Power & Market

Elizabeth Warren’s 2020 presidential aspirations may have ended before they began this week thanks to her team’s bizarre decision to proudly broadcast the results of a DNA test that shows she may have had a relative 10 generations removed that was of indigenous American heritage. As Senator Warren was once promoted as “Harvard Law School's...first woman of color,” the results seem to only confirm that she misrepresented her ancestry in her past career as a law professor.

Not only has the decision been met with a blistering condemnation from the Cherokee Nation, but it has once again made her the butt of President Trump’s jokes.

Lost in the laughing at Warren’s expense however, is a larger issue exists over how American politicians continue to treat tribal sovereignty.

After all, if Warren had used her position as senator to serve as an advocate for the Cherokee Nation’s right to self-determination, her history of misrepresenting her genetic connection to the tribe would perhaps be more excusable. Say what you will about Rachel Dolezal, she at least cared enough to be an advocate for the African American community. Instead, Warren’s political record is one that has regularly promoted the continued imperial rule of Washington on land that is tribal in name only.

Though never officially serving as the head of the Consumer Financial Protection Bureau, Warren has been widely credited as being the guiding force behind the creation of the agency. The CFPB was created as part of the Obama Administration’s response to the financial crisis, a powerful financial regulator that lacks the traditional checks of other executive agencies. Under the lead of former director Richard Cordray, the CFPB went to work becoming a heavy handed regulator in its fight against "unfair, deceptive and abusive” practices.

Soon, various tribal financial services businesses found themselves in the cross hairs of the enthusiastic CFPB. The result is that the agency has been described by Dr. Gavin Clarkson, a tribal finance expert, as “the most hostile federal agency towards Indian tribes since Indian Affairs was in the War Department.”

One example is a variety of short-term lending operations that various tribes started up to try to capitalize on the growth of e-commerce. In theory, tribal sovereignty should have given these ventures a competitive advantage over other US lenders who had to deal with the Washington red tape. Unfortunately Obama’s Justice Department decided these operations represented a “national security risk” and worked with the CFPB to shut them down as part of Operation Choke Point – in spite of pleas from tribal advocates that doing so would be economically devastating.

While it would be unfair to blame Elizabeth Warren for any and all actions taken by the CFPB and DOJ, she served as a primary defender of Operation Choke Point when legislative pressure mounted to end it.

Similarly, she has been the chief voice in the Senate attacking the pay day lending industry, which became a point of particular emphasis under the Cordray CFPB. This has put the Warren-Cordray camp into ongoing legal conflict with various tribes over whether federal financial regulation should apply to tribal land, leading the CFPB to sue various tribal lenders.

While the Supreme Court refused to take up the case, which could have provided a legal precedent in favor of tribal sovereignty, the suit was eventually dropped earlier this year after Mick Mulvaney took over as the CFPB’s acting head. Warren wrote a letter to Mulvaney criticizing the decision.

Warren’s indifference to the cause of tribal sovereignty appeared again this year with a vote on the Tribal Labor Sovereignty Act.  

The issue here was whether tribal-owned businesses should be forced to follow federal labor laws on collective bargaining. The issue has been a major one for a number of American tribes, upset that tribal governments are subjected to labor laws that state and federal governments are exempt from.

As Jefferson Keel, the President of the National Congress of American Indians, wrote in The Hill:

Sovereignty means tribes should be allowed to make their own decisions about their own workforce policies. The truth is that many tribal nations openly welcome labor unions into the businesses that they own; others choose not to. And a growing number have designed and enforce their own labor regulations. But the NLRB ignores all of this and, instead, forces tribal governments to adhere to the NLRA. Just us. No one else. This is a plain violation of our inherent rights as sovereign nations and governments.

Unfortunately Senator Warren’s loyalty lay with labor unions over tribal sovereignty, and she joined with 41 other Senators to successfully kill a vote on the bill.

While Warren has made it easy to laugh at about “fauxocahontas” and 1/1024^th memes, her political contempt for tribal self-sovereignty is what should make her false claims to Cherokee heritage truly insulting.

Elizabeth Warren and her fellow progressives believe Native Americans are better off following her rules, rather than granting tribes the political self-determination to make such decisions for themselves. It’s a form of ideological imperialism, driven by their own belief in their moral superiority and the belief on “the right side of history.” The progressive person's burden is to use to the power of the state to impose social justice, regulate “fairness” in the market, and impose egalitarian social norms. 

This is precisely why it’s important for those who recognize the dangers of federal overreach and political centralization should take the issue of tribal sovereignty so seriously. The goal for a more civil and free society should not be the aim of some grand universal political order, but a respect for political self-determination. To that end, a respect for tribal rights is just as important as any other fight in favor of political decentralization.

Aram Roston reports on how Mideast dictatorships now hire former US military personnel to form what are essentially death squads designed to eliminate the regimes' enemies:

The revelations that a Middle East monarchy [UAE] hired Americans to carry out assassinations comes at a moment when the world is focused on the alleged murder of dissident journalist Jamal Khashoggi by Saudi Arabia, an autocratic regime that has close ties to both the US and the UAE. (The Saudi Embassy in the US did not respond to a request for comment. Riyadh has denied it killed Khashoggi, though news reports suggest it is considering blaming his death on a botched interrogation.)

Golan said that during his company’s months-long engagement in Yemen, his team was responsible for a number of the war’s high-profile assassinations, though he declined to specify which ones.

Where do these kill teams come from and where do they get their training and experience? They get it from the US military and the US taxpayer.

Last month, I wrote on how the US military is becoming increasingly reliant on mercenaries to staff military operations. This makes it easier for the Pentagon to ratchet up military conflicts while still claiming that it is reducing boots on the ground. It can do this because the Pentagon doesn't report details on how many mercenaries it's using or where they are. Essentially, mercenary forces are a sort of human slush fund which allows the Defense Department more leeway in doing whatever it wants, while sharing precious little information about it with Congress or the taxpayers.

Thus, the US treasury subsidizes the creation of these mercenary forces that then become adjuncts of foreign governments. Roston concludes:

The long US wars in Afghanistan and Iraq have relied heavily on elite special forces, producing tens of thousands of highly trained American commandos who can demand high private-sector salaries for defense contracting or outright mercenary work.

He's right about that, but then makes a rookie mistake: he refers to the movement toward mercenaries as a "privatization" of war, saying, "War has become increasingly privatized, with many nations outsourcing most military support services to private contractors, leaving frontline combat as virtually the only function that the US and many other militaries have not contracted out to for-profit ventures."

I see this mistake made over and over, and everyone needs to stop calling this sort of thing "privatization." When the government hires a construction firm to build a government highway, is that "privatization" of the highway system? No one thinks that, and for good reason. Similarly, it is not privatization when a state — whether its the US government or the UAE — hires a private firm to execute some aspects of the government's wars. These wars are state-on-state wars. There may be some truly private organization at play, but they're on the receiving end of the mercenaries' violence.

Historically, we call private military forces "irregulars" or "guerrilla" forces. There's gray area there, but, broadly speaking, truly private military forces don't have a legally enforceable contract with an officially-recognized regime. They're often not loyal to any extant state, and they often don't even get paid by any organization recognized as a state.  Clearly, this doesn't describe these American mercenaries who likely have a signed contract with the UAE dictators, and money is paid in return for certain killings.

This is government money, spend on a private firm to carry out a government agenda. This is not privatization.

As the number of experienced American mercenaries continues to grow — thanks to 18 years of non-stop American wars, it will be interesting to see how many Americans military contractors have their hands in various assassinations, bombings, and other killings carried out on enemies of far off regimes.

September marked a decade since the bursting of the housing bubble, which was followed by the stock market meltdown and the government bailout of the big banks and Wall Street. Last week’s frantic stock market sell-off indicates the failure to learn the lesson of 2008 makes another meltdown inevitable.

In 2001-2002 the Federal Reserve responded to the economic downturn caused by the bursting of the technology bubble by pumping money into the economy. This new money ended up in the housing market. This was because the so-called conservative Bush administration, like the “liberal” Clinton administration before it, was using the Community Reinvestment Act and government-sponsored enterprises Fannie Mae and Freddie Mac to make mortgages available to anyone who wanted one — regardless of income or credit history.

Banks and other lenders eagerly embraced this “ownership society”’ agenda with a “lend first, ask questions when foreclosing” policy. The result was the growth of subprime mortgages, the rush to invest in housing, and millions of Americans finding themselves in homes they could not afford.

When the housing bubble burst, the government should have let the downturn run its course in order to correct the malinvestments made during the phony, Fed-created boom. This may have caused some short-term pain, but it would have ensured the recovery would be based on a solid foundation rather than a bubble of fiat currency.

Of course Congress did exactly the opposite, bailing out Wall Street and the big banks. The Federal Reserve cut interest rates to historic lows and embarked on a desperate attempt to inflate the economy via QE 1, 2, and 3.

Low interest rates and quantitative easing have left the Fed with a dilemma. In order to avoid a return to 1970s-era inflation — or worse, it must raise interest rates and draw down its balance sheet. However, raising rates too much risks popping what financial writer Graham Summers calls the “everything bubble.”

Today credit card debt is over a trillion dollars, student loan debt is at 1.5 trillion dollars, there is a bubble in auto loans, and there is even a new housing bubble. But the biggest part of the everything bubble is the government bubble. Federal debt is over 21 trillion dollars and expanding by tens of thousands of dollars per second.

The Fed is unlikely to significantly raise interest rates because doing so would cause large increases in federal government debt interest payments. Instead, the Fed will continue making small Increases while moving slowly to unwind its balance sheet, hoping to gradually return to a “normal” monetary policy without bursting the “everything bubble.”

The Fed will be unsuccessful in keeping the everything bubble from exploding. When the bubble bursts, America will experience an economic crisis much greater than the 2008 meltdown or the Great Depression.

This crisis is rooted in the failure to learn the lessons of 2008 and of every other recession since the Fed’s creation: A secretive central bank should not be allowed to manipulate interest rates and distort economic signals regarding market conditions. Such action leads to malinvestment and an explosion of individual, business, and government debt. This may cause a temporary boom, but the boom soon will be followed by a bust. The only way this cycle can be broken without a major crisis is for Congress both to restore people’s right to use the currency of their choice and to audit and then end the Fed.

Reprinted with permission.