economic situation. According to the U.S. Department of Labor in November of 2009, there were 15.4 million unemployed people in the United States, with the unemployment rate hitting 10%. “Employment fell in construction, manufacturing and information industries, while jobs in temporary help services and health care increased.” Thus, the unemployment figures are somewhat deceiving, as it doesn’t take into account all the people that only rely upon part-time jobs, as “People working part-time jobs for economic reasons numbered 9.2 million. These individuals worked part-time because their hours at another job had been cut back or they were unable to find a full-time job.” Hence, “Marines reenlist for numerous economic reasons.”[65]

In 2007, Obama campaigned on a promise to increase defense spending, and that he wanted the American military to “stay on the offense, from Djibouti to Kandahar,” from Africa to Afghanistan. Obama proclaimed his belief that “the ability to put boots on the ground will be critical in eliminating the shadowy terrorist networks we now face,” and he said that, “no president should ever hesitate to use force -- unilaterally if necessary,” not simply to “protect ourselves,” but also to protect America’s “vital interests.”[66]

Sure enough, Obama followed through on those promises. Obama increased defense spending from the previous year. Alone, the United States spends almost as much on its military as the rest of the world combined, including seven times the amount as the next largest defense spender, China.[67]

In October of 2009, Obama signed the largest-ever bill for military spending, amounting to $680 billion. At the same time, he authorized a spending bill of $44 billion for the Department of Homeland Security. A sad irony was that, “Obama signed the record Pentagon budget less than three weeks after receiving the Nobel Peace Prize.”[68]

In February of 2010, Obama asked Congress to approve a new record-setting defense budget, at $708 billion.[69] Interestingly, “the Pentagon budget increased for every year of the first decade of the 21st century, an unprecedented run that didn't even happen in the World War II era, much less during Korea or Vietnam.” Further, “if the government's current plans are carried out, there will be yearly increases in military spending for at least another decade.”[70]

As Eric Margolis wrote in February of 2010:

Obama’s total military budget is nearly $1 trillion. This includes Pentagon spending of $880 billion. Add secret black programs (about $70 billion); military aid to foreign nations like Egypt, Israel and Pakistan; 225,000 military “contractors” (mercenaries and workers); and veterans’ costs. Add $75 billion (nearly four times Canada’s total defence budget) for 16 intelligence agencies with 200,000 employees.

[. . . ] China and Russia combined spend only a paltry 10% of what the U.S. spends on defence.

There are 750 U.S. military bases in 50 nations and 255,000 service members stationed abroad, 116,000 in Europe, nearly 100,000 in Japan and South Korea.

Military spending gobbles up 19% of federal spending and at least 44% of tax revenues. During the Bush administration, the Iraq and Afghanistan wars — funded by borrowing — cost each American family more than $25,000.

Like Bush, Obama is paying for America’s wars through supplemental authorizations — putting them on the nation’s already maxed-out credit card. Future generations will be stuck with the bill.[71]

Thus, the American Empire is in decline, spending itself into utter debt and is at the point of “imperial overreach.” As Eric Margolis wrote, “If Obama really were serious about restoring America’s economic health, he would demand military spending be slashed, quickly end the Iraq and Afghan wars and break up the nation’s giant Frankenbanks.”[72]

So, while people at home are on food stamps, welfare, living in tent cities, going to soup kitchens, getting by on debt, and losing their jobs; America sends forces abroad, conducting multiple wars in Iraq and Afghanistan, expanding the war into Pakistan, funding military operations in Yemen, Somalia, Uganda, building massive new military bases in Pakistan and Colombia and providing military aid to governments around the world. As the empire expands, the people become more impoverished.

We cannot afford to ignore the relationship between war, poverty and race. The poor are made to fight the poor; both are often disproportionately people of colour. Yet war enriches the upper class, at least powerful sects of it in industry, the military, oil and banking. In a war economy, death is good for business, poverty is good for society, and power is good for politics. Western nations, particularly the United States, spend hundreds of billions of dollars a year to murder innocent people in far-away impoverished nations, while the people at home suffer the disparities of poverty, class, gender and racial divides. We are told we fight to “spread freedom” and “democracy” around the world; yet, our freedoms and democracy erode and vanish at home. You cannot spread what you do not have. As George Orwell once wrote:

The war is not meant to be won, it is meant to be continuous. Hierarchical society is only possible on the basis of poverty and ignorance. This new version is the past and no different past can ever have existed. In principle the war effort is always planned to keep society on the brink of starvation. The war is waged by the ruling group against its own subjects and its object is not the victory over either Eurasia or East Asia, but to keep the very structure of society intact.

The Transnational Homeland Security State and the Decline of Democracy

2012-02-03T13:11:00.003-07:00

by Andrew Gavin Marshall

As the western world is thrown into debt bondage and the harsh reality of the draconian economic ‘reforms’ to follow, a social collapse seems increasingly inevitable. We will soon witness the collapse of western ‘civilization’. The middle classes of the west will dissolve into the lower labour class. The wealthy class, already nearly at par with the middle class in terms of total consumption, will become the only consuming class.

The state structure itself will be altering; nation-states will become subordinate to supra-national continental governance structures and global governance entities simultaneously. Concurrently, state structures will no longer maintain their democratic facades, as the public state is gutted, where all that remains and is built upon is the state apparatus of oppression. States will become tools of authoritative control, their prime purpose will be in establishing a strong military, as well as police-state apparatus to control the people. This is the dawning of the ‘Homeland Security State’ on a far grander scale than we have previously imagined. The object of ‘totalitarianism’ is to have ‘total control’. In this project of total control, state borders, as we know them today, will have to vanish; the institutions of oppression and control will be globalized.

As society collapses, the social foundations of the middle class will be pulled out from under their feet. When people are thrown to the ground, they tend to want to stand back up again. The middle class will become a rebellious, possibly even revolutionary class, with riots and civil unrest a very likely reality. The lower class itself will likely partake in the unrest; however, the youth of the middle class will be thrown into a ‘poverty of expectations’, where the world as they have known it and the world they had expectations to rise into, will be taken from them. Civil unrest is as inevitable as summer after spring.

When society collapses, the state will close itself over society to prevent the people from overtaking the levers of power and rebuilding a new social foundation. Nation-states are about to reveal to the people of the west their true nature, and that which the people of impoverished lands the world over have been exposed to for so long. At their heart, nations seek and serve power; their skeleton is not the public welfare they speak of espousing, but the apparatus of oppression that they build and expand, regardless of all other considerations.

In February of 2009, Obama’s intelligence chief, Dennis Blair, the Director of National Intelligence, told the Senate Intelligence Committee that the economic crisis has become the greatest threat to U.S. national security:

I’d like to begin with the global economic crisis, because it already looms as the most serious one in decades, if not in centuries ... Economic crises increase the risk of regime-threatening instability if they are prolonged for a one- or two-year period... And instability can loosen the fragile hold that many developing countries have on law and order, which can spill out in dangerous ways into the international community.[1]

What is being said here is that economic crises (“if they are prolonged for a one or two year period”) pose a major threat to the established powers – the governing and economic powers – in the form of social unrest and rebellion (“regime-threatening instability”). The colonial possessions – Africa, South America, and Asia – will experience the worst of the economic conditions, which “can loosen the fragile hold that many developing countries have.” This can then come back to the western nations and imperial powers themselves, as the riots and rebellion will spread home at the same time as they may lose control of their colonial possessions – eliminating western elites from a position of power internationally, and acquiescence domestically. Thus, the rebellion and discontent in the ‘Third World’ “can spill out in dangerous ways into the international community.”

In this type of scenario, where established western elites are threatened with losing control of vast imperial possessions (resources, key strategic points), while concurrently are threatened with revolt at home, the end result is inevitably the rapid militarization of the foreign and domestic spheres. It is no coincidence that as the economic crisis emerged in late 2007, the Pentagon military Africa Command (AFRICOM) was created in December of 2007, setting the stage for a military-based foreign policy for the entire continent of Africa in an objective aimed at securing its resources.

As the economic crisis continued, the domestic populations of western nations, particularly the United States, were increasingly subjected to further surveillance and police state measures. We have body scanners at airports, legal immunity was granted to corporations that spy on our telephone calls and emails and internet-usage. The Homeland Security State is transnationalizing, following the economic crisis, itself.

The powers of globalization – the state, banks, corporations, foundations, and international organizations – are well aware of the effects this social reorganization will have on the people and the reactions that are likely to arise. After all, these same organized powers have been doing exactly this to the rest of the world for decades and even centuries. What we are about to witness is not entirely new, it’s just being done on an entirely new scale, and it’s largely new to us.

The US Commission on National Security in the 21st Century

In addressing the issue of ‘Homeland Security’, it is important to analyze the origins of the structure, itself. In the United States, the Department of Homeland Security was officially formed in 2003 in reaction to the events of 9/11 and with the stated intent of ‘protecting the homeland’ from threats, primarily terrorism. Pushing the official myth aside, we can see that ‘Homeland Security’ was planned in advance of 9/11, and is not about protecting, but rather controlling, the people.

In 1998, President Bill Clinton and the Speaker of the House, Newt Gingrich, established a commission to look at how the United States “provides for its security in a more comprehensive way than had been done in the last half century”:

The Secretary of Defense funded that effort and, in conjunction with the Secretary of State and the National Security Advisors, selected 14 prominent Americans to serve on that Commission, and provide the guidance and the strategic direction, and ultimately all of the important policy choices that would be made by the Commission.[2]

The final report was released on January 31, 2001, and was the most comprehensive review of US national security since the National Security Act of 1947, which created the CIA and the National Security Council.

The two Co-Chairs of the Commission were Senators Gary Hart and Warren Rudman. Commissioners included Anne Armstrong, who has served on the boards of American Express, Halliburton, General Motors, as well as the board of the Center for Strategic and International Studies (CSIS), one of the premier think tanks in the United States; Norman Ralph Augustine, former CEO of Lockheed Martin, one of the largest weapons manufacturers and military corporations in the world; John Rogers Galvin, a retired General and former Supreme Allied Commander of Europe for NATO; Leslie Gelb, President Emeritus of the Council on Foreign Relations, a former Pentagon and State Department official; Newt Gingrich, then Speaker of the House, now a senior fellow at the American Enterprise Institute, a neo-conservative think tank; Lee Hamilton, who would later be Co-Chair of the 9/11 Commission, a former Congressman for over 30 years who is currently President of the Woodrow Wilson International Center for Scholars, and is a long-time member of both the Council on Foreign Relations and the Trilateral Commission; Donald Rice, former CEO of RAND Corporation, a major Pentagon-linked think tank, and has served on the boards of Wells Fargo, Unocal, and Chevron; and James R. Schlesinger, former US Secretary of Defense, former Secretary of Energy, former CIA director, had previously worked with the RAND Corporation, and was more recently a Senior Adviser to Lehman Brothers.

In short, the Commission was made up of key individuals heavily linked to America’s highly influential network of elite think tanks, premier among them, the Council on Foreign Relations, but also including the American Enterprise Institute, CSIS, and the RAND Corporation. This was, without a doubt, an elite-driven commission.

The Commission produced three major reports. The first report, New World Coming: American Security in the 21st Century, was released in September of 1999, and was designed to take a look at the global environment over the next 25 years. The report made 12 key observations, among them were:

1) An economically strong United States is likely to remain a primary political, military, and cultural force through 2025, and will thus have a significant role in shaping the international environment.

4) World energy supplies will remain largely based on fossil fuels.

5) While much of the world will experience economic growth, disparities in income will increase and widespread poverty will persist.

8) Though it will raise important issues of sovereignty, the United States will find in its national interest to work with and strengthen a variety of international organizations.

9) The United States will remain the principal military power in the world.

11) We should expect conflicts in which adversaries, because of cultural affinities different from our own, will resort to forms and levels of violence shocking to our sensibilities.[3]

They give a variety of conclusions in their report. The first among them was that, “America will become increasingly vulnerable to hostile attack on our homeland, and our military superiority will not entirely protect us.” They state quite emphatically that, “Americans will likely die on American soil, possibly in large numbers.” Another major conclusion stated that, “The national security of all advanced states will be increasingly affected by the vulnerabilities of the evolving global economic infrastructure.”[4] Expanding upon this conclusion, the report stated:

[E]conomic integration and fragmentation will co-exist. Serious and unexpected economic downturns, major disparities of wealth, volatile capital flows, increasing vulnerabilities in global electronic infrastructures, labor and social disruptions, and pressures for increased protectionism will also occur... For most advanced states, major threats to national security will broaden beyond the purely military.[5]

Another major conclusion of the report was that, “Energy will continue to have major strategic significance,” emphasizing that Persian Gulf oil is a necessity to control. Another key conclusion of the Commission was that, “The sovereignty of states will come under pressure, but will endure,” elaborating that:

The international system will wrestle constantly over the next quarter century to establish the proper balance between fealty to the state on the one hand, and the impetus to build effective transnational institutions on the other. This struggle will be played out in the debate over international institutions to regulate financial markets, international policing and peace-making agencies, as well as several other shared global problems. Nevertheless, global forces, especially economic ones, will continue to batter the concept of national sovereignty.[6]

Further conclusions of the Commission include seeing an increase in “the deliberate terrorizing of civilian populations,” military competition in space, and that, “The United States will be called upon frequently to intervene militarily.”[7]

The second report of the Commission, commonly known as the Hart-Rudman Commission, Seeking a National Strategy, was released in April of 2000. In this report, the Commission emphasized the importance of maintaining and expanding the American empire, as “The maintenance of America’s strength is a long-term commitment and cannot be assured without conscious, dedicated effort.”[8]

In focusing on protecting America’s “vital interests,” the report stated that, “U.S. military, law enforcement, intelligence, economic, financial, and diplomatic means must be effectively integrated for this purpose.”[9] The report also suggests that the United States must control “Persian Gulf and other major energy supplies,” cynically claiming that this would be done to ensure that energy supplies “are not wielded as political weapons directed against the United States or its allies and friends.”[10]

The report further recommends that the United States “needs five kinds of military capabilities”:

* nuclear capabilities to deter and protect the United States and its allies from attack;

* homeland security capabilities;

* conventional capabilities necessary to win major wars;

* rapidly employable expeditionary/intervention capabilities; and

* humanitarian relief and constabulary capabilities.[11]

The third and final report of the Hart-Rudman Commission, Road Map for National Security, was published in February of 2001. The main conclusion of the Commission was that, “significant changes must be made in the structures and processes of the U.S. national security apparatus.” Chief among the recommendations was “Securing the National Homeland.” The report warned prophetically that, “A direct attack against American citizens on American soil is likely over the next quarter century.” Based upon this assumption:

We therefore recommend the creation of an independent National Homeland Security Agency (NHSA) with responsibility for planning, coordinating, and integrating various U.S. government activities involved in homeland security. NHSA would be built upon the Federal Emergency Management Agency, with the three organizations currently on the front line of border security—the Coast Guard, the Customs Service, and the Border Patrol—transferred to it. NHSA would not only protect American lives, but also assume responsibility for overseeing the protection of the nation’s critical infrastructure, including information technology.[12]

As a part of the creation of a National Homeland Security Agency, the Commission further recommended the involvement of the Department of Defense in this process and structure, as well as reorganizing the National Guard so that homeland security becomes its “primary mission.”[13]

In March of 2001, six months prior to the 9/11 attacks, Congressman Mac Thornberry proposed a bill to create a National Homeland Security Agency based upon the recommendations of the Hart-Rudman Commission. Hearings were held, but no further action was taken on the bill.[14]

Roughly six months later, the September 11th attacks took place in the United States. On 9/11, a live Fox News report of the Pentagon attacks stated that, “The part of the Pentagon that was struck today by an airliner was in fact undergoing renovation, and as a consequence, not all the offices there were occupied.” Further, the reporter stated that, “A couple of the offices that were in that portion of the Pentagon – or portions that were struck – were offices that deal with trying to deal with counter-terrorism. One is called the Office of Homeland Defense, it’s a newly-created office that was slated to get a big budget increase.”[15]

Warren Rudman, co-Chair of the Commission spoke at the Council on Foreign Relations within days of the September 11th attacks, commenting on how the recommendations of the Commission had not been thoroughly put in place prior to the attacks. He stated that, “Unfortunately, we Americans I guess sometimes have to get hit with a two by four to get with it. I have no doubt that we will get with it.” Senator Gary Hart, the other co-Chair, stated that the events of 9/11 “are in fact the introduction to a totally new century.” Lee Hamilton, another commissioner, told the same audience at the Council on Foreign Relations that the “War on Terror” is “a permanent war, that it is an ongoing war.” He further stated that, “We must strengthen dramatically our defense of the homeland, and that means putting a lot more resources into borders and airports and cities, and protecting the critical infrastructure of the country.”[16]

Eleven days after the 9/11 attacks, President Bush announced he would create an Office of Homeland Security in the White House, of which he would appoint Governor Tom Ridge as director. On October 8, 2001, Executive Order 13228 was issued, establishing two agencies within the White House: the Office of Homeland Security (OHS), “tasked to develop and implement a national strategy to coordinate federal, state, and local counter-terrorism efforts to secure the country from and respond to terrorist threats or attacks,” and the Homeland Security Council (HSC), “to advise the President on homeland security matters, mirroring the role the National Security Council (NSC) plays in national security.”[17]

In October of 2001, Senator Joe Lieberman introduced a bill to establish a Department of National Homeland Security, following the recommendations of the Hart-Rudman Commission. While hearings were held, no further action was initially taken. On June 6, 2002, President Bush gave a speech in which he proposed the creation of a permanent Cabinet-level Department of Homeland Security.[18] On June 18, 2002, Bush formally submitted his proposal for the Department of Homeland Security to Congress as the Homeland Security Act of 2002. The House passed the bill on July 26, 2002, and the Senate on November 19, 2002. Bush signed the Homeland Security Act of 2002 into law on November 25, 2002.[19] The Department of Homeland Security thus became operational on January 24, 2003, with Tom Ridge as the first Secretary of Homeland Security.

The 9/11 Commission, formed in November of 2002, issued its final report in July of 2004. In it, the Commissioners, the co-Chair of which was Lee Hamilton, a prominent member of the Hart-Rudman Commission, recommended a number of key strategies aimed at “fighting terrorism.” These essentially amounted to a strengthening of “Homeland Security” and an expansion of a variety of police state measures.

Among the recommendations of the 9/11 Commission were to implement, under the Department of Homeland Security, a “biometric passport” system, and to “exchange terrorist information with trusted allies, and raise U.S. and global border security standards for travel and border crossing over the medium and long term through extensive international cooperation.” Further, the Commission recommended the creation of I.D. cards, as “Secure identification should begin in the United States. The federal government should set standards for the issuance of birth certificates and sources of identification, such as drivers licenses.” It further recommended expanding “no-fly” and various other “watch” lists. As well as this, the “information sharing among government agencies and by those agencies with the private sector” should be expanded.[20]

The USA Patriot Act

The USA Patriot Act, passed by Congress in the immediate wake of the 9/11 attacks and signed by President Bush into law on October 26, 2001, was in fact written up prior to the attacks of 9/11.[21]

In a 2002 edition of the American University Law Review, an analysis of the effects that the USA Patriot Act has on civil liberties was undertaken. In the introduction, the authors state that:

Americans' liberties have been trammeled in a variety of different ways. Under the guise of stopping terrorism, law enforcement officials and government leaders have now been given the right to conduct searches of homes and offices without prior notice, use roving wiretaps to listen in on telephone conversations, and monitor computers and e-mail messages, even to the degree of eavesdropping on attorney/client conversations. In addition, the President has made efforts to bring suspected terrorists into military tribunals for prosecution. Finally, a growing sentiment for the establishment of a national identification card system in the United States has emerged, threatening to force all citizens to be "tagged."[22]

The Patriot Act centralizes law enforcement authority under the Justice Department. Further, it coordinates domestic intelligence gathering from the Justice Department to the Central Intelligence Agency (CIA), and it has thus “given the CIA the central authority to gather and use intelligence information garnered from domestic sources, including intelligence on United States citizens and residents.” This authority “permits the CIA to begin, once again, to spy on American citizens.”[23]

As part of the Patriot Act, the definition of ‘domestic terrorism’ itself has changed, and now “involve acts dangerous to human life that are a violation of the criminal laws of the United States or of any State,” as well as activities that “appear to be intended” to “intimidate or coerce a civilian population; to influence the policy of a government by mass destruction, assassination, or kidnapping; or to effect the conduct of a government by mass destruction, assassination, or kidnapping; and occur primarily within the territorial jurisdiction of the United States.” Ultimately, this can “include any such acts that result in virtually any federal crime of violence,” and “these extensions of the definition of "terrorist" could bring within their sweep diverse domestic political groups.”[24]

The Patriot Act also assaults the First Amendment right to advocate ideas, to speak freely, to associate with whomever one chooses, and to petition the government for redress of grievances. The Patriot Act permits searches and seizures from businesses, and subsequently, “the owners and officers of the business are gagged from disclosing that they have been the subject of an FBI search and seizure, presumably including disclosures to the media.” The Attorney General John Ashcroft referred to civil libertarians who oppose the Patriot Act as “unpatriotic” and “un-American” and said that their “tactics only aid terrorists.” Thus, “the Attorney General's statements demonstrate an extreme insensitivity to the fundamental American right to dissent without fear of retaliation.”[25]

The Fourth Amendment to the Constitution, which protects against unreasonable searches and seizures, is also violated by the Patriot Act, as it allows for the “the wholesale disregard of the historic constitutional protections of notice, probable cause, and proportionality.” The monitoring of communications is an area that is drastically exploited by the Patriot Act in violation of Constitutional law, as wiretapping was only allowed upon the showing of probable cause, under the authority of the Foreign Intelligence Surveillance Act (FISA). However, under the Patriot Act, FISA orders are not done under the basis of probable cause, but on the “certification” that “the information sought is related to the professed law enforcement purpose.” The surveillance is not only of telephones, but also of internet-usage: “The ability to monitor Internet sites visited by the subject of a search, in the absence of a showing of probable cause or even reasonable suspicion, is an unprecedented expansion of federal surveillance powers.”[26]

Further, the Patriot Act violates the right to be tried by a jury of your peers, and instead, for terrorism cases, puts in place a system of “military tribunals” to try the accused. Further, attorney-client privilege is now done away with, as correspondence between prisoners and their legal counsel can be monitored, and it “is not limited to alleged terrorists; rather, it extends to all incarcerated individuals.” Further, many of those rounded up after 9/11 – reaching a number over 1,000 – were discouraged from seeking legal counsel, “or have had access to counsel blocked outright.” Amazingly, “On November 13, 2001, President Bush issued an Executive Order suspending the rights of indictment, trial by jury, appellate relief, and habeas corpus for all non-citizen persons accused of aiding or abetting terrorists.” The military commissions will not “apply the principles of law or the rules of evidence that are used in normal criminal cases,” where secret evidence can be used, and “the military will sit as both the adjudicator of fact and arbiter of law. In addition, these tribunals may impose the death penalty, even though only a two-third majority vote, instead of the unanimity mandated in civilian trials, is required for a sentence.”[27]

Suspects will not be granted the writ of habeas corpus – the several-hundred-year old legal writ that guarantees prisoners the right to be found whether they are imprisoned legally or should be released from custody. Immigrants, further, may be detained indefinitely and never granted the writ of habeas corpus to determine if their detention is lawful. The Patriot Act further allows for the monitoring of personal financial transactions, banking records, and educational records. Moreover, it also sets the stage for the building of “biometric identification systems” for citizens, such as fingerprint databases.[28]

Major amendments were added to the Patriot Act in 2003, dubbing it the Patriot Act II. As part of the amendments, the government will be granted the ability to build a massive DNA database of suspects.[29] Jack Balkin, a Yale Law School professor, wrote an article for the Los Angeles Times in which he explained that one “measure would remove existing protections under the Freedom of Information Act, making it easier for the government to hide whom it is holding and why, and preventing the public from ever obtaining embarrassing information about government overreaching.” Further:

Perhaps the most troubling section would strip U.S. citizenship from anyone who gives "material support" to any group that the attorney general designates as a terrorist organization.[30]

Other provisions that the bill would allow for include making it “easier for the government to initiate surveillance and wiretapping of U.S. citizens under the shadowy, top-secret Foreign Intelligence Surveillance Court,” and it would further, “Harm Americans’ ability to receive a fair trial by limiting defense attorneys from challenging the use of secret evidence.” In true draconian fashion, it would permit “the sampling and cataloguing of innocent Americans’ genetic information without court order and without consent.”[31]

The Patriot Act was subsequently renewed by Congress in 2006, and in September of 2009, the Obama administration recommended Congress renew the Patriot Act once again.[32] This should come as no surprise, since in 2008, while a Senator, Obama voted for legislation that allowed for warrantless wiretapping of American’s electronic communications, and that same legislation “also immunized the nation’s telecommunication companies from lawsuits charging them with being complicit with the Bush administration’s warrantless, wiretapping program.”[33] In February of 2010, Congress overwhelmingly voted to extend the Patriot Act without adding any protections for civil liberties.[34]

The NSA: Big Brother In Action

In December of 2005, the New York Times ran an article breaking the story of the National Security Agency’s (NSA’s) warrantless wiretapping program, as “Months after the Sept. 11 attacks, President Bush secretly authorized the National Security Agency to eavesdrop on Americans and others inside the United States.” Elaborating:

Under a presidential order signed in 2002, the intelligence agency has monitored the international telephone calls and international e-mail messages of hundreds, perhaps thousands, of people inside the United States without warrants over the past three years.[35]

The program is obviously illegal, since it does not operate with warrants; however, it is justified under the all-encompassing “War on Terror”. While the New York Times broke the story, they are also complicit in covering it up, as they had the story long before it was published, and in fact the paper delayed the story for over one year, until long after the 2004 Presidential election.[36]

USA Today expanded upon the previous story, and revealed in 2006 that, “The National Security Agency has been secretly collecting the phone call records of tens of millions of Americans, using data provided by AT&T, Verizon and BellSouth.” Further:

The NSA program reaches into homes and businesses across the nation by amassing information about the calls of ordinary Americans — most of whom aren't suspected of any crime.[37]

One official stated, “It's the largest database ever assembled in the world,” and that the goal of the NSA is “to create a database of every call ever made” within the United States:

For the customers of these companies, it means that the government has detailed records of calls they made — across town or across the country — to family members, co-workers, business contacts and others.

The three telecommunications companies are working under contract with the NSA, which launched the program in 2001 shortly after the Sept. 11 terrorist attacks, the sources said. The program is aimed at identifying and tracking suspected terrorists, they said.[38]

In 2006, an AT&T employee blew the whistle on the spying activities undertaken by the largest telecommunications corporation in the United States on behalf of the NSA. He revealed that AT&T provided the NSA “with full access to its customers' phone calls, and shunted its customers' internet traffic to data-mining equipment installed in a secret room in its San Francisco switching center.” Mark Klein, a retired AT&T communications technician, was taking part in a lawsuit filed by the Electronic Frontier Foundation against AT&T for its part in the illegal surveillance program:

According to a statement released by Klein's attorney, an NSA agent showed up at the San Francisco switching center in 2002 to interview a management-level technician for a special job. In January 2003, Klein observed a new room being built adjacent to the room housing AT&T's #4ESS switching equipment, which is responsible for routing long distance and international calls.

"I learned that the person whom the NSA interviewed for the secret job was the person working to install equipment in this room," Klein wrote. "The regular technician work force was not allowed in the room."

Klein's job eventually included connecting internet circuits to a splitting cabinet that led to the secret room. During the course of that work, he learned from a co-worker that similar cabinets were being installed in other cities, including Seattle, San Jose, Los Angeles and San Diego.[39]

In March of 2007, it was revealed that Mark Klein’s efforts to blow the whistle on AT&T’s involvement in the NSA surveillance program were being blocked by U.S. intelligence officials as well as top editors of the Los Angeles Times. In his first broadcast interview with Nightline, Mark Klein revealed that:

[H]e collected 120 pages of technical documents left around the San Francisco office showing how the NSA was installing "splitters" that would allow it to copy both domestic and international Internet traffic moving through AT&T connections with 16 other trunk lines.[40]

Klein attempted to take his documents to the LA Times to blow the whistle publicly on the program, which he referred to as “an illegal and Orwellian project.” However, “after working for two months with LA Times reporter Joe Menn, Klein says he was told the story had been killed at the request of then-Director of National Intelligence John Negroponte and then-director of the NSA Gen. Michael Hayden.” The decision by the Los Angeles Times to kill the story “was made by the paper's editor at the time, Dean Baquet, now the Washington bureau chief of The New York Times.” Baquet confirmed he spoke with Hayden and Negroponte, but claimed “government pressure played no role in my decision not to run the story.”[41]

In November of 2007, Keith Olbermann interviewed Mark Klein on MSNBC, where Klein elaborated on the secret program, saying that virtually all internet traffic in the entire country was handed over to the NSA. He appeared on MSNBC at a time when Congress was debating whether or not to grant the telecom companies legal immunity for participating in the NSA program, which would thus shut down all pending legal action being taken against the companies for their involvement in the illegal program. Klein reflected on his job, saying that, “Here I am, being forced to connect the Big Brother machine.”[42]

Total Information Awareness (TIA)

In November of 2002, the New York Times ran a story that revealed the existence of a secret Pentagon program called “Total Information Awareness” (TIA). The director of the program is Vice Admiral John Poindexter, a convicted criminal for his involvement in the the Iran-Contra affair (involving smuggling arms and drugs in order to finance terrorists in South America). Poindexter said that the program:

[W]ill provide intelligence analysts and law enforcement officials with instant access to information from Internet mail and calling records to credit card and banking transactions and travel documents, without a search warrant.[43]

Poindexter headed the Information Awareness Office, which was run out of the Pentagon’s Defense Advanced Research Projects Agency (DARPA): “The office is responsible for developing new surveillance technologies in the wake of the Sept. 11 attacks.” Marc Rotenberg, director of the Electronic Privacy Information Center in Washington, said that, “This could be the perfect storm for civil liberties in America,” and that, “The vehicle is the Homeland Security Act, the technology is Darpa and the agency is the F.B.I. The outcome is a system of national surveillance of the American public.”[44] DARPA, existing within the Pentagon since the late 1950s, has been referred to as the “Department of Mad Scientists.”[46]

After the program was made public, the outcry from civil liberties advocates created enough of a stir for Congress to put a hold on the program. The Pentagon then submitted a change in the program to Congress, and as the Washington Post revealed, it was “a name change.” The word “Total” was replaced with “Terrorism,” and thus, the program would be called, “Terrorism Information Awareness.”[46]

The New York Times summed up the program as such:

Every purchase you make with a credit card, every magazine subscription you buy and medical prescription you fill, every Web site you visit and e-mail you send or receive, every academic grade you receive, every bank deposit you make, every trip you book and every event you attend — all these transactions and communications will go into what the Defense Department describes as "a virtual, centralized grand database."

To this computerized dossier on your private life from commercial sources, add every piece of information that government has about you — passport application, driver's license and bridge toll records, judicial and divorce records, complaints from nosy neighbors to the F.B.I., your lifetime paper trail plus the latest hidden camera surveillance — and you have the supersnoop's dream: a " Total Information Awareness" about every U.S. citizen.[47]

The San Francisco Chronicle published a story on Total Information Awareness in which it opened with the phrase, “Live by the Internet, be enslaved by the Internet.” The article elaborated:

DARPA, the Defense Advanced Research Projects Agency, which funded the development of the Internet, is now funding the Information Awareness Office (IAO) to develop a "large-scale counterterrorism database." The idea is to keep track of every bit of information on everyone in the country and "detect, classify and identify foreign terrorists."[48]

Further, as the article pointed out, even the logo of the Total Information Awareness program is eerie, as “the IAO [Information Awareness Office] logo shows an eye on top of a pyramid shining onto a globe.”[49] Beneath the logo, written in Latin, is a phrase that translates into “Knowledge is Power.”

In September of 2003, Congress ended funding for the program. The media then hailed the TIA program as “dead and gone.” Yet, the funding was cut for the specific program as envisaged under the umbrella of TIA. The various programs within TIA could continue as separate projects, with the full funding and support of Congress.

In 2004, the Associated Press reported that, “some of those projects from retired Adm. John Poindexter's Total Information Awareness effort were transferred to U.S. intelligence offices, according to congressional, federal and research officials.” Steve Aftergood of the Federation of American Scientists, which tracks work by U.S. intelligence agencies, stated that, “There may be enough of a difference for them to claim TIA was terminated while for all practical purposes the identical work is continuing.”[50]

In 2006, it was revealed that TIA stopped “in name only” and in fact does live on, and it “was moved from the Pentagon's research-and-development agency to another group, which builds technologies primarily for the National Security Agency.” Interestingly, “Two of the most important components of the TIA program were moved to the Advanced Research and Development Activity, housed at NSA headquarters in Fort Meade, Md.” The program has heavy involvement from private defense and intelligence contractors, highly secretive corporations that get major contracts from US intelligence agencies to be able to undertake intelligence activities that aren’t subjected to Congressional oversight.[51]

The Modern Surveillance Society

The western world is fast becoming a transnational surveillance society, with the United Kingdom leading the charge. In 2006, the British information commissioner, Richard Thomas, said that Britain was a surveillance society. There were more than 4.2 million CCTV (Closed Circuit Television) cameras in the U.K., about 1 for every 14 people. The Surveillance Studies Network, an organization of academics, released a report on surveillance in which it was revealed that compared to other western nations the U.K. was “the most surveilled country.” One of the lead authors stated that, “We have more CCTV cameras and we have looser laws on privacy and data protection.”[52]

In February of 2009, the British House of Lords Constitution Committee “warned that increasing use of surveillance by the government and private companies is a serious threat to freedoms and constitutional rights.” The report stated:

The expansion in the use of surveillance represents one of the most significant changes in the life of the nation since the end of the Second World War. Mass surveillance has the potential to erode privacy. As privacy is an essential pre-requisite to the exercise of individual freedom, its erosion weakens the constitutional foundations on which democracy and good governance have traditionally been based in this country.

Increased use of CCTV in public areas, the DNA database, the government's planned national ID card scheme and the various databases of British children are all threatening traditional freedoms, the report cautioned.[53]

One article in a British newspaper pointed out in 2007 that George Orwell’s nightmare as depicted in 1984 has become a reality, and with a twist:

According to the latest studies, Britain has a staggering 4.2million CCTV cameras - one for every 14 people in the country - and 20 per cent of cameras globally. It has been calculated that each person is caught on camera an average of 300 times daily.[54]

The article pointed out that within 200 yards of Orwell’s old home in North London, “there are 32 CCTV cameras, scanning every move.” ‘Big Brother is Watching You.’[55] In May of 2007, a watchdog group revealed that, “The vast majority of Britain's CCTV cameras are operating illegally or in breach of privacy guidelines.” The number may be as high as 90% of CCTV cameras being illegal.[56]

In 2008, senior British police officials revealed that with all of the CCTV cameras in the U.K., supposedly under the auspices of ‘preventing crime’, “Only 3% of street robberies in London were solved using CCTV images, despite the fact that Britain has more security cameras than any other country in Europe.”[57]

In 2009, it was revealed that, “Britain has one and a half times as many surveillance cameras as communist China, despite having a fraction of its population.” While there are 4.2 million CCTV cameras in Britain, 1 for every 14 people, “in police state China, which has a population of 1.3billion, there are just 2.75 million cameras, the equivalent of one for every 472,000 of its citizens.” An official from a pressure group, Privacy International, stated that, “As far as surveillance goes, Britain has created the blueprint for the 21st century non-democratic regime.”[58]

In August of 2009, it was revealed that the British government had come up with a vast new Orwellian idea, terrifying in its scope and intent:

£400 million ($668 million) will be spent on installing and monitoring CCTV cameras in the homes of private citizens. Why? To make sure the kids are doing their homework, going to bed early and eating their vegetables. The scheme has, astonishingly, already been running in 2,000 family homes. The government’s “children’s secretary” Ed Balls is behind the plan, which is aimed at problem, antisocial families. The idea is that, if a child has a more stable home life, he or she will be less likely to stray into crime and drugs.

It gets worse. The government is also maintaining a private army, incredibly not called “Thought Police”, which will “be sent round to carry out home checks,” according to the Sunday Express. And in a scheme which firmly cements the nation’s reputation as a “nanny state”, the kids and their families will be forced to sign “behavior contracts” which will “set out parents’ duties to ensure children behave and do their homework.”[59]

In November of 2009, it was revealed that, “CCTV cameras are being fitted inside family homes by council 'snoopers' to spy on neighbours in the street outside.”[60] In January of 2010, the Guardian reported that, “Police in the UK are planning to use unmanned spy drones, controversially deployed in Afghanistan, for the "routine" monitoring of antisocial motorists, protesters, agricultural thieves and fly-tippers, in a significant expansion of covert state surveillance.” Effectively, it will become “CCTV in the Sky.”[61]

There have even been moves to attach microphones to CCTV cameras, “designed to monitor rowdy bars and nightclubs in central London. They will also be installed in housing estates in an attempt to stop nuisance neighbours.” Elaborating on the usage of such microphones, “The devices would be programmed to trigger an automatic alert if noise levels get too high.”[62]

Further, “talking CCTV cameras” which allow for “operators to publicly shame offenders is to be extended across the country.” John Reid, the Home Secretary, stated, “It helps counter things like litter through drunk or disorderly behaviour, gangs congregating.” In a strange psychological twist, “In a bid to shame offenders into acting properly, the Government is drafting in children to provide the admonition.” The government has thus undertaken what all police states and totalitarian societies ultimately do: recruit the children of the nation as spies. The government began competitions at schools:

Activities, such as designing posters that challenge bad behaviour and taking part in neighbourhood litter picks, help educate children about acceptable behaviour while at the same time they are encouraged to use their 'pester power' in a positive way - reminding grown-ups how to behave.

The winning schoolchildren will be invited to become the 'voice' of the Talking CCTV in their town or city's CCTV control room for one day - the day of the switch-on - later this year.[63]

Within one week of the previous report, “Britain's talking CCTV cameras are to issue their first apology for embarrassing a blameless passerby on the day the government announces plans to extend the anti-vandalism scheme to 20 town centres.” Marie Brewster, a young mother, had crumpled up some garbage and put it in her baby carriage, and then heard a voice say, “Please place the rubbish in the bin provided.”[64]

The U.K. has been implementing major surveillance and information databases on its citizens, including a database on Britain’s children, a “£224m directory, called ContactPoint, holds the name, address, date of birth, GP and school of all under-18s, and is aimed at helping professionals reach children they suspect are at risk.” Due to this database, “Doctors, social workers and police can look up details on every child in England.”[65] Britain has also unveiled a National ID Card program, of which a report of the London School of Economics revealed has many problems, including:

[C]ost, renewing the biometric testing, replacing ID cards, enrolling difficulties, difficulties with card reader machines, non-cooperation from the public, civil liberty, privacy and legal implications, problems for disabled users, security concerns and the creation of a new offence of identity theft.[66]

In May of 2008, Prime Minister Gordon Brown introduced a new law where “Phone and internet companies will soon be forced to keep logs of internet usage to be made available to the police.” Telecom companies, which were already required by the government to keep track of phone calls, would then be required to keep “records of customers' internet usage, email usage and voice over internet protocol (VoIP) records.”[67]

In October of 2008, it was revealed that GCHQ, the government’s secret eavesdropping agency, “is plotting the biggest surveillance system ever created in Britain.” This would include, “Every call you make, every e-mail you send, every website you visit.”[68] The government expressed an interest in asking companies to monitor how people use social networking sites like Facebook. The government would ask companies “to collect and retain records of communications from a wider range of internet sources, from social networks through to chatrooms and unorthodox methods, such as within online games.”[69]

Further, “The government is compiling a database to track and store the international travel records of millions of Britons,” which would “store names, addresses, telephone numbers, seat reservations, travel itineraries and credit card details of travellers.” One Parliamentarian said, “We are sleepwalking into a surveillance state and should remember that George Orwell's 1984 was a warning, not a blueprint.”[70]

For those that think surveillance is aimed at “protecting” people, more information has come to light which helps identify the true intent of surveillance: control. In 2009, an investigation by the Guardian revealed that, “Police are targeting thousands of political campaigners in surveillance operations and storing their details on a database for at least seven years.” The Guardian reported that, “Photographs, names and video footage of people attending protests are routinely obtained by surveillance units and stored on an ‘intelligence system’,” which “lists campaigners by name, allowing police to search which demonstrations or political meetings individuals have attended.” Further, the program is also monitoring reporters and journalists who report on, cover, or attend protests.[71]

In 2007, the Department of Homeland Security began handing out millions of dollars to local governments across the United States “for purchasing high-tech video camera networks, accelerating the rise of a "surveillance society" in which the sense of freedom that stems from being anonymous in public will be lost,” warned the Boston Globe. The Department of Homeland Security (DHS) “has doled out millions on surveillance cameras, transforming city streets and parks into places under constant observation.” The cameras are often extremely high-tech, as “technicians are developing ways to use computers to process real-time and stored digital video, including license-plate readers, face-recognition scanners, and software that detects” unusual behaviour.[72]

In 2007, it was revealed that there were greatly increased calls for installing surveillance CCTV camera systems in the United States modeled on the U.K., and “In the first such public effort in the U.S., New York is planning to begin the installation of a similar, permanent system for lower Manhattan.” The security cordon around central London is known as the “ring of steel,” which is what New York plans to emulate:

By 2010, as many as 3,000 cameras could be installed. One-third would be owned by the New York Police Department and the other two-thirds by private security agencies working with businesses. All the images would feed into a surveillance center staffed by both the NYPD and private security agents.[73]

The Lower Manhattan Security Initiative, as it is known, is being funded by the City of New York, as well as the Department of Homeland Security.[74] In November of 2008, the NYPD officially “flipped the on switch for their lower Manhattan spy center, where cops monitor surveillance cameras and license plate readers around the clock.”[75] In October of 2009, it was announced that, “Lower Manhattan's network of security cameras, license plate readers and weapons sensors is coming to midtown.” New York’s “Ring of Steel” will extend “into an area that includes Grand Central Terminal, Pennsylvania Station and Times Square.”[76] The Midtown Security Initiative “would use a $24 million federal Homeland Security grant for the project,” which would be expected to be finished in 2011.[77]

In January of 2009, the ACLU warned that, “government-financed surveillance cameras are running rampant across the United States,” as “The federal government has given state and local governments $300 million in grants to fund an ever-growing array of cameras.”[78]

As the Telegraph reported in September of 2009, “The European Union is spending millions of pounds developing ‘Orwellian’ technologies designed to scour the internet and CCTV images for ‘abnormal behaviour’.” One program known as Project Indect, “aims to develop computer programmes which act as "agents" to monitor and process information from web sites, discussion forums, file servers, peer-to-peer networks and even individual computers.” The EU marks a growing trend in the transnationalization of surveillance, as “the increased emphasis on co-operation and sharing intelligence means that European police forces are likely to gain access to sensitive information held by UK police, including the British DNA database.”[79]

In a further analysis of the trend of the transnationalization of surveillance societies, the European Union’s “new five-year plan for justice and home affairs will export the UK's database state to the rest of the EU.” In fact, the EU regularly constructs five-year plans for “justice and home affairs affecting many areas of EU citizens' civil liberties – policing, immigration and asylum, criminal law, databases and data protection.” The Tampere programme was for 2000-2004, which was followed by the Hague programme from 2005-2009, “which included the commitment to bring in biometric passports and ID cards”:

The Tampere programme was drawn up and negotiated by officials of the council of the European Union and the European commission, without any consultation with national or European parliaments, let alone civil society, and adopted in closed sessions by the European council (EU prime ministers).[80]

A report on the new five-year programme being constructed revealed that:

"Every object the individual uses, every transaction they make and almost everywhere they go will create a detailed digital record. This will generate a wealth of information for public security organisations", leading to behaviour being predicted and assessed by "machines" (their term) which will issue orders to officers on the spot. The proposal presages the mass gathering of personal data on travel, bank details, mobile phone locations, health records, internet usage, criminal records however minor, fingerprints and digital pictures that can be data-mined and applied to different scenario – boarding a plane, behaviour on the Tube or taking part in a protest.[81]

Think that’s as bad as it gets? As the Guardian revealed, “it is proposed that by 2014 the EU needs to create a ‘Euro-Atlantic area of cooperation with the USA in the field of freedom, security and justice’,” which “would go far beyond current co-operation and mean that policies affecting the liberties and rights of everyone in Europe would not be determined in London or Brussels but in secret EU-US meetings.”[82] Of course, this program is cynically said to be about “freedom, security and justice,” as in, freedom from justice and security.

The EU plans to build the “largest 10 fingerprint system in the world,” and dauntingly, “Some of the most controversial changes introduced by the treaty of Lisbon are in the area of freedom, security and justice.” The Lisbon Treaty was eventually adopted by every EU nation, following the second vote in Ireland after the Irish first voted ‘no’. In the EU, democracy only counts if it delivers the desired answer. As a result of the Lisbon Treaty being passed, a variety of police state and surveillance measures can be undertaken for the entirety of the EU:

Other initiatives in the pipeline include a target to train a third of all police officers across the EU in a "common culture" of policing; controversial surveillance techniques including "cyber patrols"; an EU "master plan" on information exchange; the transfer of criminal proceedings among EU member states; access to other member states' national tax databases; and EU laws on citizens' right to internet access, among many other things.[83]

The transnationalization of the surveillance society has even expanded vastly into Canada. In 2009, the first independent study of video surveillance was carried out in Canada, in which it revealed that, “At least 14 Canadian municipalities are using surveillance cameras to monitor people in public spaces, and another 16 are considering them or have considered them.” Further, the report identified that, “The use of surveillance cameras has exploded worldwide, especially since the 9/11 attacks.” It concluded that, “the growth of camera surveillance in Canada is undeniable, and is steady.” Further:

Transit officials in Toronto plan to deploy 12,000 cameras on buses, subways and streetcars by the middle [2009]. Montreal’s transit system is adding 1,200 cameras to its surveillance network. Nearly 800 cameras monitor all commuter activity on Vancouver’s 28-kilometre Sky Train route.[84]

In 2008, Ontario’s Privacy Commissioner gave the green light to an expansion of the use of surveillance in Toronto’s transit system. Toronto transit officials had announced plans to install 12,000 cameras in the bus, streetcar and subway system, which “would enable TTC staff or police to view live video or hear audio from any of the security cameras.”[85]

In preparation for the Olympics in Vancouver, it was announced that the government would vastly expand the use of surveillance cameras in the city. While the City had oft-claimed that this was being done in a “temporary” nature for the Olympics, in 2009 it was acknowledged that in fact, they would be permanent.[86] An estimated 900 cameras were to be watching the crowds in Vancouver during the Olympics.[87]

In January of 2010, a report by an independent organization revealed that, “The use of surveillance cameras on city streets in Canadian cities is "mushrooming," but so far the public appears unconcerned.” Notable among the measures are the aims by the Ontario Provincial Police in acquiring “surveillance cameras with automated licence-plate-recognition technology, and the RCMP has installed hundreds of cameras at Vancouver Olympic venues and tourist sites.” Further:

Montreal, Toronto and Vancouver have deployed thousands of surveillance cameras on their transit systems, and half a dozen Canadian cities, including Ottawa, have adopted taxi cameras.[88]

Clearly, this process is not simply a British or American venture, but is endemic of the transnational nature of the surveillance society.

Transnational Totalitarianism

In November of 2008, the National Intelligence Council (which oversees all 16 US intelligence agencies) released a major report analyzing global trends until 2025. It explained that many governments in the west will be “expanding domestic security forces, surveillance capabilities, and the employment of special operations-type forces.” Counterterrorism measures will increasingly “involve urban operations as a result of greater urbanization,” and governments “may increasingly erect barricades and fences around their territories to inhibit access. Gated communities will continue to spring up within many societies as elites seek to insulate themselves from domestic threats.”[89]

Totalitarianism is, “by nature (or rather by definition), a global project that cannot be fully accomplished in just one community or one country. Being fuelled by the need to suppress any alternative orders and ideas, it has no natural limits and is bound to aim at totally dominating everything and everyone.” Further:

The ultimate feature of the totalitarian domination is the absence of exit, which can be achieved temporarily by closing borders, but permanently only by a truly global reach that would render the very notion of exit meaningless. This in itself justifies questions about the totalitarian potential of globalization... Is abolition of borders intrinsically (morally) good, because they symbolize barriers that needlessly separate and exclude people, or are they potential lines of resistance, refuge and difference that may save us from the totalitarian abyss? [Further,] if globalization undermines the tested, state-based models of democracy, the world may be vulnerable to a global totalitarian [centralization].[90]

The totalitarian project is truly a transnational project; it is not merely confined to one or a few nations, but is a project of western society. So while the west rapidly expands their imperial adventures in the ‘global south’ – Africa, Latin America, South and Central Asia – at home the governments of the established western democracies are throwing the notion of democracy overboard and are constructing powerful and pervasive ‘Homeland Security States’. The construction of a ‘Homeland Security State’ is no more about the protection of its citizens than the Gestapo was; it is about the control of their citizens.

The global economic crisis is central to this process of rapid state reformation and the transnationalization of tyranny. Economic collapse and civil unrest are key facets of a changing socio-political economic system, of a move from democracy to despotism. When an economy collapses, the governments throw away their public obligations, and act in the interests of their private owners. Governments will come to the aid of the powerful banks and corporations, not the people, as “The bourgeoisie resorts to fascism less in response to disturbances in the street than in response to disturbances in their own economic system.”[91] During a large economic crisis:

[The state] rescues business enterprises on the brink of bankruptcy, forcing the masses to foot the bill. Such enterprises are kept alive with subsidies, tax exemptions, orders for public works and armaments. In short, the state thrusts itself into the breach left by the vanishing private customers. [. . . ] Such maneuvers are difficult under a democratic regime [because people still] have some means of defense [and are] still capable of setting some limit to the insatiable demands of the money power. [In] certain countries and under certain conditions, the bourgeoisie throws its traditional democracy overboard.[92]

The 2008 National Intelligence Council trend report, Global Trends 2025, discussed the decline of democracy in the world as a major trend in the next few decades:

[Advances in democracy] are likely to slow and globalization will subject many recently democratized countries to increasing social and economic pressures that could undermine liberal institutions. [. . . ] The better economic performance of many authoritarian governments could sow doubts among some about democracy as the best form of government.

[. . . ] Even in many well-established democracies [i.e., the West], surveys show growing frustration with the current workings of democratic government and questioning among elites over the ability of democratic governments to take the bold actions necessary to deal rapidly and effectively with the growing number of transnational challenges.[93]

In Conclusion

As the world collapses into a global debt crisis, countries will undertake fiscal austerity measures that will radically increase taxes and reduce social spending. The result, as analyzed in earlier parts of this series, will be the eradication of the middle class and rapid expansion of poverty and growth of the lower, labour class. Students and members of the middle and lower classes will be in the streets protesting, rioting, rebelling, and the threat of revolution will grow.

As I analyzed in Part 2 of this series, “Western Civilization and the Economic Crisis: The Impoverishment of the Middle Class,” the eradication of the middle class has been a long-term process, and so too has the process of constructing a Homeland Security State. As people fall into social despair, governments will resort to political despotism. The Homeland Security State is designed to control populations and protect the power of the political and economic elite. If the elites do not construct a pervasive police state, the people might take over the social, political and economic levers of power and reconstruct a new social system. Therefore, the elites must “do away” with democracy in order to protect their own positions of power.

The construction of a pervasive and powerful Homeland Security State is not simply about the structures of surveillance. The emergence of a Homeland Security State will be marked by a new totalitarianism – not quite fascism and not quite communism – but a new system entirely: it’s not Germany in the Second World War, this is 1984. With that, the state apparatus will become incredibly oppressive and brutal force will likely be employed in order to induce submission to the state. The militarization of society is a central facet in this. This will be the subject of the next part in this series, “When Empire Hits Home,” with a focus on the evolution of a military form of governance in the west, construction of dictatorial and totalitarian societies, the prospects of martial law, and the structures of state oppression, including the use of “detention camps” to imprison “uncooperative” elements of the population.

While this essay focused on the prevalence and evolution of a police state surveillance society in the west, the next part focuses on the militarization of society itself: the descent into dictatorship and despotism. This is the price that is paid for empire. Too long have the people of the west been acquiescent to and ignorant of the rabid imperialism of our nations, the incessant and endless spreading of despotism, poverty, exploitation and death around the world.

Zbigniew Brzezinski, one of the top American imperial strategists in recent history, wrote “The Grand Chessboard”, which was a blueprint for an American empire to control the world. In it, he wrote, “Democracy is inimical to imperial mobilization.”[94] In other words, America is and must continue to be an empire, but imperialism and democracy cannot prosper together; it is one or the other. The elites of the west have chosen empire over democracy.

So far, this series has covered the relationship between war, poverty, and race, as well as the eradication of the middle classes, the potential for people to resist this process by rioting, rebelling or revolution, and the construction of Homeland Security States to monitor, track and control populations in an age of dying democracy. We cannot ignore the relationships between our own societies and what our societies do to people around the world. This is the nature of empire and the price of power.

In order to construct a world which is sustainable and prosperous for all of it’s people, where freedom reins and power is held by all, we cannot afford to ignore the processes that have brought us to this desperate state. What is most evident in the enterprise of empire is the greatest of human weakness: power. Universal equality and freedom for all peoples – not under a global socialist state, but under whatever local systems people choose for themselves – is the only way forward: the struggle of freedom for one is the struggle of freedom for all. Empire is poison and freedom is the antidote, but only if it is freedom for all.

2012-02-03T11:48:00.000-07:00

Ron Paul and His Enemies

2012-02-03T11:39:00.005-07:00

An effective antiwar candidate is what the neocons fear most.

By Scott McConnell |
After a strong second-place showing in the New Hampshire primary, Ron Paul stood before a young and giddy crowd of supporters. In a near giggle, he spoke of the many detractors who had called his campaign “dangerous.” Paul reveled in their fear. To cheers, he exclaimed, “We are dangerous to the status quo in this country.” The candidate was right about that, if not necessarily in the way he most wanted.

What is it about Paul’s success that frightens his opponents? Not fear that Paul will win the presidency, though polls show him running strongly against Obama. Unlike his rivals, Paul hardly pretends the White House is a goal. On the stump he emphasizes the goal of building the cause of liberty. Libertarian ideas in domestic policy have had a secure place in the GOP for more than a generation, though Paul has widened the channels for their discussion. Yet when Paul began to rise in the pre-caucus Iowa polls—by mid-December, it seemed possible he would win the state—a shudder of panic ran through the neoconservative commentariat. What drove it? The answer had little to do with the cause dearest to Ron Paul.
A week before New Hampshire, after placing third in Iowa, Paul thanked his backers and referred to Nixon’s famous “We are all Keynesians now” statement. He asked whether people would soon be saying, “We are all Austrians now.” What tiny fraction of the national television audience, some seeing Ron Paul for the first time, had any idea what he was talking about?
Ron Paul was a student at Duke University’s medical school when he first read Friedrich Hayek’s The Road to Serfdom, a classic argument for laissez-faire capitalism. The book propelled Paul into study of “the Austrians,” especially the work of Hayek’s mentor Ludwig von Mises. In 1971, after serving as an Air Force surgeon, Paul was practicing obstetrics outside Houston when he drove to hear a lecture by the 80-year-old Mises, who had found refuge here from Nazism in 1940. Shortly thereafter, Richard Nixon closed the gold window and imposed wage and price controls, and Ron Paul decided that someone—himself, actually—needed to bring Mises’s understanding of sound money and free markets to a larger American audience. In his first congressional campaign, a 1974 losing effort, he ran on a platform of “Freedom, Honesty, and Sound Money”; Paul thereafter began his secondary career as an author and publisher of economic newsletters spreading the Austrian message.
Once elected to Congress in 1976, Paul gained renown as an uncompromising “Dr. No” who refused to vote for any federal program not explicitly sanctioned by the Constitution. Admired for his integrity—and in recent years, for his antiwar stands—his passion for sound money was more respected than influential. But the bursting of the housing bubble in 2008 multiplied the audience for systematic critiques of the financial system. Since 2002, Paul had given repeated warnings that Freddie Mac and Fannie Mae, by soaking up unsound money injected into the economy by the Federal Reserve, were preparing an economic calamity that would strip homeowners of their savings and ruin banks. His warnings proved prophetic, and as they were replayed on cable news, Paul gained new stature within the GOP. In 2009, The Atlantic called him the Tea Party’s “Marx and Madison,” an exaggeration but far from a falsehood.
Important as Paul’s bubble warnings were, sound-money doctrine by itself would not have enabled him to build the movement he now leads. Virtually alone among prominent Republicans, Paul opposed the Iraq War, and alone among the current presidential candidates, he stands against sanctions and military threats against Iran. He has long opposed all foreign aid, a position with important implications for the special relationship with Israel, in per capita terms by far the most favored recipient of Washington’s largesse.
Paul’s foreign-affairs perspective is completely different from the prevailing Republican norm. The Texas congressman avoids heavy breathing about American exceptionalism and expresses little interest in giving orders to the rest of the world. He frequently seeks to understand global issues from other nations’ points of view. He has noted that Iran is surrounded by hostile powers, some of them armed with nuclear weapons, and has seen Iraq invaded and destroyed in the name of democracy. He finds Iran’s quest for nuclear weapons, under such circumstances, natural. A Paul-associated PAC has produced a viscerally heart-pounding ad asking how Texans would respond to Russian and Chinese troops occupying their territory—a question that informs Paul’s perspective on Iraq and Afghanistan.
He is simply different from the others. As Andrew Sullivan wrote before the Iowa caucuses: “Paul is the only candidate we can be sure will not take us into a third war with a Muslim country in a decade. And he seems to believe this is a strength. No wonder Washington is still scratching its collective head.”
How marginal are such positions within the Republican Party? A mid-December Washington Post-ABC poll reported that 29 percent of Republicans and GOP-leaning independents considered Paul’s noninterventionism a good reason to support him. That is smaller than the 45 percent who for whom Paul’s dovishness was a turnoff, but it is hardly negligible—nearly a third of the right-most half of the electorate, a group of millions that can claim no prominent leaders in Congress, no regular newspaper columnists to shape and focus its thinking, no significant representation on the cable news shows to validate and amplify its ideas.
What might happen if this group found a political voice? More than any other factor, this question accounts for the vehemence of the attacks on Ron Paul. His opponents were not afraid that the 76-year-old maverick would storm his way to the nomination, nor that Paulism would restore the gold standard or end the Federal Reserve. But they quite rightly feared that Paul’s foreign-policy ideas could find fertile ground in the electorate and lay the seeds for more forceful and majoritarian representation within the GOP and the larger conservative movement.
When December polls showed Paul moving into the lead in Iowa, the knives came out. The fear, as the American Spectator’s Phil Klein put it, was that a good Paul showing would “help mainstream his noxious foreign policy views—particularly on Israel.” Republicans, added Commentary’s Alana Goodman, needed to be wary of the idea that Paul’s “unforgivable flaws—the bigotry-laced newsletters he published for years, his dangerous foreign policy positions—are somehow more acceptable than Gingrich’s and Romney’s faults.”
Here the reprise of the story of the newsletters published under Ron Paul’s name 20 years ago proved critical. The New Republic had made a national story of them early in the 2008 campaign. James Kirchick reported that numerous issues of the “Ron Paul Political Report” and the “Ron Paul Survival Report” contained passages that could be fairly characterized as race-baiting or paranoid conspiracy-mongering. (Few in Texas had cared very much when one of Paul’s congressional opponents tried to make an issue of the newsletters in 1996.). With Paul rising in the polls, the Weekly Standard essentially republished Kirchik’s 2008 piece.
I’ve seen no serious challenge to the reporting done four years ago by David Weigel and Julian Sanchez for Reason: the newsletters were the project of the late Murray Rothbard and Paul’s longtime aide Lew Rockwell, who has denied authorship. Rothbard, who died in 1995, was a brilliant libertarian author and activist, William F. Buckley’s tutor for the economics passages of Up From Liberalism, and a man who pursued a lifelong mission to spread libertarian ideas beyond a quirky quadrant of the intelligentsia. He had led libertarian overtures to the New Left in the 1960s. In 1990, he argued for outreach to the redneck right, and the Ron Paul newsletters became the chosen vehicle. For his part, Rockwell has moved on from this kind of thing.
Intellectual honesty requires acknowledging that much of the racism in the newsletters would have appeared less over the top in mainstream conservative circles at the time than it does now. No one at the New York Post editorial page (where I worked) would have been offended by the newsletters’ use of welfare stereotypes to mock the Los Angeles rioters, or by their taking note that a gang of black teenagers were sticking white women with needles or pins in the streets of Manhattan. (Contrary to the fears of the time, the pins used in these assaults were not HIV-infected.) But racial tensions and fissures in the early 1990s were far more raw than today. The Rockwell-Rothbard team were, in effect, trying to play Lee Atwater for the libertarians. A generation later, their efforts look pretty ugly.
The resurfacing of the newsletter story in December froze Paul’s upward movement in the polls. For the critical week before the Iowa caucuses, no Ron Paul national TV interview was complete without newsletter questions, deemed more important than the candidate’s opposition to indefinite detention, the Fed, or a new war in Iran. On stage in the New Hampshire debate, Paul forcefully disavowed writing the newsletters or agreeing with their sentiments, as he had on dozens of prior occasions, and changed the subject to a spirited denunciation of the drug laws for their implicit racism. This of course did not explain the newsletters, but the response rang true on an emotional level, if only because no one who had observed Ron Paul in public life over the past 15 years could perceive him as any kind of racist.
If the Weekly Standard editors hoped the flap would stir an anti-Paul storm in the black community, they were sorely disappointed. In one telling Bloggingheads.tv dialogue, two important black intellectuals, Glenn Loury and John McWhorter, showed far more interest in Paul’s foreign-policy ideas, and the attempts to stamp them out, than they did in the old documents. Atlantic blogger Ta-Nehisi Coates likened Paul to Louis Farrakhan. He didn’t mean it as a compliment, but the portrait fell well short of total scorn. It was difficult to ignore that the main promoters of the newsletters story, The New Republic and the Weekly Standard, had historically devoted exponentially more energy to promoting neoconservative policies in the Middle East than they had to chastising politicians for racism.
Thus the newsletters could only serve as a kind of prelude; the main insults would be on the grounds of foreign policy. The Republican Jewish Coalition excluded Paul from its Dec. 7 debate because he was “so far outside the mainstream of the Republican Party.” Paul made the Washington Post’s Richard Cohen (a liberal, except where the Mideast is concerned) think of Hitler’s conquest of Europe. Washington Post columnist Marc Thiessen called Paul’s positions not conservative, not libertarian, but “nutty.” Also at the Post, blogger Jennifer Rubin asked Iowa’s governor to make an “Anybody but Ron Paul” endorsement, and columnist Michael Gerson accused Paul of seeking to “erase 158 years of Republican Party history.”
The barrage continued across the neocon blogosphere. Michael Medved labeled Paul “Dr. Demento” with “eccentric and detestable views.” David Frum smeared Paul with a photo of David Duke, whom he depicted as representing Ron Paul’s “base.” Gary Bauer, an evangelical accessory to Bill Kristol’s war-promoting Project for a New American Century efforts, cut a commercial for use in South Carolina attacking Paul as “hostile to our ally Israel” and “not a Reagan Republican.” (An interesting sidelight to Paul’s career is that he was one of a handful of Texas officials to endorse Ronald Reagan in 1976 and headed the Texas for Reagan delegation at the ’76 convention. When in the 1980s he faced a right-wing primary challenge for being insufficiently hawkish, Reagan taped a rousing Ron Paul endorsement.)
Yet the insults were never directed at the issues at the heart of Paul’s career: support for sound money, opposition to the Federal Reserve, objection to the growth of the federal government on constitutional grounds. This reflected a reasonable assessment of where Ron Paul might make the greatest difference. Whether or not eliminating the Federal Reserve is a good idea, it is considered far-fetched among economists left, right, and center and is unlikely to be on the national agenda very soon.
Foreign policy is a different matter. Paul’s skepticism about American military interventionism—the Iraq War, the Afghan War, the war Israel and the neocons are trying get America to fight with Iran—resonates far more among foreign-affairs specialists, the military, the intelligence community, and the Republican rank and file. Paul’s campaign has the potential to begin bringing that skepticism into the inner reaches of the GOP—where the interlocking web of big donors and neoconservative-run think tanks and media have managed to keep the doves, realists, and other skeptics at bay.
This may be recorded as neoconservatism’s most singular achievement: to have their disastrous strategies enacted in Iraq, see them thoroughly discredited, and yet nonetheless retain their spots as the Beltway arbiters of “responsible” conservative opinion, with the power to exclude those who dissent. But the neoconservatives understand better than anyone how tenuous is this hold on the Washington discourse, how necessary it is to crush dissident movements before they can grow beyond the cradle. Thus a septuagenarian congressman who is an outlier in his own party must be treated as a mortal threat, his ideas not debated or refuted, but obliterated, presented as so far beyond the pale that no sane person could entertain them.
By the night of the New Hampshire primary, it was clear that Ron Paul had torn a hole in the matrix. On top of his third place in Iowa, where he doubled his 2008 vote percentage, Paul had finished a strong second in New Hampshire, tripling his share from four years earlier. In both contests, Paul won the under-30 vote going away and scored better with independents than any of his rivals. The congressman was the only Republican connecting with young people and bringing new voters into the GOP. While it is surely too soon to speak authoritatively about “Ron Paul Republicans,” as we do about Reagan Democrats or evangelicals, such a voting bloc appears to exist. Whether they become part of the GOP coalition is critical to the party’s future. If, as the Economist suggested, they came for the anti-imperialism and civil liberties and grew interested in the fiscal and monetary package, that would be telling as well. When in Iowa and New Hampshire a young crowd cheered a liberty-based campaign with chants of “Bring them home,” it was hard to imagine more full frontal repudiation of the Bush/Cheney vision of the party.
After New Hampshire one could see the wheels of the establishment begin to recalibrate. Paul now seemed likely stay in the race for the duration and might arrive at the Tampa convention with a horde of delegates. GOP politicos began to muse over about how he might be accommodated. It was possible to imagine a Paul prime-time convention speech, but only, said David Frum, if it was subject to Romney pre-approval. (Frum might hope it focuses on Paul’s gold coin collection.) Commentary’s James Tobin, dipping into the favorite neocon trope, warned that Ron Paul could not be “appeased.” Paul has denied any interest in a third-party bid. But while the Republican Party could easily find a way to make rhetorical and platform concessions to the economic parts of Paul’s agenda, a potent “bring them home” foreign-policy movement cannot long coexist alongside the GOP’s regnant neoconservatism. What Paul’s enemies fear is that his early success may herald the beginning of the end of their own dominance. About this, at least, they are entirely correct.

Ron Paul: Equal Rights for Each Individual!

2012-02-03T11:37:00.000-07:00

911 was An ISRAELI ZIONIST FALSE FLAG ATTACK, Ken O'keefe.

2012-02-03T11:35:00.000-07:00

The Problem of Economic Calculation. Mises Daily: Ludwig von Mises

2012-02-03T11:23:00.001-07:00

Since recent events helped socialist parties to obtain power in Russia, Hungary, Germany and Austria, and have thus made the execution of a socialist nationalization program a topical issue, Marxist writers have themselves begun to deal more closely with the problems of the regulation of the socialist commonwealth. But even now they still cautiously avoid the crucial question, leaving it to be tackled by the despised "Utopians." They themselves prefer to confine their attention to what is to be done in the immediate future; they are forever drawing up programs of the path to Socialism and not of Socialism itself. The only possible conclusion from all these writings is that they are not even conscious of the larger problem of economic calculation in a socialist society.

To Otto Bauer the nationalization of the banks appears the final and decisive step in the carrying through of the socialist nationalization program. If all banks are nationalized and amalgamated into a single central bank, then its administrative board becomes

the supreme economic authority, the chief administrative organ of the whole economy. Only by nationalization of the banks does society obtain the power to regulate its labor according to a plan, and to distribute its resources rationally among the various branches of production, so as to adapt them to the nation's needs.[1]

Bauer is not discussing the monetary arrangements which will prevail in the socialist commonwealth after the completion of the nationalization of the banks. Like other Marxists he is trying to show how simply and obviously the future socialist order of society will evolve from the conditions prevailing in a developed capitalist economy. "It suffices to transfer to the nation's representatives the power now exercised by bank shareholders through the Administrative Boards they elect,"[2] in order to socialize the banks and thus to lay the last brick on the edifice of socialism. Bauer leaves his readers completely ignorant of the fact that the nature of the banks is entirely changed in the process of nationalization and amalgamation into one central bank. Once the banks merge into a single bank, their essence is wholly transformed; they are then in a position to issue credit without any limitation. In this fashion the monetary system as we know it today disappears of itself.
When in addition the single central bank is nationalized in a society, which is otherwise already completely socialized, market dealings disappear and all exchange transactions are abolished. At the same time the Bank ceases to be a bank, its specific functions are extinguished, for there is no longer any place for it in such a society. It may be that the name "Bank" is retained, that the Supreme Economic Council of the socialist community is called the Board of Directors of the Bank, and that they hold their meetings in a building formerly occupied by a bank. But it is no longer a bank; it fulfills none of those functions which a bank fulfills in an economic system resting on the private ownership of the means of production and the use of a general medium of exchange-money. It no longer distributes any credit, for a socialist society makes credit of necessity impossible. Bauer himself does not tell us what a bank is, but he begins his chapter on the nationalization of the banks with the sentence: "All disposable capital flows into a common pool in the banks."[3] As a Marxist must he not raise the question of what the banks' activities will be after the abolition of capitalism?
All other writers who have grappled with the problems of the organization of the socialist commonwealth are guilty of similar confusions. They do not realize that the bases of economic calculation are removed by the exclusion of exchange and the pricing mechanism, and that something must be substituted in its place, if all economy is not to be abolished and a hopeless chaos is not to result. People believe that socialist institutions might evolve without further ado from those of a capitalist economy. This is not at all the case. And it becomes all the more grotesque when we talk of banks, banks management, etc. in a socialist commonwealth.
Reference to the conditions that have developed in Russia and Hungary under Soviet rule proves nothing. What we have there is nothing but a picture of the destruction of an existing order of social production, for which a closed peasant household economy has been substituted. All branches of production depending on social division of labor are in a state of entire dissolution. What is happening under the rule of Lenin and Trotsky is merely destruction and annihilation. Whether, as the liberals hold, socialism must inevitably draw these consequences in its train, or whether, as the socialists retort, this is only a result of the fact that the Soviet Republic is attacked from without, is a question of no interest to us in this context. All that has to be established is the fact that the Soviet socialist commonwealth has not even begun to discuss the problem of economic calculation, nor has it any cause to do so. For where things are still produced for the market in Soviet Russia in spite of governmental prohibitions, they are valued in terms of money, for there exists to that extent private ownership of the means of production, and goods are sold against money. Even the government cannot deny the necessity, which it confirms by increasing the amount of money in circulation, of retaining a monetary system for at least the transition period.
That the essence of the problem to be faced has not yet come to light in Soviet Russia, Lenin's statements in his essay on Die nächsten Aufgaben der Sowjetmacht best show. In the dictator's deliberations there ever recurs the thought that the immediate and most pressing task of Russian communism is "the organization of bookkeeping and control of those concerns, in which the capitalists have already been expropriated, and of all other economic concerns."[4] Even so Lenin is far from realizing that an entirely new problem is here involved which it is impossible to solve with the conceptual instruments of "bourgeois" culture. Like a real politician, he does not bother with issues beyond his nose. He still finds himself surrounded by monetary transactions, and does not notice that with progressive socialization money also necessarily loses its function as the medium of exchange in general use, to the extent that private property and with it exchange disappear.
The implication of Lenin's reflections is that he would like to reintroduce into Soviet business "bourgeois" bookkeeping carried on on a monetary basis. Therefore he also desires to restore "bourgeois experts" to a state of grace.[5] For the rest Lenin is as little aware as Bauer of the fact that in a socialist commonwealth the functions of the bank are unthinkable in their existing sense. He wishes to go farther with the "nationalization of the banks" and to proceed "to a transformation of the banks into the nodal point of social bookkeeping under socialism."[6]
Lenin's ideas on the socialist economic system, to which he is striving to lead his people, are generally obscure.
"The socialist state," he says,

can only arise as a net of producing and consuming communes, which conscientiously record their production and consumption, go about their labour economically, uninterruptedly raise their labour productivity and thus attain the possibility of lowering the working day to seven or six hours or even lower.[7]
Every factor, every village appears as a production and consumption commune having the right and obligation to apply the general Soviet legislation in its own way ('in its own way' not in the sense of its violation but in the sense of the variety of its forms of realisation), and to solve in its own way the problems of calculating the production and distribution of products.[8]

"The chief communes must and will serve the most backward ones as educators, teachers, and stimulating leaders." The successes of the chief communes must be broadcast in all their details in order to provide a good example. The communes "showing good business results" should be immediately rewarded "by a curtailment of the working day and with an increase in wages, and by allowing more attention to be paid to cultural and aesthetic goods and values."[9]
We can infer that Lenin's ideal is a state of society in which the means of production are not the property of a few districts, municipalities, or even of the workers in the concern, but of the whole community. His ideal is socialist and not syndicalist. This need not be specially stressed for a Marxist such as Lenin. It is not extraordinary of Lenin the theorist, but of Lenin the statesman, who is the leader of the syndicalist and small-holding peasant Russian revolution. However, at the moment we are engaged with the writer Lenin and may consider his ideals separately, without letting ourselves be disturbed by the picture of sober reality.

According to Lenin the theorist, every large agricultural and industrial concern is a member of the great commonwealth of labor. Those who are active in this commonwealth have the right of self-government; they exercise a profound influence on the direction of production and again on the distribution of the goods they are assigned for consumption. Still, labor is the property of the whole society, and as its product belongs to society also, it therefore disposes of its distribution. How, we must now ask, is calculation in the economy carried on in a socialist commonwealth which is so organized? Lenin gives us a most inadequate answer by referring us back to statistics. We must bring statistics to the masses, make it popular, so that the active population will gradually learn by themselves to understand and realize how much and what kind of work must be done, how much and what kind of recreation should be taken, so that the comparison of the economy's industrial results in the case of individual communes becomes the object of general interest and education.[10]
From these scanty allusions it is impossible to infer what Lenin understands by statistics and whether he is thinking of monetary or in natura computation. In any case, we must refer back to what we have said about the impossibility of learning the money prices of production-goods in a socialist commonwealth and about the difficulties standing in the way of in natura valuation. Statistics would only be applicable to economic calculation if it could go beyond the in natura calculation, whose ill-suitedness for this purpose we have demonstrated. It is naturally impossible where no exchange relations are formed between goods in the process of trade.

The Justice of Economic Efficiency Mises Daily: by Hans-Hermann Hoppe

2012-02-03T11:18:00.001-07:00

The central problem of political economy is how to organize society so as to promote the production of wealth. The central problem of political philosophy is how to arrange society so as to make it a just social order.
The first question regards matters of efficiency: What means are appropriate for achieving a specific result, in this case, wealth?
The second question falls outside the realm of the so-called positive sciences. It asks whether or not the goal political economy assumes to be given can be justified as a goal, and whether or not, then, the means which political economy recommends can be regarded as efficient means for just ends.
In the following I present an a priori justification for the thesis that those means recommended by political economy are indeed efficient means for just ends.

I begin by describing the means recommended by political economy and explain the systematic reasons the production of wealth attained by adopting them is greater than that produced by choosing any other means. Since my main task is to demonstrate the justice of these means of producing wealth, my description and explanation of economic efficiency will be brief.
Political economy begins with the recognition of scarcity. It is only because we do not live in the Garden of Eden that we are concerned about the problem of economic efficiency. According to political economy, the most efficient means of alleviating, if not overcoming, scarcity is the institution of private property. The rules underlying this institution have been correctly identified for the most part by John Locke. They are as follows:
Every person owns his own body as well as all scarce goods which he puts to use with the help of his body before anyone else does. This ownership implies the right to employ these scarce goods however one sees fit so long as in so doing one does not aggress against anyone else's property, i.e., so long as one does not uninvitedly change the physical integrity of another's property or delimit another's control over it without his consent. In particular, once a good has first been appropriated or homesteaded by mixing one's labor with it (Locke's phrase) then ownership in it can only be acquired by means of a contractual transfer of property title from a previous to a later owner.
The reason this institution leads to the greatest possible production of wealth is straightforward. Any deviation from this set of rules implies, by definition, a redistribution of property titles (and hence of income) away from user-producers and contractors of goods and onto non-user-producers and noncontractors. As a consequence, any such deviation implies that there will be relatively less original appropriation of resources whose scarcity is realized, there will be less production of new goods, less maintenance of existing goods, and less mutually beneficial contracting and trading. This naturally implies a lower standard of living in terms of exchangeable goods and services.
Further, the provision that only the first user (not a later one) of a good acquires ownership assures that productive efforts will be as high as possible at all times. Further, the provision that only the physical integrity of property (not property values) be protected guarantees that every owner will undertake the greatest possible value-productive efforts, i.e., efforts to promote favorable changes in property values and to prevent or counter any unfavorable changes in property values (as they might result from another person's actions regarding his property). Thus, any deviation from these rules also implies reduced levels of value productive efforts at all times.
Now on to my main task of demonstrating that the institution of private property as just characterized is just — in fact, that only this institution is just and that any deviation from it is not only economically inefficient but unethical as well.
First, however, let me clarify an essential similarity between the problem facing political economy and that facing political philosophy — a similarity that political philosophers in their widespread ignorance of economics generally overlook only to wind up in endless ad hoceries. The recognition of scarcity is not only the starting point for political economy; it is the starting point of political philosophy as well. Obviously, if there were a superabundance of goods, no economic problem whatsoever would exist. With a superabundance of goods such that my present use of them would neither reduce my own future supply nor the present or future supply of them for any other person, ethical problems of right or wrong, just or unjust would not emerge either since no conflict over the use of such goods could possibly arise. Only insofar as goods are scarce are economics and ethics required.
In the same way, just as the answer to the problem of political economy must be formulated in terms of rules constraining the possible uses of resources qua scarce resources, political philosophy too must answer in terms of property rights. In order to avoid inescapable conflicts, it must formulate a set of rules assigning rights of exclusive control over scarce goods. (Note that even in the Garden of Eden, a person's body, the space occupied by that body, and time would still be scarce and to that extent political economy and philosophy would still have a task, however limited, to fulfill.)
Now to the actual proof of the thesis that out of the infinitely conceivable ways of assigning rights of exclusive ownership to people, only the previously described rules of private property are actually justifiable. I will present my argument in a step-by-step fashion.
First, while scarcity is a necessary condition for the emergence of the problem of political philosophy, it is not sufficient. For obviously we could have conflicts regarding the use of scarce resources with, let us say, an elephant or a mosquito, yet we would not consider it possible to resolve these conflicts by means of proposing property norms. In such cases, the avoidance of possible conflicts is merely a technological, not an ethical, problem. For it to become an ethical problem, it is also necessary that the conflicting actors be capable, in principle, of argumentation. In fact, this is undeniably so because we are also engaged in argumentation here. Denying that political philosophy presupposes argumentation is contradictory, as the very denial would itself be an argument.
Only with argumentation does the idea of validity and truth emerge and by no means only the idea of truth in ethical matters but of truth in general. Only within argumentation are truth claims of any kind made, and it is only in the course of argumentation that truth claims are decided. This proposition, it turns out, is itself undeniably true: one cannot argue that one cannot argue, and one cannot dispute knowing what it means to make a truth claim without implicitly claiming at least the very negation of this proposition to be true. My very first step in the following chain of reasoning, then, has been called "the a priori of argumentation" by such philosophers as Jürgen Habermas and K.O. Apel.[1]
In the same way as it is undeniably true that ethics requires argumentation, it is also undeniably true that any argument requires an arguing person. Arguing does not consist of free-floating propositions. It is an activity. If aside from whatever is said in its course, however, argumentation is also a practical affair and if argumentation is the presupposition of truth-claiming and possibly true propositions, then it follows that intersubjectively meaningful norms must exist — namely those which make an action argumentation — which must have a special cognitive status in that they are the practical preconditions of truth. Once more, this is true a priori, so that anyone, such as an empiricist-positivist-emotivist who denied the possibility of a rational ethics and who declared the acceptance or rejection of norms an arbitrary affair would invariably get caught in a practical contradiction. For contrary to what he would say, he would in fact have to presuppose the norms which underlie any argumentation whatsoever as valid simply in order to say anything at all.
With this step I lose, once and for all, the company of philosophers like Habermas and Apel. [2] Yet, as will become clear immediately, it is directly implied in the previous step. That Habermas and Apel are unable to take this step is, I submit, due to the fact that they, too, suffer, as do many other philosophers, from a complete ignorance of economics, and a corresponding blindness towards the fact of scarcity. The step is simply this: To recognize that argumentation is a form of action and does not consist of free-floating sounds implies the recognition of the fact that all argumentation requires that a person have exclusive control over the scarce resource of his body. As long as there is argumentation, there is mutual recognition of each other's property right in his own body. It is this recognition of each other's exclusive control over one's own body, presupposed by all argumentation, which explains the unique feature of verbal communication that while one may disagree about what has been said, it is still possible to agree at least on the fact that there is such disagreement.
Again, such a property right in one's own body must be said to be justified a priori, for anyone who would try to justify any norm whatsoever would already have to presuppose the exclusive right to control over his body as a valid norm simply in order to say, "I propose such and such." Further, any person who tried to dispute the property right in his body would become caught up in a practical contradiction since arguing in this way would already imply acceptance of the very norm which he was disputing. He would not even open his mouth if he were right.
The final argument extends the idea of private property as justified, and justified a priori, from the very prototype of a scarce good (a person's body) to other goods. It consists of two parts. I first demonstrate that argumentation, and argumentative justification of anything, presupposes not only the right to exclusively control one's body but the right to control other scarce goods as well, for if no one had the right to control anything except his own body, then we would all cease to exist and the problem of justifying norms — as well as all other human problems — simply would not exist. We do not live on air alone; hence, simply by virtue of the fact of being alive, property rights to other things must be presupposed to be valid, too. No one who is alive could argue otherwise.
The second part of the argument demonstrates that only the Lockean idea of establishing property claims through homesteading is a just principle of property acquisition. The proof employs a simple argumentum e contrario: If a person did not acquire the right of exclusive control over other, nature-given goods by his own work, that is, if other people, who had not previously used such goods, had the right to dispute the homesteader's ownership claim, then this would only be possible if one would acquire property titles not through labor, i.e., by establishing some objective link between a particular person and a particular scarce resource, but simply by means of verbal declaration.
This solution — apart from the obvious fact that it would not even qualify as a solution in a purely technical sense in that it would not provide a basis for deciding between rivaling declarative claims — is incompatible with the already justified ownership of a person over his body. For if one could indeed appropriate property by decree, this would imply that it would also be possible for one to simply declare another person's body to be one's own. However, as we have seen, to say that property is acquired not through homesteading action but through declaration involves a practical contradiction: nobody can say and declare anything, unless his right to use his body is already assumed to be valid simply because of the very fact that regardless of what he says, it is he, and nobody else, who has homesteaded it as his instrument of saying anything.
With this, my a priori justification of the institution of private property is essentially complete. Only two supplementary arguments may be needed in order to point out why and where all other ethical proposals (let me call them socialist) are argumentatively indefensible.
According to the private-property ethics, scarce resources that are under the exclusive control of their owners are defined in physical terms, and, mutatis mutandis, aggression, is defined as an invasion of the physical integrity of another person's property. As indicated, the economic effect of this provision is that of maximizing value-productive efforts. A popular deviation from this is the idea of defining aggression as an invasion of the value or psychic integrity of another person's property instead. This idea underlies John Rawls's "difference principle" that all inequalities have to be expected to be to everyone's advantage regardless of how such inequalities have come about,[3] Robert Nozick's claim that a "dominant protection agency" has the right to outlaw competitors regardless of their actual actions, and his related claim that "nonproductive exchanges" in which one party would be better off if the other one did not exist may be outlawed, again regardless of whether or not such exchange involved any physical aggression.[4]
Such proposals are absurd as well as indefensible. While every person can have control over whether or not his actions cause the physical integrity of something to change, control over whether or not one's actions affect the value of someone's property to change rests with other people and their evaluations. One would have to interrogate and come to an agreement with the entire world population to make sure that one's planned actions would not change another person's evaluations regarding his property. Everyone would be long dead before this could ever be accomplished.
Moreover, the idea that property value should be protected is argumentatively indefensible, for even in order to argue, it must be presupposed that actions must be allowed prior to any actual agreement because if they were not, one could not even argue so. Yet if one can, then this is only possible because of objective borders of property, i.e., borders which every person can recognize as such on his own, without having to agree first with anyone else with respect to one's system of values and evaluations. Rawls and Nozick could not even open their mouths if it were otherwise. The very fact, then, that they do open them proves what they say is wrong.

The second popular deviation, equally absurd and indefensible, is this: Instead of recognizing the vital importance of the prior-later distinction in deciding between conflicting property claims — as the private-property ethics does, thereby assuring value-productive efforts to be as high as possible at all times — the claim is made, in essence, that priority is irrelevant and that latecomers have rights to ownership just as first-comers do. Again, with his belief in the rights of future generations, just savings rates and such things, Rawls may be cited as an example. However, if latecomers indeed had legitimate ownership claims to things, then literally no one would be allowed to do anything with anything as one would have to have all of the latecomers' consent prior to ever doing what one wanted to do.
Neither we, nor our forefathers, nor our progeny could, do, or will survive if one followed this rule. However, in order for any person — past, present, or future — to argue anything it must evidently be possible to survive then and now. Moreover, in order to do just this — and even people behind a Rawlsian "veil of ignorance" would have to be able to survive — property rights cannot be conceived of as being timeless and nonspecific regarding the number of people concerned.
Rather, they must necessarily be thought of as originating through acting at specific points in time for specific acting individuals. Otherwise, it would be impossible for anyone to first say anything at a definite point in time and for someone else to be able to reply. Simply saying, then, that the prior-later distinction can be ignored implies a contradiction, as one's being able to say so must presuppose one's existence as an independent decision-making unit at a given point in time.
Hence, I conclude that any socialist ethic is a complete failure. Only the institution of private property, which also assures the greatest possible production of wealth, can be argumentatively justified, because it is the very precondition of argumentation.

The President Goes to War

2012-02-03T11:14:00.002-07:00

[Country Squire in the White House (1940)]

As I write this, the war in Europe has reached a critical stage for the two great empires, England and France. We know that the overwhelming conviction of the American people is that we should stay out of that war. There are some who would like to help the empires as much as possible without going to war. But they are adamant for not becoming involved.

It is very important, however, to realize the existence of various groups eager for American participation in the war, if it should become evident that our participation is essential to defeating Germany. These people constitute a small minority. They are to be found in certain groups, and everybody recognizes who they are. Some of them are intriguing actively to get us in.
In this situation what must we expect to happen when we pour a set of facts and events like this into the mind of the president? What kind of result may we expect to come out of that mind?
We have merely to remember the president's general state of mind on armaments. Of course the president, like everyone, frequently protests his desire for peace. Everyone does this. And I think we may assume he is quite sincere about it.
But we must keep in mind the president's long, constant attitude toward armaments and military training. He is a lover of arms. He is above all a lover of naval arms. He is one of those men whose mind and imagination are fascinated by battleships and guns. He is also one — as frequently happens in these lovers of arms — who is disposed to be somewhat truculent in his notion of the uses of these arms. Most Americans believe that we should have arms to defend ourselves; defending ourselves means defending our country from invasion. They do not believe that we should establish interests all over the world, follow our traders around with ships and undertake to police the seas of the world for those interests. We have warned Americans to get out of the fighting zones. We have warned our ships to leave the areas of war. We have passed a law to that effect. We have voted to give up the Philippine Islands, which every military man agrees we cannot possibly defend. But the president, whatever he may seem to feel, does not agree with these views. He said, while assistant secretary of the navy,

Our national defense must extend all over the Western Hemisphere, must go a thousand miles out to sea, must embrace the Philippines and over the seas wherever our commerce may be.… We must create a navy not only to protect our shores and our possessions but our merchant ships no matter where they may go in time of war.

This represents his ground philosophy respecting the navy. There is a touch of the Junker in him, the jingo, who, saying, "We've got the men, we've got the ships, we've got the money too," is prepared to assert a nationalist right on every sea. He is for peace as an ideal, but he is one of those lovers of peace who is too ready to choose war as a solution of the problem.
But he goes further than this. If there is one thing that the people of America hate with all their souls it is militarism. By militarism I mean that system of compulsory military training, universal military service and national armies that has made a shambles out of Europe. To escape militarism, millions of European immigrants flowed past the Statue of Liberty to America before the Great War.
Franklin D. Roosevelt is one of the few Americans who has advocated the establishment of a national army and universal military service — conscription during times of peace. During the World War he wrote,

Is it not time that the people of the United States should adopt definitively the principle of national government service by every man and woman at some time in their lives?… I hope to see the time when national government service is not only an established fact but also one of the most highly prized privileges of all Americans. I, as a father, look forward to the time when my boys will be able to render service to their country. This means service in times of peace as well as in times of war and means service in the civilian branches as well as the military branches. The day will soon be at hand when the army and the navy of this great republic will be looked upon by its citizens as a normal part of their own government and their own activities.

Because this was written during the war, it may be put down to an excess of patriotic zeal, though he was urging military service in times of peace. However, when the war was over, at a Victory Dinner in 1919, he said,

While a let-down was bound to follow every great national action, I hope that there will still be some kind of training or universal military service. That is the surest guarantee of safety. I think this ought to follow no matter what the result of the peace negotiations.

This after Germany was crushed and at a Victory Dinner after the war to end wars. He was busy trying to organize a naval reserve of 150,000 men all that year. On October 11, 1919, he again proposed universal military training in the army and navy at the New York State Convention of the American Legion.
The simple truth is — though Americans have not realized it — that we have a militarist in the White House who would, if he dared propose it, establish an army, with peacetime conscription, on the European model. And we must be aware of and weigh these facts about him properly before we can understand what the conflict in Europe is doing as it races through his mind.
There is another factor of the first importance — the foundation of the president's whole regime, his spending. At the end of seven years there are still 11 million people idle, and the revival of private investment is as distant as it was in 1933. Suspension, even contraction, of government spending would be followed by an immediate economic disaster while Roosevelt is president.
But national spending becomes increasingly difficult. Because of the very nature of our government, useful peacetime projects are essentially local in character — roads, parkways, playgrounds, schools, hospitals, clinics, housing, etc. The federal government may build them, but they have to be maintained by the local governments. Today the local governments refuse these kinds of projects. It is costing so much money to maintain those already built that the local governments are at the end of their rope. Most of them are in grave financial difficulties, cannot meet their school budgets, their welfare and highway budgets — are all wrestling painfully with the baffling problem of taxes. The WPA in Philadelphia complains that it has projects that would put 39,000 men to work immediately but that the city of Philadelphia fails to authorize or sponsor these projects. It is the same in most cities and states. Governments that spend soon arrive at a point where resistance to spending becomes imperious. The resistance comes from the conservative groups who fear taxation and inflation, but it comes also from the very difficulty of finding peacetime public enterprises on which money can be spent. That is where the Roosevelt administration is today.
When this point is reached in spending programs, there is always one kind of project left that breaks down resistance — which particularly breaks down resistance among the very conservative groups who are most vocal against government spending. That is national defense. The one sure and easiest way to command national assent from all groups for more spending is to ask it for national defense. The evidence of this is that the Congress and the nation that was howling for economy only six months ago is now talking about military budgets of monstrous dimensions. And the president of the United States can say without a whimper of protest that the manner of raising money for a 7-billion-dollar airplane program is a mere "minor detail."
However, it is not possible to get the people to consent to vast outlays for national defense unless you frighten them, make them fear that enemies are about to assail them, and this is what has now happened.
Put all of these things together — the president's love of military and naval might and display, his truculence about the command of the seas, his well-known sympathies both by blood and sentiment with England, his belief in the doctrine of collective security, his dilemma in finding means to spend money and ways of holding popular approval of spending, the rising tide of political antagonism that was generally recognized before the war began — and you have the conditions that set his mind off in the direction of military adventure.
He has been playing with this subject ever since October 1937, when the severe recession got under way. He, his State Department, his military subordinates are continuously doing and saying things of a provocative character. On October 11, 1937, before Roosevelt made his quarantine speech, he called in his admirals and asked their advice for an economic blockade of Japan in co-operation with European powers. The British shied away from this. The American people knew nothing about it. Then came the quarantine speech in which he advocated international action to quarantine aggressors. If that policy had been adopted, it would have meant that England, France, the United States and possibly Russia would have used military power to strangle Japan and Germany economically. That meant the president was actually talking about war under these euphemistic phrases.
In April 1938 Ambassador Hugh Wilson in Germany warned the Germans that it was conceivable that the United States would come into any future war, and this speech, it was reported, was approved by the State Department. About the same time Roosevelt seized two islands in the Pacific near Australia and hoisted the American flag over them. In May 1938 England and Italy proposed a pact dividing up the Mediterranean and Red Sea between them, and the president issued a statement approving this pact. Later in May, Secretary of War Woodring made a speech denouncing the European dictators. When the gunboat Panay was struck in the interior of China on the Yangtze River protecting three Standard Oil tankers, the most frantic efforts were made to inflame the imagination of the American people against the Japanese. This was done this time, not by Mr Hearst or the yellow newspapers, but by the State Department.
Then came the spy scares. These spy stories were not given out by subordinates but by the president himself in order to give them the greatest explosive propaganda effect. The attorney general of the United States was put in the movies to call on Americans to report suspicious cases — to spy upon their neighbors.
After the present war in Europe broke out, the president began personally, directly from the White House, to give out in his own name statements about submarines cruising along our coasts. All this could be multiplied many times to show the plain purpose of the president to fill the American people with a fear that this country was going to be attacked by Germany; that as soon as England and France were done for, the United States was next on the list, that Hitler and Mussolini were meditating invasions of South America. Assistant Secretary of War Johnson has been going around the country making speeches saying that we should provide arms for a million men and build the world's greatest navy to resist a German invasion of this country, while Senator Neely of West Virginia, speaking for the administration's so-called "neutrality" policy, said that as soon as Hitler defeated England and France "he would come to Canada with the French army in the English navy, build a Siegfried line along the Canadian border, organize Sudeten areas in German cities like St Louis and Milwaukee and reduce the United States to the fate of Poland."
All this is not being done by the munitions makers, by the war-craft builders or the economic royalists. It is being done by a Democratic administration supposedly in possession of its liberal wing and by a man who was elected to office on a platform that denounced the huge appropriations for defense by the Republican administration, then less than a billion dollars.[1]
The president has now thrown off all pretense of neutrality. But he is still trying to make people believe that the Germans can invade the United States by airplane — a proposition so preposterous that he cannot get a single military man to support it. He asks Congress for 50,000 planes. And here we see about to blossom a plan for universal military training. General Arnold, chief of the army air service, says 50,000 planes would cost $7,000,000,000. But this would require, in addition, equipment in the way of fields, hangars, repair and supply stations and quarters for a million men. This would cost another billion dollars at the very least. The naval estimate for maintaining planes is 30 men on the ground for every plane in the air. It asks 300,000 men for 10,000 planes. It would require at this rate 1,500,000 men for 50,000 planes. This does not include 100,000 pilots. Add all this to a regular army of half a million men — and they are talking about 750,000 in Washington — and you have a peacetime force of over 2,000,000 men. What this would cost, no man can say. But it is certain that this country cannot get a peacetime army of 2,000,000 men without conscription. It has the greatest difficulty in keeping its present small army enlisted to its authorized strength. The average American will hardly be able to get the full force of all this. But the president of the United States — who believes in a national army and universal military service — has actually asked Congress for an air force that will necessarily entail this.
Our only protection, perhaps, is that it is impossible. I have inquired among experts on this subject, and it is as certain as anything in this world is certain that we cannot produce 50,000 planes in a year and will be quite lucky if we can produce 10,000. This being so, why does the president ask for this fantastic number? A year and a half ago Boake Carter, radio commentator, broadcast the fleet maneuvers and described how the airplanes were demonstrating their superiority over the battleships. Roosevelt summoned Carter and gave him a "dressing down." He said the admirals complained. And he made it clear that the admirals were right. He did not share these novel notions about planes. The president is an admirals' man. He is an amateur admiral himself. He is a lover of battleships — with an old, deep sentimental passion about them like those British sea lords. He has been pouring all the preparedness money he has gotten into battleships. Now he wants planes — not some reasonable number that can be produced, but some fantastic number that cannot be produced. All this was done without very much consultation with the military chieftains who were quite at sea about it all when questioned by a congressional committee. The president has been sold this new and dramatic idea of fifty thousand planes just as he had been sold the Warren gold plan in a short conversation, just as he had been sold the vending-machine plan to put an end to retail clerks.

And then an election approaches. Americans are thinking of the 11 million people still unemployed, of the farm problem unsolved, of the utter paralysis of private investment, of the mounting public debt, of the scandals in Washington and local political machines and a score of other counts in the indictment by Roosevelt's political foes. And the war, the menace to our security, the call to national defense — all this will take the minds of our people off the failure to solve our own problems and will furnish a new excuse to spend another 10 or 15 billion dollars to return his party to power.
What is more serious than all this, of course, is that the president has been "meddling in" on the European situation for two years, and is increasing his meddling. While proclaiming himself the true neutral, he has been inching the country more and more toward active support of the two great empires. He is now the recognized leader of the war party. There is not the slightest doubt that the only thing that now prevents his active entry on the side of the Allies is his knowledge that he cannot take the American people in yet. He has said privately that he does not want to send men, will, in fact, never do it. If he went in, it would be merely with naval and air forces and with munitions and supplies. This, of course, is another example of the president's method of halfway thinking. Imagine this country going to war and then refusing to supply men to do the fighting!

Income Tax: Root of All Evil

2012-02-03T11:08:00.001-07:00

Frank Chodorov

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Frank Chodorov was an extraordinary thinker and writer, and hugely influential in the 1950s. This is his American classic that argues that the income tax, more than any other legislative change in American history, made it possible to violate individual rights that were at the core of the founding.

He argues that income taxes are different from other forms because they deny the right of private property and presume government control over all things. The introduction is by former IRS commissioner J. Bracken Lee.

Soak the Poor Mises Daily: by Frank Chodorov

2012-02-03T11:05:00.002-07:00

[Income Tax: Root of All Evil (1954)]

To be sure, the original Populists, and the aping Democrats and Republicans, to say nothing of the conscious Socialists, little thought that their income-tax gadget would ever be used to "soak the poor." It was an instrument, they thought, that could lend itself to no other purpose than to expropriate the rich in favor of the poor. How the poor would benefit from the expropriation, they did not explain; their intense hatred of the rich conveniently filled this vacuum in their argument. Their passion blinded them to the fact that this "soak the rich" law would enable the government to filch the pay envelope.

The class-war doctrine is most vicious not in that it sets man against man, producer against producer, but in that it diverts the attention of the contestants from their common enemy, the State. Men live by production, but the State lives by appropriation. While the haves and the have-nots struggle over the division of existing wealth, it is the business of the State to improve itself at the expense of both; it picks up the marbles while the boys are fighting. That has been the story of men in organized society since the beginning. That this lesson of history should have escaped the reformers of the 19th century, when the habit of freedom was still strong in America, can be easily understood; what is not easily explained is the acceptance of the doctrine of benevolent government in our day, when all the evidence to the contrary is before our eyes.
However, one good "reason" followed another for making better use of the 16th Amendment. After 1913, the government, which for over a century had managed to get along without income taxation, felt a continuing need for more funds.[1] The income-tax rates kept climbing, and the exemptions kept declining; the mesh of the dragnet was made finer and finer so that more fish could be caught. At first it was the incomes of corporations, then of rich citizens, then of well-provided widows and opulent workers, and finally the wealth of housemaids and the tips of waitresses.
This is all in line with the ability-to-pay doctrine. The poor, simply because there are more of them, have more ability to pay than the rich. The national pay envelope contains more money than the combined treasuries of all the corporations of the country. The government could not for long overlook this rich mine. Political considerations however, made the tapping of the pay envelope difficult. The wage earners have votes, many votes, and in order not to alienate these votes, it was necessary to devise some means for making the taxation of their incomes palatable. They had to be lulled into acceptance of "soak the poor."
The drug that was concocted for this purpose was "social security." The worker was told that he was not paying an income tax when his pay envelope was opened and robbed; he was simply making a "contribution" to "insurance" against the inevitable disabilities of old age. He would get it all back, when he could no longer work, and with a profit.
This is sheer fraud, as can be readily seen when comparison between social security and legitimate insurance is made. When you pay a premium on an insurance policy, the company keeps part of it in reserve. The amount thus set aside is based on actuarial experience; the company knows from long study how much money it must keep on hand to meet probable claims. Most of your premium is invested in productive business, and out of the earnings from such investment the company pays its running expenses and builds up a surplus to meet unexpected strains; or it pays the policy holders a share of this extra income, in dividends. Without going into the intricate details of the insurance business, the guiding principle is that benefits are paid out of the reserve or the company's earnings from investments.
Is that what happens to your "contribution" to social security? Not a bit of it.
Every cent taken from wages is thrown into the till of the United States Treasury, and is spent for anything the government decides upon. So, too, are the "contributions"from the employer. That is to say, social-security taxes are taxes, pure and simple; they are "forced dues and charges" levied by the sovereign on his subjects for the expenses of state. None of the money is held in reserve, none of it is invested in business. All is spent, and it is spent long before the "insured" is entitled to benefits.
To give some plausibility to the "insurance" advertisement, the government sets up a so-called reserve fund. In place of the money it collects, it piles up its own bonds, or IOUs, in an amount equal to the collections. The interest on these bonds, it says, will be adequate to meet the old-age obligations when due. But the interest on these bonds is paid out of what it collects in taxes; where else can the government get money? Since the so-called premiums are only taxes, and since the benefit payments are also taxes, the operation is the same as if an insurance company used up its premium collections in salaries and cocktail parties and then paid out benefits from new premiums. For doing that, the directors of the company can be sent to jail. However, the laws made for ordinary citizens are somewhat different from the laws made for public officials.
One of the arguments which helped to sell social security is that the "contributor" will not be dependent on his children for a livelihood when he can no longer work. Let's see if that is true. We must keep in mind that taxes are part of production; they are levied on what is being produced currently, not in the past. The payments to the nonproductive aged therefore come from what the government collects from those who are producing, their children. The government cannot get the money from anybody else. So that, in effect, the children are supporting their parents, collectively and without love.
The swindle is further compounded by the promise of something-for-nothing. The worker is told that his employer, the "exploiter," pays part of the premium, and is in effect compelled to make a contribution to old-age benefits. The fact is, as every schoolboy should know, that the employer must include in his expenses what he is compelled to "contribute." This expense shows up in the price of his goods, and the wage earner, as consumer, actually pays it. There is a similarity in this scheme with the shell game at the county fair.
The more we look into this offspring of the Sixteenth Amendment the more we are astounded by its fraudulent character. Take the matter of the bonds in the reserve fund. The government can issue money against them — that is, it can "buy" them with printed money when it needs money to pay old-age benefits; that is part of the law. Or, if the government sells the bonds to private persons, or to the banks, the buyers can borrow against them. In either case, new money comes into the market, lowering the volume of all the money in existence. That is inflation. Now, the money taken from the worker's pay envelope is worth more, will buy more goods, than the money he will get when he is old, simply because these bonds are in existence. This social-security scheme was started in 1937. One does not have to be an economist to know that in 1937 the dollar bought more bread and shoes than it does in 1954. The man who in 1954 begins drawing old-age benefits gets dollars that will fetch him less of the things he needs than the dollars he was compelled to "contribute" in 1937 and during the years that followed.
When the law was put into effect, the social-security doctors figured out that the fund will have to reach $50 billion before the interest on the bonds will be enough to pay the stipulated benefits to all who are entitled to it. That is, if the stipulated benefits are not increased. However, for political reasons there have been changes in both the benefits and the number of people who have been forced into the scheme. The "premiums" have also been raised. These changes have been made under the name of "insurance," but the plain fact is that the government made them in order to increase its spendable funds. It wanted more taxes, and it dipped further into the pay envelope; that is the real purpose of the social-security laws.[2]
At this writing, the fictitious reserve fund has accumulated $15 billion. Already some economists are beginning to wonder how the government will be able to pay benefits to all those who during the past 16 years have been making "contributions" when they will have reached the age of 65. Figurers have shown that the interest will not be sufficient to keep the aged barely alive, if they have to depend on these stipends; and under the law they are deprived of these stipends if they earn more than $75 a month extra. This is the answer:
The government will meet its obligations by handing out brand-new printed dollars, with declining purchasing power, and the old folks will have to depend on what support they can beg from their tax-ridden children.
This book deals with income taxation, not with social security, which needs a book in itself. But we started out with the purpose of showing how the Sixteenth Amendment changed our country economically, politically, and morally, and there is no better example of this change than the operation of the social-security branch of income taxation and its effects on the character of the nation.
Despite the fact that social security is a fraud in every respect, there are many who, ignoring the evidence, support it because "we must not let the old folks suffer destitution." This implies that before 1937 it was habitual for children to cast their nonproductive parents into the gutter. There is no evidence for that, and there are no records supporting the implication that all over 65 regularly died of hunger. The present crop of children are just as considerate of their old folks as were the pre-1937 vintage, and it is a certainty that if their envelopes were not tapped they would be in better position to show their filial devotion. Besides, if the government did not take so much of our earnings, we would be better able to save for our later days.
The fact is, there is no such thing as social security; only the individual grows old and is in need. Society is never in want and never grows old, simply because society is not a person. Security against the exigencies of old age has always been a problem of life, and each person in his own way has tried to solve it. Paying up the mortgage on the old home so that one would always have a roof over one's head was one way; laying up a nest egg was another; annuity insurance is the most recent form of security.
These methods of taking care of oneself through thrift, however, call for self-reliance, and that is exactly what the advocates of social security would destroy. It is contrary to the whole philosophy of socialism. If the individual is allowed to shift for himself, there is no need for the services of the self-anointed do-gooders. Hence it is necessary to develop a slave psychology, a feeling of helpless dependence on the group. If this calls for the use of police power — and it always does — so much the better; that means the organization of a bureaucracy with a vested interest in continuing poverty.
Lurking in the background of social-security thinking is a concept of organized society that is gall and wormwood to fundamental Americanism. It is the idea that in the nature of things some men are destined to rule and others to obey. As a matter of fact, social-security advocates must take resort in the caste system of society to support their "insurance" scheme. They maintain that social security is necessary because most wage earners are incontinent and must be secured against their own weakness. Who is best qualified to look after them? Why, those who have been anointed with the proper college degrees and are crowned with the power of the State.
It was exactly this father-child concept of society that Bismarck held, and for that very reason he took to social security. In his political philosophy it was axiomatic that the Junker class was ordained by God to rule over Germany. As a correlative, it was an obligation of that class to look after the welfare of the ruled.[3]
In a feudal society, where the economy is almost wholly agricultural and people do not move from place to place, it was quite simple for the ruling lord to see that his sick and old tenants were provided for. But this direct relationship between ruler and ruled could not be maintained in an industrial economy, and in Bismarck's time, industry was upsetting the comfortable feudal system. Social security came to his rescue; it was just what he needed to make his feudal concept of government work.
If anybody could make social security work, it would have been the Junkers. They were by tradition and economic independence free from the petty temptations of office; they were not beholden to an electorate for either their income or their position. And yet, they were unable to build a healthy society upon social security.
The reason for the failure of social security in Germany, and wherever else it has been tried, is psychological, not political. When the individual is relieved of the obligation of self-respect, he acquires the habits of helplessness; he is inclined to retreat to the security of the prenatal state. The more he is taken care of the more he wants care.
In the past 20 years, thanks to the prevailing social-security philosophy, it has become a habit of mind with American youth to look upon government as its permanent guardian; the idea that one is responsible for oneself is sneered at as "reaction." It is nearly impossible to convince a young man born after 1920 that to accept a government handout is degrading — or that the whole social-security business is a fraud.
There are some advocates of social security who maintain that it can be divorced from politics and run on sound insurance principles. It can, but not by the government; that, however, is not what is meant. It is assumed that the government can run an honest insurance business, sticking very close to actuarial figures in determining its policy payments. But how can a government business be rid of politics? Especially a government which rests on popular suffrage?
Any attempt to limit security payments by actuarial figures would raise a howl of protest, a howl that would be recorded at the next election. The politicians have convinced the American citizen that the government owes him a living, as a matter of "right," and what is easier than to ask for more? And the aspirant for office would have to be much above the average if he did not promise more. Were he to tell the citizen that the whole thing is a fraud, that only a private insurance company could manage the business on a sound basis, he would be inviting defeat at the polls.
In Germany, the social-security philosophy of government led to that moral decadence which facilitated the advent of Hitler. In England, it made a once-proud people into a nation of panhandlers. What will it do to America?
In 1943, taking advantage of the war, the federal government put further pressure on those of modest incomes; it enacted a law requiring employers to deduct twenty percent from the earner's pay envelope, or check, for the government's account. The government was spending money so fast that it could not wait until the end of the year for collections. It had to have its cut of income even before the earner saw it. In line with this urgency, it required corporations and business and professional men to pay every quarter, in advance, an estimated amount of their earnings.
Measures instituted by government during war have a way of perpetuating themselves during peacetime. Government is incapable of relinquishing powers. And so, the withholding and the pay-as-you-go taxes are still in force and will continue. And, of course, government will find good reason for spending money as fast as it comes in, or faster. Despite its monstrous take from production, and its means for expediting collections, its expenses exceed income, and the excess is annually taken care of by what is known as "deficit financing." This, as every spendthrift knows, is borrowing against expected income; it is borrowing against the future. But while the private spendthrift is held in leash by the threat of bankruptcy, government is unhampered by any such fear; it can print money or something equivalent to money, and compel citizens and banks to accept this paper in payment for its debts; it can rob its subjects by the trick of inflation, and thus make up its overspending.
The real reason for withholding taxes is the unwillingness of workers to share their incomes with the government and the consequent difficulties of collection. To overcome this handicap, the government has simply impressed employers into its service as involuntary and unpaid tax collectors. It is a form of conscription. Disregarding the right of privacy, which is an essential of liberty, the government's agents may, under the law, invade the employer's office, demand his accounts, and punish him for any infraction which they believe he has committed; they can impound his property and inflict a penalty for not having collected taxes for the government.

This violation of our vaunted rights was highlighted by Miss Vivien Kellems, a Connecticut manufacturer, several years ago. To test the constitutionality of the law, Miss Kellems refused to collect these taxes and notified the government of her intention. She asked that she be indicted so that the matter could be brought to court. At the same time, she instructed her employees to pay their taxes regularly, helped them compute the amounts, and saw to it that they had proof of payment. The government refused to indict her. Rather, its agents, without court order (the government is not hampered by such formalities), impounded her bank account and demanded a penalty from her for not collecting taxes which had been paid. The only thing she could do under the circumstances was to sue the government for recovery of her money. In this she was successful. But the matter of constitutionality was assiduously avoided by the government's attorneys, by legal tricks, and she was never able to get to it. Laws are made for citizens, not the government, to obey.
There is grave question as to the constitutionality of the withholding taxes. But that is not a point of consequence; the Constitution has often proved itself amenable to political considerations. The main point is that the Sixteenth Amendment has widened the area of government power, and as a consequence has reduced the area of liberty.

Misrepresenting Inequality. Mises Daily: by Gary Galles

2012-02-03T11:01:00.003-07:00

Sir William Thompson, Lord Kelvin, once said,

When you can measure what you are speaking about, and express it in numbers, you know something about it; but when you cannot measure it, when you cannot express it in numbers, your knowledge is of a meager and unsatisfactory kind.

Kelvin's statement is an important reminder that when magnitudes of certain variables or their relationships are in question, without the ability to accurately measure them, you don't know very much; certainly far too little to claim knowledge of "the answer." Unfortunately, his view, while dominant in the natural sciences, has often been abused in the social realm, in defense of misguided government policies.
Nowhere is this clearer than in the most recent iterations of claims about wealth, poverty, and inequality that seem to arise everywhere from Occupy protesters to President Obama's reelection campaign. Here, the discussion typically relies on measures that are highly inaccurate (compounded by ambiguous and confusing terms, such as statements about "the rich," sometimes meaning people with high current incomes and other times those who have a great deal of financial wealth, even though those groups are very different and the cutoffs are typically arbitrary and often unstated), yet they are used as if they met Kelvin's criterion, providing a reliable basis for social policy.
When advocates for ever-more redistribution focus their antirich rhetoric on those with a great deal of wealth, they rely on seriously incomplete and misleading measures of wealth and ignore variables crucial to an adequate analysis of current financial wealth.
Several huge sources of wealth are omitted from the financial measures used by those fixated on inequality. These include pension-fund assets, which largely represent the retirement funds of the nonrich; Social Security wealth (the present value of benefits qualified for but not yet received); and human capital — the knowledge, energy, and abilities embodied in working people but not yet turned into financial wealth. These represent trillions of dollars of wealth, spread far more evenly through the population than financial-wealth measures imply. The same is true of our tremendous wealth in the form of consumer durable goods, from cars to refrigerators to computers. Such omissions guarantee misunderstanding.
Wealth-inequality complaints, in their rush to justify more government redistribution, also ignore many important determinants of financial-wealth differences. A key one is demographics. Disparities in measured wealth in large part reflect age differences in the population.
When people are young, they have not yet had time to convert their capabilities into financial wealth by earning income, then saving and investing in financial assets (e.g., a major reason for low measured wealth in Hispanic households is the youth of their primary earners). However, when they have gotten older, especially approaching or during retirement, they have had time to convert their unmeasured human capital into measured financial wealth. The result is that much of the apparent wealth inequality really reflects age differences in the population (magnified as baby boomers have aged). This demographic bias is also used to buttress claims by those opposed to reducing tax rates, because the immediate positive effects on financial asset prices go to the owners at that time — those productive enough and old enough to have accumulated the financial wealth to own them — even though they would benefit all productive Americans as people responded to improved incentives.
If anything, measures of income inequality and poverty are even less reliable.
One major reason is that that in-kind welfare programs go uncounted in the official data, so that they do not improve the measured situations of the poor. This is a very large error. Of the over $500 billion given annually in government means-tested assistance (not including another quarter trillion or so dollars Medicare spends on the elderly), roughly three-quarters is now given in kind.
The official data further omits taxes, disguising the disproportionate burdens borne by higher-income families. It also hides the impact of the Earned Income Tax Credit. Even though the EITC is refundable, putting dollars directly into recipients' pockets, it is ignored as a "negative tax," making its $40 billion plus in annual transfers to lower-income families disappear from view.
Income studies also fail to incorporate nonsalary benefits and payments to workers, which have increased most among those not at the top of income measures. Mark Warshawsky of the Social Security Advisory Board found that recent expansions in measured earnings inequality were almost completely attributable to rising benefits costs.
The official Census survey also ignores substantial underreporting of income (e.g., people working "off the books" to maintain greater eligibility for various benefit programs) in the Census survey. For example, the more accurate measures of the Survey of Income and Program Participation have routinely found poverty rates 25 percent below official Census estimates. The underreporting by lower-income households is also reflected in the dramatically smaller inequalities in measures of consumption — far better indicators of well-being — than of current income.
Just as the official data dramatically underestimates the condition of those at the lower end of the current income distribution, it overestimates the incomes of those at the higher end. For example, the recent Congressional Budget Office study of inequality, the most common current "proof text" of increasingly unjustifiable disparities, is based on individual taxable income reported to the IRS. However, many forms of income not formerly reported as individual income now are, due to changing incentives, sharply biasing upward measures of the share of income going to higher-income earners. Many people have shifted from filing as businesses under the corporate tax to filing as individuals as a result of decreasing individual tax rates, dramatically exaggerating increases in their incomes. Top managers have also moved from receiving income as stock options taxed as capital gains to nonqualified stock options, making them countable as taxable personal income. The late 1980s cut in income tax rates also saw greater income reporting, raising measures of income inequality.
Inequality complaints also commonly overlook other important determinants of market outcomes, including far more workers and hours worked by members of higher-income families, family size (positively correlated with income), and the far-higher cost of living in large urban areas, where larger incomes tend to be earned. Official household-income measures also ignore that households have become substantially smaller than in the past, thus substantially underestimating the growth in income (e.g., real per-household income rose only 6 percent between 1969 and 1996, while real per capita income rose 51 percent). Further, our aging population has increased the proportion of those retired, increasing apparent income inequality.
Income data is so flawed that many policies and programs that increase recipients' well-being actually make them look poorer.
While official data ignores massive in-kind aid to those near the bottom of the income distribution, such programs reduce benefits as market incomes rise (e.g., the 30¢ reduction in food-stamp benefits for each dollar of net income) or terminate eligibility if incomes exceed a certain level (e.g., Medicaid). Most EITC recipients are also in the phase-out range of incomes, where they lose 21¢ in benefits (as well as paying other taxes) for every added dollar earned, sharply increasing their effective tax rates. Such disincentives lead many to earn less, reflected in the measured data, making the recipients of huge transfers from others actually appear poorer.
Market responses to redistribution also make inequality look worse. Income redistribution compresses after-tax wage differentials between current high- and low-income earners. But by reducing the after-tax payoff to the necessary investment and sacrifice, it reduces the supply of high-income workers over time, raising their pretax earnings. Conversely, it increases the supply of low-income workers, with the opposite effect. Because income data counts only the changed market earnings, measured incomes grow more unequal.
Beyond such massive mismeasurement, which means that the data used to promote increasing redistribution do not come anywhere near meeting Lord Kelvin's standard of knowing what you are talking about, there is another major problem with the interpretation of changing income shares.
Even if, properly measured, certain groups increased their share of financial wealth or current income, that does not imply that their increase in wealth came at the expense of others, so that the government must intervene to "fix" it. Such a view fundamentally misunderstands the nature of markets. Whatever level of wealth one starts at, the way to get wealthier in a market economy is not to make other people poorer but to make them better off.
This follows from the voluntary exchanges of the marketplace — you and I won't agree to trade unless we both feel we get more in value than we give up. Increasing your wealth in a market economy therefore depends on providing goods or services that others value more highly than what it costs you to provide them: a win-win situation. If the wealthy are getting wealthier in the marketplace, this means that they are employing their wealth to improve, not harm, the well-being of others. But the improved options, products, and services — which are increases in real wealth — that buyers receive in exchange for payments that make some suppliers rich are ignored in standard measures of wealth.
While increased wealth in a voluntary-exchange economy comes from creating wealth for others, there are other ways to increase wealth — ways that make others poorer. They have a common denominator: government and its ability to coerce people. Examples include tariffs, quotas, restrictions on entry and competitors, price controls, licensing rules and requirements, and subsidies. All create wealth for some (typically well-organized and informed special interests) by taking it away from others (typically the poorly informed and unorganized general population). Such policies do leverage government power to increase some people's wealth at others' even-greater expense, and can thereby be properly condemned, but one need not know what happened to the distribution of income to do so.

Disparities in Americans' officially measured financial wealth or current income do not justify abandoning the well-established principle that wealth creation in a market economy benefits others. To the extent that such differences arise from the voluntary exchanges of the market, everybody benefits, whether incomplete data reflects it or not, and there is no problem to fix. Added government interference would then simply reduce people's incentives to make others better off. To the extent that some increase their wealth by using government power to harm others, the problem is the abuse of government power; and decreased government involvement, not increased government intervention, is the only real solution.
Political support for a plethora of redistribution policies has long been maintained by twisting Lord Kelvin's dictum — treating "meager and unsatisfactory" data that dramatically mismeasures wealth, poverty, and inequality in America as if it were accurate. That abuse reflects the huge payoff for those groups who use it to win redistribution in their favor, but it does not even remotely reflect reality. And since reality is the necessary basis for effective judgments, the result is to undermine accurate understanding, and therefore the potential for effective policy — particularly "take your hands off" as the most effective government policy.

Ron Paul on Peace Mises Daily: by Ron Paul

2012-02-03T10:59:00.001-07:00

Mr. Speaker, today I rise with gratitude to Edmund Burke and paraphrase words he first spoke 224 years ago this week. It is presently true that to restore liberty and dignity to a nation so great and distracted as ours is indeed a significant undertaking. For, judging of what we are by what we ought to be, I have persuaded myself that this body might accept this reasonable proposition.

The proposition is peace. Not peace through the medium of war, not peace to be hunted through the labyrinth of intricate and endless negotiations; not peace to arise out of universal discord, fomented from principle, in all parts of the earth; not peace to depend on juridical determination of perplexing questions, or the precise marking the shadowy boundaries of distant nations. It is simply peace, sought in its natural course and in its ordinary haunts.
Let other nations always keep the idea of their sovereign self-government associated with our republic and they will befriend us, and no force under heaven will be of power to tear them from our allegiance. But let it be once understood that our government may be one thing and their sovereignty another; that these two things exist without mutual regard one for the other — and the affinity will be gone, the friendship loosened and the alliance hastened to decay and dissolution. As long as we have the wisdom to keep this country as the sanctuary of liberty, the sacred temple consecrated to our common faith, wherever mankind worships freedom, they will turn their faces toward us. The more they multiply, the more friends we will have; the more ardently they love liberty, the more perfect will be our relations. Slavery they can find anywhere, as near to us as Cuba or as remote as China. But until we become lost to all feeling of our national interest and natural legacy, freedom and self-rule they can find in none but the American founding. These are precious commodities, and our nation alone was founded on them. This is the true currency which binds to us the commerce of nations and through them secures the wealth of the world. But deny others their national sovereignty and self-government, and you break that sole bond which originally made, and must still preserve, friendship among nations. Do not entertain so weak an imagination as that UN Charters and Security Councils, GATT and international laws, World Trade Organizations and General Assemblies are what promote commerce and friendship. Do not dream that NATO and peacekeeping forces are the things that can hold nations together. It is the spirit of community that gives nations their lives and efficacy. And it is the spirit of the Constitution of our Founders that can invigorate every nation of the world, even down to the minutest of these.
For is it not the same virtue which would do the thing for us here in these United States? Do you imagine then that it is the income tax that pays our revenue? That it is the annual vote of the Ways and Means Committee that provide us an army? Or that it is the court martial that inspires it with bravery and discipline? No! Surely, no! It is the private activity of citizens which gives government revenue, and it is the defense of our country that encourages young people to not only populate our army and navy, but also has infused them with a patriotism, without which our army will become a base rubble and our navy nothing but rotten timber.
All this, I know well enough, will sound wild and chimerical to the profane herd of those vulgar and mechanical politicians who have no place among us: a sort of people who think that nothing exists but what is gross and material, and who, therefore, far from being qualified to be directors of the great movement of this nation, are not fit to turn a wheel in the machinery of our government. But to men truly initiated and rightly taught these ruling and master principles, which in the opinion of such men as I have mentioned have no substantial existence, are in truth everything. Magnanimity in politics is often the truest wisdom, and a great nation and little minds go ill together.

If we are conscious of our situation, and work zealously to fill our places, as becomes the history of this great institution, we ought to auspicate all our public proceedings on Kosovo with the old warning of the Church, Sursum corda! We ought to elevate our minds to the greatness of that trust to which the order of Providence has called us. By averting to the dignity of this high calling, our forefathers turned a savage wilderness into a glorious nation, and have made the most extensive and the only honorable conquests, not by bombing and sabre-rattling, but by promoting the wealth, the liberty, and the peace of mankind. Let us gain our allies as we obtain our own liberty. Respect of self-government has made our nation all that it is. Peace and neutrality alone will make ours the republic that it can yet still be.

Libertarian Political Realism Mises Daily: by David S. D'Amato

2012-02-03T10:56:00.001-07:00

Philosopher Alexander Moseley offers a straightforward definition of political realism as "tak[ing] as its assumption that power is (or ought to be) the primary end of political action, whether in the domestic or international arena." Realism thus provides a prism through which to observe and to appraise political phenomena, dispensing with the illusions that have built up around the modern state. A consistently realistic view of the state does not impute to it godlike, extramundane characteristics or motivations, or detach it from all of the analyses that mark common discussions of incentives and "human nature." Political realism — as both an experiential or historical matter and a methodological one — must be at the center of a thoroughgoing libertarian project, informing our criticisms and proposed solutions. In a time when attitudes toward political power are marked by awe and adoration rather than a deliberate suspicion, a new, rehabilitated realism can furnish the fresh approach to social questions that people around the world are crying out for.

The paradigm of political realism has been informed by and closely intertwined with "'classical elite theory,' a school of thought whose enduring contribution to sociology has been to assert, very simply, that minorities always wield control in large societies and associations."[1] The theories of elitism and realism, in and of themselves, do not necessarily entail a value judgment about whether elites should sit at society's controls; instead, they make a simpler, more fundamental judgment about the conditions that have, as a matter of fact, obtained in political arrangements of all kinds, ranging from feudal systems, to absolute monarchies, to democracies. As a response to Marxism, elitism dismissed out of hand the idea that the state could ever be motivated by egalitarian attitudes, as an instrument of proletarian interests. Already, then, the tradition of classical elitism shares with libertarianism an emphasis on the most basal and distinctive quality of politics, refusing to abide arbitrary distinctions that end up being more rhetorical than substantive.
Anatomizing political institutions and evaluating their results with elite theory as a touchstone equips libertarians with a capacity not to lose the forest for the trees. The theory asks, What is the central and essential purpose of the state in social life? And the sundry brands of total statism during the 20th century seem to lend support to the elitist thesis about the fundamental nature of political society: regardless of purported ideologies, only a small few can brandish the coercive levers of the government machine at any given time.
Further, concrete interests and incentives will eclipse orotund ideological diction wherever the two come into conflict. Where libertarians and the classical elitists may part ways, though, is in their respective analyses regarding the inevitability of elite rule, with the elitists insistent on the ultimate permanence of the political class. Among the primary expositors of this argument — of the notion of Rule by a Few as an insuperable law of nature — was the German sociologist Robert Michels, whose 1911 work Political Parties gave us the "iron law of oligarchy." The claim of the iron law, put generally, is that a small, mobilized and established group will always be capable of and prepared to manipulate processes and rules to their advantage. The great majority of the populace, after all, consumed with the quotidian burdens of workaday life, will hardly notice that elite interests are systematically overtaking ostensibly "public" institutions.
In discussing what he calls (quoting Charlotte Twight) "participatory fascism," Robert Higgs has delineated the kind of oligarchic rule that prevails in the United States (Higgs adds that it might variously be called "disaggregated neocorporatism or quasi-corporatism"). Characterized by "abundant 'iron triangles'" composed of "well-organized private interest groups" and the government agencies and committees that are tasked with regulating them, US political economy finds the basic contentions of elitism confirmed. Focusing on the ways that this oligarchic system has developed during and with the help of crises, Higgs has echoed the assertions of, among others, Pareto and Michels that only a small group can act quickly, decisively and in concert to achieve their ends. Murray Rothbard similarly assailed America's "neo-fascist 'corporate state'" as the antithesis of a free market, the result of momentous state interventions in the economy.
Given their premises about power and its enticements for human beings, libertarians may find the classical realists' devotion to the state something of a paradox, contradicted by their very assumption. Realism as we find it in the work of, for instance, Niccolo Machiavelli and Thomas Hobbes regarded the state as separate and distinct from society itself, as a kind of "necessary evil" erected to prevent the summum malum — political disorder.[2] For the realists, a powerful, central state, like those of the present day, was imperative in preventing the worst expressions of human nature from precipitating the war of all against all. So while they in many ways avoided romanticizing the state, looked upon as power incarnate, they nevertheless failed to see the inconsistency in their idea.
Libertarians have a more complete understanding of realism's claims and their practical implications. If human nature really is what Hobbes suspected, then statism is indeed the most dangerous of proposed solutions to the kind of all-encompassing savagery that worried him. Libertarian scholars, particular those of the Austrian School, have sedulously demonstrated that it is the state that has been the source of most violence, disorder, and chaos in the world — a fact that is quite consistent with the realists' understanding of power relations. Certainly a tiny circle of rulers, naturally driven by cupidity, cannot be trusted with the kind of power associated with the Hobbesian vision of the state. The mistake of realism, then, at least in part, is the one that elitism so methodically addresses, that of treating the state as a kind of external, objective apparatus capable of administering impartial justice to society at large. Because while libertarianisms share realism's construction of the state as a thing apart from society more generally, libertarians don't pretend that the state is therefore insulated from or above the inducements that drive all relationships. Having set up the state or "artificial man" as a panacea, outside of the illations about humanity they had previously put forward, the realists had their solution to the problem of chaos. But what a thin solution it is in light of libertarian insights. Where Hobbes and Machiavelli made the far-reaching idea of realism a defense and justification for the state, libertarians must seek to rescue its lessons for a free society.

"The emergence of an omnipotent managerial class," Mises wrote in Human Action, "is not a phenomenon of the unhampered market economy." Rothbard's work too is brimful with examples of the ways that elites within political economy coordinated to garrote genuine free-market dealings in order to create and protect monopolies. And like the classical elitists, Rothbard observed that, for the elites, "theory came later; theory came … to sell to the deluded masses the necessity and benevolence of the new system." In the final analysis, it has mattered little to elites what the system of political parasitism and spoliation is called, at least as long as their mastery over productive society is left intact.
Taken together, the most valuable elements of both realism and elitism can do much to advance the libertarian case against the state and in favor of a society defined by voluntary exchange and individual rights. These historical traditions can provide reference points and shading to an already resonant contemporary libertarian political theory. "All that the analyst or historian need do," argued Rothbard, "is to assume, as an hypothesis, that people in government or lobbying for government policies may be at least as self-interested and profit-motivated as people in business or everyday life, and then to investigate the significant and revealing patterns that he will see before his eyes." We would do well as advocates for a free and stateless society (forgive the redundancy) to heed Rothbard's advice.

ACTA = Global Internet Censorship – Now Even Foreign Governments Will Be Able To Have Your Website Shut Down

2012-02-03T10:24:00.004-07:00

Global Internet censorship is here. SOPA and PIPA have been stopped (at least for now) in the United States, but a treaty known as ACTA (the Anti-Counterfeiting Trade Agreement) is far worse than either of them. ACTA was quietly signed by Barack Obama back on October 1st, 2011 and most Americans have never even heard of it. But it could mean the end of the Internet as we know it. This new treaty gives foreign governments and copyright owners incredibly broad powers. If you are alleged to have violated a copyright, your website can be shut down without a trial and police may even show up at your door to take you to prison. It doesn't even have to be someone in the United States that is accusing you. It could just be a foreign government or a copyright owner halfway across the world that alleges that you have violated a copyright. It doesn't matter. So far, the U.S., the EU and seven other nations have signed on to ACTA, and the number of participants is expected to continue to grow. The "powers that be" are obsessed with getting Internet censorship one way or another. The open and free Internet that you and I have been enjoying for all these years is about to change, and not for the better.

So how come the U.S. Senate never voted on ACTA? Doesn't the U.S. Constitution mandate that all treaties must be approved by a two-thirds vote in the Senate?
Of course it does.
But Barack Obama has gotten around this by calling ACTA an "executive agreement", which is a load of crap.
Unfortunately, this is the kind of nonsense we are getting out of Obama on a regular basis now. He has shown endless disdain for the U.S. Constitution.
Some members of Congress are expressing deep alarm over ACTA. For example, U.S. Representative Darrell Issa is calling ACTA "more dangerous than SOPA".
There are some members of Congress that are even demanding that ACTA be submitted to the U.S. Senate for a vote. Unfortunately, their voices are very few so far, and ACTA is getting next to no coverage in the mainstream media.
But this new treaty is very, very serious. It basically mandates that all Internet communications be constantly monitored for copyright infringement. Sites like YouTube, Facebook and Twitter will have to monitor accounts for copyright infringement 24 hours a day.
If you are alleged to have committed a violation, you might not just lose your social media account or your website.
You could potentially be sent to prison.
Yes, seriously.
What we are talking about is Chinese-style Internet censorship for the entire globe.
The following comes from a recent Forbes article....

“Why does ACTA matter to the media and citizens?” writes Alex Howard. “Consider the phrase “intermediary liability.” That’s the principle that websites on the Internet, like YouTube, Internet service providers, web hosting companies or social networks, should not be held liable for the content created or uploaded by their users.”
The new rules proposed in ACTA essentially transform Western ISPs into something more along the lines of ISPs in China and other more restrictive nations.

One of the worst elements of ACTA is that it would allow accusers of copyright infringement to completely and totally bypass judicial review.
If you don't think that ACTA will change the Internet, just check out the following excerpt from a recent article by Paul Joseph Watson....

Under the provisions of ACTA, copyright holders will be granted sweeping direct powers to demand ISPs remove material from the Internet on a whim. Whereas ISPs normally are only forced to remove content after a court order, all legal oversight will be abolished, a precedent that will apply globally, rendering the treaty worse in its potential scope for abuse than SOPA or PIPA.

Big sites like YouTube, Facebook and Twitter may just decide that it is too much of a hassle to monitor millions of pieces of content. Allowing users to constantly post content on their sites would be a huge risk. In fact, if they are found to be allowing "copyright infringement", those sites could be permanently shut down.
The American people need to get educated about this new treaty before it is too late. There is still a chance that we could get the U.S. Congress to take action against this new treaty.
Under ACTA, Internet service providers will essentially be required to become the police of the Internet. This was explained in a recent article by Cory Doctorow....

New revelations on ACTA, the Anti-Counterfeiting Trade Agreement (ACTA), a secretive global copyright being privately negotiated by rich countries away from the UN: ACTA will require ISPs to police trademarks the way they currently police copyright. That means that if someone accuses you of violating a trademark with a web-page, blog-post, video, tweet, etc, your ISP will be required to nuke your material without any further proof, or be found to be responsible for any trademark violations along with you. And of course, trademark violations are much harder to verify than copyright violations, since they often hinge on complex, fact-intensive components like tarnishment, dilution and genericization. Meaning that ISPs are that much more likely to simply take all complaints at face-value, leading to even more easy censorship of the Internet with nothing more than a trumped-up trademark claim.

One of the big problems with ACTA is that it is way too broad and way too vague.
Vague language allows authorities to "interpret" the law any way that they see fit.
This can often lead to selective enforcement. Websites that authorities like will be left alone, while those that they don't like will be harassed or completely shut down.
ACTA was written in secret and it has been pushed through very, very quietly. The following comes from a recent CNN article....

Like many trade agreements, ACTA is a confusing mess. Even its signatories don't agree on how it's supposed to work. The way it's been pushed forward has also been unruly -- talks have been held in secret, without any kind of legislative oversight or input from citizens or public-interest groups. The public only became aware of it in 2008, a couple of years after discussions began, when Wikileaks published a discussion paper. Since then, drafts of the pact have been released to the public, each successively less onerous to critics. Reportedly, though, big media and pharmaceutical lobbyists have been privy to the talks all along

Of course - this is a chance for big media and big corporations to take control of the Internet.
The way ACTA has been pushed on us has been absolutely disgusting. In fact, one key EU official that was in charge of investigating ACTA has resigned in protest over how this whole thing has gone down. He says that ACTA is basically being crammed down the throats of the European people....

I want to denounce in the strongest possible manner the entire process that led to the signature of this agreement: no inclusion of civil society organisations, a lack of transparency from the start of the negotiations, repeated postponing of the signature of the text without an explanation being ever given, exclusion of the EU Parliament’s demands that were expressed on several occasions in our assembly.
As rapporteur of this text, I have faced never-before-seen manoeuvres from the right wing of this Parliament to impose a rushed calendar before public opinion could be alerted, thus depriving the Parliament of its right to expression and of the tools at its disposal to convey citizens’ legitimate demands.”
Everyone knows the ACTA agreement is problematic, whether it is its impact on civil liberties, the way it makes Internet access providers liable, its consequences on generic drugs manufacturing, or how little protection it gives to our geographical indications.
This agreement might have major consequences on citizens’ lives, and still, everything is being done to prevent the European Parliament from having its say in this matter. That is why today, as I release this report for which I was in charge, I want to send a strong signal and alert the public opinion about this unacceptable situation. I will not take part in this masquerade.

For much more on ACTA, please watch the remarkable video posted below. It does a great job of explaining exactly what ACTA is and why we need to be so concerned about it....
The world is changing and the Internet is changing.
If you don't speak up now, the Internet as we know it today may soon be gone for good.

What Do You Do When The Country Where You Live Is Literally Going Insane?

2012-02-03T10:21:00.001-07:00

Do you ever get the feeling that the world around you is going crazy? If you live in America today and you are not in a television-induced coma, then you have probably had that feeling. It seems like almost everywhere you turn these days, there is someone that is seriously losing it. It is not just our politicians either. In every profession and on every level of society there are lots of people that appear to be a few fries short of a Happy Meal. So what do you do when the country where you live is literally going insane? When paranoia, fear and delusional thinking are commonplace, it is very difficult for a society to function normally. And unfortunately, some of the craziest people out there are working for the federal government. These days you literally do not know who you can count on. If you contact someone in a position of authority, that person may help you or that person may turn out to be a raving lunatic. Once upon a time, there was a feeling that most people in America shared a set of common values, but those days are long gone. These days, it seems like nearly everyone has their own idea of what "right and wrong" are, and so when you meet someone you never know what you are going to get. What may seem "totally insane" to you may seem perfectly normal to the person that you are trying to interact with.

Yes, of course part of the problem is that the U.S. population has been very much "dumbed-down" over the years. Our government schools are pumping out millions upon millions of kids that are dumb as a rock, and our entertainment industry is slowly turning the American people into a bunch of jibbering idiots.
But our problems go way beyond the fact that a large percentage of our population is uneducated. The truth is that some of the most paranoid and irrational Americans you will meet are actually very highly educated.
For example, it really does take someone extremely paranoid to believe that we need to strip-search 80-year-old women at our airports for the sake of national security.
Have you ever met someone that is truly paranoid? Everyone and everything is a threat to them.
Well, it is the same thing with those running the Department of Homeland Security. The size of the "no fly list" in the U.S. has more than doubled over the past 12 months. A year ago, there were about 10,000 names on it, and today there are approximately 21,000 names on it.
In fact, your name might be on it right now and you may never even know until you try to get on to an airplane.
But the "terrorist" watch list is even worse. The "terrorist watch list" now has over a million names on it. According to the Washington Post, a "single tip" can get you put on to that list forever.
In America today, we are all "potential terrorists", and we have been told that we must give up our rights so that the government can keep us safe from the "dangerous people" that could be living right down the street from us.
Yes, there are real terrorists out there, but getting us all scared to death of our neighbors is not going to help anything.
Sadly, the truth is that it is often law enforcement authorities that we need to be most afraid of.
The other day, a team of FBI agents hacked down the front door of one lady's apartment with a chainsaw....

“I just happened to glance over and saw this huge chainsaw ripping down the side of my door,” she explains. “And I was freaking out. I didn’t know what was going on.”

They had her on the floor for 35 minutes before they finally figured out that they had the wrong apartment.
Oops.
Of course the criminals are becoming more insane as well, and they are increasingly acting in groups. Over the past few years, we have seen a frightening rise in the number of crimes committed by mobs of criminals. The following is one recent example from Syracuse, New York....

Authorities say a group of nine people swarmed a neighborhood grocery store in Syracuse and stole nearly $40,000 by distracting the clerk and blocking her view.
Syracuse police tell local media that they believe the thieves are a roving band of scam artists who target small stores with few employees.

A few months ago, I wrote an article about the flash mob epidemic that we are now seeing in America. Large groups of kids are banding together and are deciding that it would be a really good idea to go out and commit a crime together.
Some would call such behavior stupidity while others would call it sheer insanity.
But whatever you want to call it, the reality is that it is quite an alarming trend.
People also seem to be becoming more sadistic these days as well.
The other day, two sisters in Wisconsin were arrested for sexually assaulting a man with a pair of pliers and having him drink a glass of urine.
Does anyone remember women acting this way 40 or 50 years ago?
Unfortunately, if you are a victim of a crime and you call the authorities for help, you never know what you are going to get.
If a good police officer responds, you may get help.
If a bad police officer responds, you may get raped. Yes, that is actually true. Sometimes the police end up being even worse than the criminals. When one 19-year-old single woman in Milwaukee called 911 for help, she didn't expect to get raped by the police. But that is exactly what happened.
Teachers are probably even worse. As I wrote about the other day, another story appears in the mainstream media about some teacher doing perverted things with students almost every single day now.
So what should you do?
Should you just go live out in the middle of the woods somewhere to escape all of this insanity?
Unfortunately, that will not work either. The crazies can find you back there too. The following is a comment that a reader identified as BenjiK shared on one of my recent articles....

I had a 1962 Chevy Bel-Air given to me by my grandfather that was stored under a car cover, behind a solid fence, and COMPLETELY out of public site. It was going to be a project for me and the kids when they got a little older. We lived on over 2 acres, on a dirt road, outside the city limits and we were friends with the few neighbors we had. I received a letter in the mail from the county stating I had 30 days to get the “abandoned” vehicle out of my yard or face fines up to $117 a day for every day not in compliance. I about flipped. Upon contacting a county official I learned that I wasn’t being “singled out”, this was a county wide “crackdown” on “unsightly debris”. When I explained there was no possible way that the car was visible to ANYONE, I was informed the county was using “satellite imagery” for enforcement.
However, they were “gracious” enough to give me 3 options: 1) Get rid of the vehicle 2) Get the vehicle in running condition and license and insure it or 3) Build an extra garage to store it in. (Of course contingent upon the county’s approval, paid permits, fees, inspections, etc….)
We ended up storing it in our 2-car garage with my truck sitting outside until we sold our home and moved.

Isn't that comforting?
They could be using a satellite to look at your home right now and you would never even know it.
Our country is becoming crazier all the time.
Sadly, even those that are supposed to be the "cream of the crop" are completely and totally insane as well.
Just look at all the corruption on Wall Street. As this chart shows, when debt levels in America go up, so do the earnings of the Wall Street bankers. They don't care that the debt bubble that they are creating is going to destroy the financial system. All they care about is the big bonus checks that they are going to get at the end of the year.
The big banks run up ridiculous levels of debt and leverage at their own firms because they know that if they guess right, they will win big, and if they guess wrong the taxpayers will bail them out because they are "too big to fail".
Our financial system has become a gambler's paradise. It is a gigantic casino where the crazy and the corrupt place massive bets that are so large they would blow the minds of most average Americans.
But very few places are insane as Washington D.C. is.
It has been said that the American people are going to get the government that they deserve, and that definitely appears to be true.
One of our major political parties is being led by a legendary con artist who appears to be completely and totally incompetent and the other major political party is being led by a man that would literally say almost anything in order to win an election.
Once there was a famous song that included the following line....

Clowns to the left of me, Jokers to the right

Unfortunately, that is a perfect description of U.S. politics today.
And the guy occupying the White House is barely even qualified to run a Dairy Queen.
The following is what Barack Obama recently said was his goal for the U.S. economy....

"I laid out a blueprint for an economy that's built to last, that has a firm foundation. Where we're making stuff and selling stuff and moving it around and UPS drivers are dropping things off everywhere."

And he is supposed to be one of the great orators of our time?
Barack Obama seems to know next to nothing about our economic system. Perhaps that is why he nominated Ben Bernanke for another term as the head of the Federal Reserve despite the fact that Bernanke had a track record of failure that would make the Washington Generals look good.
This week, Bernanke promised Congress that the Federal Reserve will protect the U.S. economy from whatever happens next....

"We are in frequent contact with European authorities, and we will continue to monitor the situation closely and take every available step to protect the U.S. financial system and the economy"

Talk about delusional! Bernanke is not going to be able to protect us from what is coming.
But Bernanke is a perfect example of the modern American. We tend to think that we know it all, and yet the rest of the world is just laughing at us.
Sadly, just electing the right person to be president is not going to fix what is wrong with this country.
The entire nation is literally going insane.
We need to understand what has happened to us, turn around, and start doing the things that once made us great.
So what do all of you think?
Is there much hope for America?
Please feel free to leave a comment with your opinion below....