Power & Market

Democrats Ignore Trump's Real Violations

02/12/2020Ron Paul

This week the latest Democratic Party attempt to remove President Trump from office—impeachment over Trump allegedly holding up an arms deal to Ukraine—flopped. Just like “Russiagate” and the Mueller investigation, and a number of other attempts to overturn the 2016 election.

We’ve had three years of accusations and investigations with untold millions of dollars spent in a never-ending Democratic Party effort to remove President Trump from office.

Why do the Democrats keep swinging and missing at Trump? They can’t make a good case for abuse of power, because they don’t really oppose Trump’s most egregious abuses of power. Congress, with a few exceptions, strongly supports the president flouting the Constitution when it comes to overseas aggression and shoveling more money into the military-industrial complex.

In April 2018, President Trump fired one hundred Tomahawk missiles into Syria, allegedly as punishment for a Syrian government chemical attack in Douma. Though the US was not under imminent threat of attack, Trump didn’t wait for a Congressional declaration of war on Syria or even an authorization for a missile strike. In fact, he didn’t even wait for an investigation of the event to find out what actually happened! He just decided to send a hundred missiles—at a cost of hundreds of millions of dollars—into Syria.

We are now finding out from whistle-blowers on the UN team that investigated the alleged attack that the report blaming the Syrian government was falsified and that the whole “attack” was nothing but a false flag operation.

Is such unauthorized aggression against a country with which we are not at war not worth investigating as a potential “high crime” or “misdemeanor”?

Last month, President Trump authorized the assassination of a top Iranian General, Qassim Soleimani, and a top Iraqi military officer inside Iraqi territory while Soleimani was on a diplomatic mission. Trump and his administration tried to claim that the attack was essential because of an “imminent threat” of a Soleimani attack on US troops in the region.

We found out shortly afterward that they had lied about the “imminent threat.” The assassination was not “urgent”—it was planned back in June. Trump then claimed that it didn’t matter whether there was an imminent threat: Soleimani was a bad guy so he deserved to be assassinated.

But the attack was an act of war on Iran without a congressional declaration or authorization for war. Is that not perhaps a “high crime” or “misdemeanor”?

We are finding out that, contrary to what Trump claims, Soleimani was not even behind the December attack on US troops in Iraq. New evidence suggests that it was actually an ISIS operation attempting to goad the US into moving against Iraq’s Shi'a militias.

Fantasies about Trump being an agent of Putin or trying to get Ukraine to help him win the election are presented as urgent reasons Trump must be removed from office. Real-life violations of the Constitution and the reckless militarism that may get us embroiled in another Middle East war are shrugged off as “business as usual” by both Democrats and Republicans in Washington.

Democrats won’t move against Trump for what may be real “high crimes” and “misdemeanors,” because they support his overseas aggression. They just wish they were the ones pulling the trigger.

Reprinted with permission from the Ron Paul Institute.

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Draft Concerns Crashed the Selective Service Site

Last week after the military drone strike in Iraq, an influx of young people went to the Selective Service website to find information about the draft. So much so that the draft website reportedly crashed from the surge. Google searches also are said to have increased by 900 percent for searches on “Is there going to be a draft.” While there has not been a draft since the Vietnam War, the reality is a draft could happen at any time and on the government's whim, as Rothbard pointed out:

Every youth is forced to register with the selective service system when he turns eighteen. He is compelled to carry his draft card at all times, and, at whatever time the federal government deems fit, he is seized by the authorities and inducted into the armed forces. There his body and will are no longer his own; he is subject to the dictates of the government, and he can be forced to kill and to place his own life in jeopardy if the authorities so decree. What else is involuntary servitude if not the draft?

Not only are you conscripted to serve your government even against your own free will, but if you refuse or fail to comply you could face a felony, as the Selective Service website points out:

Failing to register or comply with the Military Selective Service Act is a felony punishable by a fine of up to $250,000 or a prison term of up to five years, or a combination of both. Also, a person who knowingly counsels, aids, or abets another to fail to comply with the Act is subject to the same penalties.

The government asks our youth to sign up for the Selective Service on the day they become “adults.” Indeed, they are mandated at the age of eighteen to possibly be called to kill and murder in a war and possibly die themselves, and yet our government also believes our youth are not responsible enough to make the decision to not drink or smoke, since the smoking age has been raised to twenty-one years old. The simple truth is the government thinks that they own our bodies, and they will happily sit behind a desk in safety while they use you as cannon fodder.

However foul the Selective Service is, there is a far more detestable form once you reach the army. As Rothbard noted:

While conscription into the armed forces is a blatant and aggravated form of involuntary servitude, there is another, far more subtle and therefore less detectable form: the structure of the army itself. Consider this: in what other occupations in the country are there severe penalties, including prison and in some cases execution, for “desertion,” i.e., for quitting the particular employment? If someone quits General Motors, is he shot at sunrise?

So why do we subject our youth to our very real Hunger Games, where if their number is called they must fight to the death and may the odds be ever in their favor? Why in 2020 should the military be unable to operate free of involuntary slavery when it has been able to do so since July 1, 1973?

If history is our guide, we might expect a reinstatement of the draft to have profound societal effects. Consider the antiwar movement of the 1960s, during the previous “draft.” Now, consider the antiwar movement of today, during a time of an “all-volunteer” military, when military service is elective and by choice, when people don’t necessarily have skin in the game. Should the draft return, and young people face the prospect of mandatory service, what will the social repercussions be? Further division or people realizing they have very real skin in the game?

The government claims to be a representative government. Yet, how many of us disagree with its policies? How many not only disagree but find its policies and actions illegal? For them, it is bad enough that the government should commit crimes in their name; however, should a draft be enacted, now those same objecting individuals will face the prospect of becoming slaves to what they sincerely perceive to be a criminal enterprise, and thereby helping with their own labor to commit crimes against their own will.

In another article, I noted the use of conscientious objection and once again I ask, “Is Patriotism defined as blind obedience to governmental authority? Can saying ‘no’ be more heroic than saying ‘yes,’ when your conscience tells you it's wrong that the Government requires innocent blood on your hands?” If war is murder, what does this mean for a silently objecting person’s soul to become part of a killing machine rather than consciously objecting? Even if their job is removed from the front lines, at the end of the day the war rages, people are murdered, and they played their part contributing to the war/murder effort.

The obvious answer to all of this is, the draft should be abolished unfortunately, things won’t change until the public demands it. As Jeff Deist said not very long ago,

We need an anti-politics movement just as surely as we need an antiwar movement.

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Dave Smith One-on-One with Jeff Deist

On the latest episode of Part Of The Problem, Dave Smith continues his Wednesday One-on-One interview series with Jeff Deist. Jeff and Dave discuss D.C. as "Hollywood for ugly people," Ancapistan (and how that would work in a real world setting), the future of religion in western society, and how the Fed may be responsible for lower birthrates.

Part of the Problem is available on YouTube, Google PlayApple Podcasts, and Stitcher.

Part of the Problem #501 - Jeff Deist, of The Mises Institute (Audio Fixed)

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Don't Let Bernie's Craziness Distract from Warren's Radical Tax Plans

Social Security is projected to consume an ever-larger share of America’s national income, mostly thanks to an aging population.

Indeed, demographic change is why the program is bankrupt, with an inflation-adjusted cash-flow deficit of more than $42 trillion.

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Yet Senator Elizabeth Warren wants to make a bad situation even worse.

In a blatant effort to buy votes, she is proposing a radical expansion in the old-age entitlement program. Here’s how USA Today describes her proposal.

Warren’s strategy would make major changes to Social Security, boosting benefits for all and imposing new taxes on high-income earners to finance them. …Under the proposal, everyone would get a $200 increase in monthly payments from Social Security, including both retirement and disability benefits. 

…Certain groups would see even larger increases. …In order to cover these benefits and shore up Social Security’s future finances, Warren would impose two new taxes. First, a new payroll tax would apply to wages above $250,000, with employees paying 7.4% and employers matching with 7.4% of their own. This is above the 6.2% employee rate that applies to current wages up to $132,900 in 2019, …Second, individual filers making more than $250,000 or joint filers above $400,000 would owe a heightened net investment income tax at a rate of 14.8%. …The Warren proposal breaks new ground by largely disconnecting the benefits that Social Security pays from the wages on which the program collects taxes.

In a column for the Wall Street Journal, John Cogan of the Hoover Institution explains why the proposal is so irresponsible.

It’s a strange campaign season, loaded with fantastical promises of government handouts for health care, college and even a guaranteed national income. But Sen. Elizabeth Warren ’s Social Security plan takes the cake. With trillion-dollar federal budget deficits and Social Security heading for bankruptcy, Ms. Warren proposes to give every current and future Social Security recipient an additional $2,400 a year. She plans to finance her proposal, which would cost more than $150 billion annually, with a 14.8% tax on high-income individuals. …the majority of Ms. Warren’s proposed Social Security bonanza would go to middle- and upper-income seniors. …The plan would cost taxpayers about $70,000 for each senior citizen lifted out of poverty.

Cogan also explains that Warren’s scheme upends FDR’s notion that Social Security should be an “earned benefit.”

The cornerstone of FDR’s Social Security program is its “earned right” principle, under which benefits are earned through payroll-tax contributions. …in a major break from one of FDR’s main Social Security principles, the plan provides no additional benefits in return for the new taxes. …Such a large revenue stream to fund unearned benefits, aptly called “gratuities” in FDR’s era, would put Social Security on a road to becoming a welfare program. …Ms. Warren’s proposal returns the country to an era when elected officials regularly used Social Security as a vote-buying scheme.

For all intents and purposes, Warren has put forth a more radical version of the plan introduced by Congressman John Larson, along with most of his colleagues in the House Democratic Caucus.

And that plan is plenty bad.

Andrew Biggs of the American Enterprise Institute wrote about the economic damage it would cause.

…the Social Security 2100 Act consists of more than 100% tax increases – because it not only raises payroll taxes to fund currently promised benefits, but increases benefits for all current and future retirees. …Social Security’s 12.4% payroll tax rate would rise to 14.8% while the $132,900 salary ceiling on which Social Security taxes apply would be phased out. Combined with federal income taxes, Medicare taxes and state income taxes, high-earning taxpayers could face marginal tax rates topping 60%. …Economists agree that tax increases reduce labor supply, the only disagreement being whether it’s by a little or a lot. Likewise, various research concludes that middle- and upper-income households factor Social Security into how much they’ll save for retirement on their own. If they expect higher Social Security benefits their personal saving will fall. Since higher labor supply and more saving are the most reliable routes to economic growth, the Social Security 2100 Act’s risk to the economy is obvious. …an economic model created by a team based at the University of Pennsylvania’s Wharton School…projects GDP in 2049 would be 2.0% lower than a hypothetical baseline in which the government borrowed to fund full promised Social Security benefits. The logic is straightforward: when taxes go up people work less; when Social Security benefits go up, people save less. If people work less and save less, the economy grows more slowly.

And the Wall Street Journal opined about the adverse impact of the proposal.

Among the many tax increases Democrats are now pushing is the Social Security 2100 Act sponsored by John Larson of House Ways and Means. The plan would raise average benefits by 2% and ties cost-of-living raises to a highly generous and experimental measure of inflation for the elderly known as CPI-E. The payroll tax rate for Social Security would rise steadily over two decades to 14.8% from 12.4% for all workers, and Democrats would also apply the tax to income above $400,000. …The proposal would also further tilt government spending to the elderly, who in general are doing well. …Democrats are also sneaky in the way they lift the income cap on Social Security taxes. The Social Security tax currently applies only on income up to $132,900, an amount that rises each year with inflation. But the new payroll tax on income above $400,000 isn’t indexed to inflation, which means the tax would ensnare ever more taxpayers over time. …The new 14.8% Social Security payroll-tax rate would come on top of the 37% federal income-tax rate, plus 2.9% for Medicare today (split between employer and employee), plus the 0.9% ObamaCare surcharge on income above $200,000 and 3.8% surcharge on investment income. …As lifespans increase, the U.S. needs more working seniors contributing to the economy. Yet higher Social Security benefits can induce earlier retirement if people think they don’t have to save as much. Higher marginal tax rates on Social Security benefits and income also discourage healthy seniors from working.

Now imagine those bad results and add in the economic damage from a 14.8 percentage point increase in the tax burden on saving and investment, which is the main wrinkle that Senator Warren has added.

Last but not least, using Social Security as an excuse to push higher taxes is not a new strategy. Back in 2008 when he was in the Senate and running for the White House, Barack Obama proposed a Warren-style increase in the payroll tax.

Here’s a video I narrated that year, which discusses the adverse economic effect of that type of class-warfare tax hike.

By the way, Hillary Clinton supported a similar tax increase in 2016.

Though it’s worth noting that neither Obama nor Clinton were as radical as Warren since they didn’t propose to exacerbate the tax code’s bias against saving and investment.

And don’t forget she also wants higher capital gains taxes and a punitive wealth tax.

Sep-19-19-Ch-Chart.jpg

Her overall tax agenda is unquestionably going to be very bad news for job creation and American competitiveness.

The “rich” are the primary targets of her tax hikes, but the rest of us will suffer the collateral damage.

P.S. Instead of huge tax increases, personal retirement accounts are a far better way of addressing Social Security’s long-run problem. I’ve written favorably about the Australian system, the Chilean system, the Hong Kong system, the Swiss system, the Dutch system, the Swedish system. Heck, I even like the system in the Faroe Islands.

Originally published at International Liberty

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Democrats and Republicans Team Up to Send Federal Spending to New All-Time Highs

09/06/2019Ryan McMaken

This summer's budget deal, negotiated by Nancy Pelosi and Donald Trump made few headlines. And that's exactly how these power brokers wanted it.

According to The Hill:

The new law suspends the debt ceiling through July 2021, removing the threat of a default during the 2020 elections, and raises domestic and military spending by more than $320 billion compared to existing law over the next two fiscal years.

Anxious to avoid a budget debate which Trump obviously thought he couldn't win, the President quickly signed a new agreement to keep federal spending growing quickly into the future.

Democrats crowed:

Importantly, Democrats have achieved an agreement that permanently ends the threat of the sequester ... With this agreement, we strive to avoid another government shutdown, which is so harmful to meeting the needs of the American people and honoring the work of our public employees.

Trump, in his usual unwarranted hyperbole, called the deal "phenomenal."

In nominal terms, spending has gone up relentlessly since Republicans gained control of both the White House in Congress in 2016. The Democratic takeover of the House has, not surprisingly, done nothing to stop the spending juggernaut.1

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The budget deal ensures defense spending will go up for the sixth year in a row.2 Spending will hit a new all-time high in 2019, and will surpass a trillion dollars in 2020.

Growth is less impressive when adjusted ot the CPI. In 2018 dollars, defense spending will be just about back to the previous all-time high reached in 2011, hitting 989 billion in 2020. Welfare programs such as Medicare and Social Security all continue to reach new all-time highs nearly every year, with the exception of non-Medicaid poverty programs, such as TANF. Those programs have seen cuts in recent years.

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From 2017 to 2020, the OMB estimates (in 2018 dollars) growth rates in each area as:

  • Defense: 16 percent
  • Soc Sec: 10.4 percent
  • Medicare: 8.1 percent
  • Healthcare such as Medicaid: 8.9 percent
  • Other Poverty-Related Programs: -3.7 percent

Not surprisingly, the Trump administration has shown little inclination toward cutting or even moderating federal spending. Republicans had total control of Congress and White House during 2017 through early 2019, but total federal spending increased at sizable rates.

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In fact, the sort of spending we saw in the 2019 fiscal year (which ends this month) and which is expected in 2020, is the type of spending we haven't seen since the wake of the 2008 financial crisis when the federal government greatly expanded spending in the name of "stimulus."

But, as I noted here, the Trump administration's budgets are huge — with growing deficits — during a period of economic expansion. That is, even orthodox Keynesians might counsel slowing spending growth under current conditions, because stimulus is expected when recession hits. But the federal government is now going full bore into recession-type spending, even though there's no recession (yet.)

So, expect spending growth and deficits to become even more astronomical when the economy shows greater signs of slowing.

  • 1. See table 3.2 covering federal functions and subfunctions from the Office of Management and Budget. Functions included in this article include 050, 550, 570, 600, 650, 700, and 750.  https://www.whitehouse.gov/omb/historical-tables/.
  • 2. Defense spending here includes all "national defense" spending, plus veterans benefits, plus "Administration of Justice" funds, such as those going to the FBI which now describes itself as a national security organization. See Table 3.2 in OMB estimates.
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Debunking Vox's Article on "Debunking Economic Laws"

08/07/2019Per Bylund

Vox is a never-ending fountain of ignorance. Like this piece about four 'laws' of economics that are simply wrong. Some of these claims are indeed wrong, but it's also wrong to claim that economists make them.

Let's look at each one.

1) Going below the natural rate of unemployment could spark an inflationary spiral.

I have no idea how the writer could think this is an "iron law" (his term) yet includes the words "could spark." How is that a law at all?

2) Everybody wins with globalization.

No, economists don't claim this. Globalization is a win, but there are transitional pains and reallocations of resources. Jobs in inefficient industries go away, jobs are created where labor is more valuable.

3) Deep budget deficits will crowd out private investment.

Another strange misrepresentation. Why would anyone think budget deficits crowd out private investment? It's not the deficit doing this, but government investments--whether or not financed by budget deficits.

4) A higher minimum wage will only hurt workers.

Of course the author refers to the one study that found a case where this appears to not have happened. Yet it's still a misunderstanding, because minimum wage laws (set above the market wage) cause fewer jobs than there otherwise would have been. It doesn't mean people will be laid off en masse, only that jobs aren't created in such numbers as would otherwise have happened. You have to be a progressive to not see this. And then, of course, you will refer to (widely criticized) study by Alan Krueger as though there are not hundreds, if not thousands, studies showing exactly what theory tells us: that forcing employers to pay workers more than they contribute to the bottom line means those workers won't get the jobs. (If this logic seems odd, it's because you're not thinking logically.)

Formatted from Twitter @PerBylund
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Don't Trust the Government with the Environment

07/04/2019Gor Mkrtchian

The state is often assumed to be nature’s default, benevolent caretaker. Government agencies are free from the short-sighted profit motive, we are told, and can steward land for the long term. If only this were true. In fact, in a myriad of ways, governments are among the worst polluters in the world, and even the agencies of the state specifically devoted to environmental stewardship have themselves helped cause environmental disasters.

Land Use Planning and Subsidies

For environmental and aesthetic reasons, many believe that mass transit options like railways, as well as pedestrian routes, aren’t widespread enough in the U.S., and that Americans are too reliant on smog-emitting cars. They may be surprised to find one major culprit hidden in plain view. The state has long used tax dollars to build and maintain approximately 2.8 million miles of paved roads and highways in the U.S., subsidizing urban sprawl and automobile use, and hence undermining the market viability of substitutes like mass transit and walking.

Without tax-funded provision of roads and highways, had private enterprise had to consciously pay for each new mile of road — not to mention the sewer, gas, water, and electricity lines that suburbs require — land resources and transport would be markedly different. Cities may have instead been more compact, leaving more wilderness untrammeled. Public transportation may have been more widespread. Cities may have also been connected to one another to a greater degree by (privately-owned) trains rather than by today’s interstate highway system.

It’s impossible to know what the counterfactual world would have looked like, but it’s reasonable to assume that had the state not used tax money to fund 2.8 million miles of a particular form of transportation (paved roads and highways), then competing forms (railways, pedestrian routes), which have been subsidized to a lesser extent, would have been more prevalent.

The Military as Prime Polluter

The military provides another outlet through which the state corrodes the environment. According to Alexander Nazaryan:

The U.S. Department of Defense is one of the world's worst polluters. Its footprint dwarfs that of any corporation: 4,127 installations spread across 19 million acres of American soil. Maureen Sullivan, who heads the Pentagon's environmental programmes, says her office contends with 39,000 contaminated sites.

The purpose of the military, of course, is not to steward natural resources. So how do agencies which are dedicated to husbandry fare?

Mis-Managing Natural Resources

The four largest federal land management agencies in the U.S. are the Bureau of Land Management, Fish and Wildlife Service, National Park Service, and Forest Service. For the 2018 fiscal year, their total maintenance project backlog was an estimated $19.38 billion. The National Park Service was responsible for the bulk of this figure with $11.92 billion of delayed projects, compared to a 2016 annual budget of about $3 billion.

In addition to the inability to implement planned maintenance on schedule, federal land management has suffered from failure to formulate adequate policies to begin with. Over 1.2 million acres of California burned in wildfires in 2017, followed by over 1.8 million acres in 2018. National Forest Service policy had a direct role in the contributing to the problem. According to Robert Nelson:

Nineteen million acres of California forests—almost 20 percent of the state’s total land area—are owned and managed by the federal government. The fires are in significant part the product of past federal forest mismanagement.

The Forest Service policy of total fire suppression, in place for most of the 20th century, meant California's national forests contained large volumes of kindling-like small trees and underbrush. Before the Forest Service embarked on its crusade to suppress them, frequent but much smaller fires routinely removed these "excess fuels" while leaving the larger trees little affected.1

After helping set the stage for the fires, bureaucratic impotence failed to contain them:

Federal land management agencies remain mired in gridlock and dysfunction. This past summer, the Forest Service itself acknowledged that "catastrophic wildfires and the corresponding loss of lives, homes, and natural resources have continued to grow, partly because our treatments have been uncoordinated and not at the right scale."2

It’s difficult to imagine a private land conservation trust or forestry company being so inept as to allow millions of dollars of its own assets burn to the ground year after year, let alone in a way that resulted in the destruction of other people’s lives and property. This is true, in part, because private owners are legally and financially responsible for their actions. Employees of the National Forest Service, meanwhile, lose nothing as a result of decades of a ruinous total fire suppression policy. The taxpayers paid for the bureaucrats' mistakes — and also paid their salaries.

Communist Disasters

Given that we're often told government-planned economies are better for the environment, sure the centrally-planned Soviet Union preserved a pristine paradise within its borders? Unfortunately, the Soviets had a cartoonishly bad environmental record. To name just one example: the Aral Sea used to be the fourth largest lake in the world. Then, Stalin diverted its two major contributing rivers for crop irrigation, and now the Aral Sea — and all its surrounding ecosystems are now almost totally dried up and destroyed.

And then there are the rivers. In the 1971 New York Times article “Why Does the Volga Catch Fire?” Marshall I. Goldman comments on the five-year plan for 1971-1975, “Nothing is said about reducing the oil content of the Iset and Volga Rivers which have a tendency to catch fire so, that periodically fire men are called ‘to put out the river.’3 Most famously, the Soviet Chernobyl nuclear power plant meltdown resulted in a 1,000 square mile radioactive exclusion zone.

Why is the government such a terrible steward of the environment? Why not? When a government agency fails, it is declared to be “underfunded” and the outcry is for the agency in question to be trusted with more money and responsibility, not less. It hard to see why governments would have any incentive to change the status quo.

  • 1. Robert Nelson, “The Case Against the Case for Federal Land Management,” Reason, reason.com, 2019.
  • 2. Ibid.
  • 3. Marshall I. Goldman, “Why Does the Volga Catch Fire?” The New York Times, 1971.
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Don't Mess with the Swiss

07/02/2019Eric Margolis

Morgarten, Switzerland – Here, in 1315, a force of Swiss mountaineers ambushed an invading force of Austrian feudal knights who had come to reassert Hapsburg feudal rule over the rebellious Swiss.

The burly Swiss farmers and woodsmen from the forest cantons Unterwalden, Uri, and Schwytz fell upon the close-packed Austrian knights and men-at-arms, using long pikes or deadly pole axes known as halbards, and massacred them without quarter.

Two years later, a second Austrian expeditionary force was caught by the Swiss peasant infantry near Lucerne at Sempach and crushed.

These fierce battles were the first time in modern history that foot soldiers had withstood heavily armored mounted knights.  These epochal encounters marked the beginning of the end of European feudalism and the rise of infantry armies.  They also freed Switzerland’s forest cantons of Austrian rule, creating Europe’s first independent democratic state, the Swiss Confederation.

The always astute Machiavelli said of the Swiss warriors: ‘Most heavily armed, most free.’  Indeed, most free to this day.

Those who think of Switzerland as a quaint land of cuckoo clocks and chocolate are sorely mistaken.  To paraphrase Voltaire’s bon mot about Prussia, Switzerland is a giant fortress, disguised as a country.

I attended school and university in Switzerland.  Over the decades, I kept hearing about mountains opening up to disgorge warplanes, or cliffs studded with hidden artillery.  But even my Swiss friends didn’t know much about these seemingly fantastic sightings.

Fifteen years ago, I was the guest of the Swiss Fortress Guard Corps, a top-secret military outfit that operates Switzerland’s mountain fortresses.  I was one of the first non-Swiss to be shown the mountain forts that guard the heart of the nation’s ‘Alpine Redoubt.’  What I was shown astounded me – and continues to do so.

In the late 1930’s, as one European nation after another bowed down to Hitler’s demands, the Swiss military and its popular rifle clubs, banded together and decided their nation would not bend the knee as the Czechs, Dutch, Norwegians, Belgians, and then the French had done.

A feverish program of fortress construction was begun across the Alps.  Some 900,000 troops were mobilized. Orders went out from Gen. Henri Guisan: ‘leave your families behind in the lowlands.  Man our mountain forts.  We have no place or food for civilians in them.   Fight to your last cartridge; then use your bayonets. No surrender!’

Every road and bridge was mined; all mountain passes were rigged with explosives.  Particularly so the rail lines and tunnels that linked Germany to its erstwhile ally, Italy.

Hitler was furious.  He denounced the Swiss as ‘insolent herdsmen.’  Mussolini, Hitler’s ally, rightfully feared tangling with the tough Swiss mountaineers who had ravaged Italy during the Renaissance.  The Pope’s Swiss Guards are a memento of the era of ‘Furia Helvetica.’

Working 24/7, Swiss engineers created a warren of tunnels and gun positions guarding the main entry points into Switzerland at St. Maurice, Gothard, Thun and Sargans.  These forts were equipped with 75, 105, and 150mm cannons, machine guns and mortars emplaced in mountain sides and camouflaged so they are almost invisible.

Inside the forts are barracks, engine rooms, headquarters, clinics, observation posts and magazines filled with shells.  The hidden forts interlock their fire and support one another.  Unlike the less heavily gunned Maginot Line, each fort was protected by a special infantry unit on the outside, linked by telephone to the underground garrison.

In addition, Switzerland built bomb shelters for most of its people.

The Swiss only began decommissioning their forts in the 1990’s – after the collapse of the Soviet Union.  Switzerland was a prime target of the Soviet Red Army.  Advancing from Czechoslovakia, the Soviets planned to race across lightly defended Austria into eastern Switzerland.

Then, into the Swiss lowlands on a Basel-Neuchatel-Lausanne axis to Geneva.  From there, the Group of Soviet Forces powerful armored divisions would erupt into France’s Rhone Valley and drive north for the Channel ports, taking US and NATO forces in the rear and cutting their supply lines.  It would have been a replay of Germany’s brilliant Ardennes offensive in 1940.

But Swiss forts and solid Swiss citizen troops stood in the way.  The sons of the heroes of Sempach and Morgarten were on guard.

When Swiss mountaineers vote, they always carry rifles and swords as a symbol of how their freedom was attained and preserved.

Originally published at LewRockwell.com
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Decentralization as the Bridge to a More Libertarian Society

The state and its evils are but the shadow cast by public opinion, and this is why advocates for freedom and free markets put so much emphasis on education. We focus on spreading the arguments about the workings of the profit motive versus bureaucratic management, state monopolies versus free competition, international trade versus protectionism and so forth. But we also know that a libertarian is not made overnight. Ask anyone, and the tale of how they became a libertarian usually involves reading numerous books, and often having long conversations with those who are already convinced of the value and virtue of liberty. In short, going through a months and years-long conversion process of learning, reading, and overturning previous convictions and beliefs one after another.

Therefore, as salespeople of liberty, our conversion process might literally take many years to come to fruition. That should give us a pause. This is because we cannot make strides towards a free society by relying solely on the ideological war through arguments. Once again, these arguments are indispensable for the deconstruction of any statist proposition, but they seem to be insufficient for a positive program for liberty, especially one that has the potential to win over a majority in any democratic election.

The solution for this, I believe, is to put much more emphasis on the cause of decentralization. In short, we do not push for political decentralization hard enough.

To reiterate the argument for decentralization in the shortest possible form: the greater the degree of political decentralization in a given territory, the easier it will be for the populace to move if one government becomes ever-increasingly tyrannical. And as governments seek to retain their tax base, decentralization imposes a natural limit on state power.

[RELATED: "What Must Be Done" by Hans-Hermann Hoppe]

Often, the basic premise here can be phrased as follows: you and I may have different ideas about how to organize society to achieve the best conditions for all its members. If you believe that your ideas will bring about the best, most livable system, and if I believe the same about my convictions, why not put both of them to test? Instead of a top-down system of politics, why not have a competition of free cities, communities, districts, states and counties, each of them free to implement the policies they deem to be the best, and the rest, seeing the resulting increase in living standards, will be incentivized by those who would vote with their feet to follow them.

To implement the political program of decentralization requires only one simple step — a mere constitutional amendment — that can be effected in every country of the world: If the majority of the inhabitants of a village, town, district or a city express in a freely conducted plebiscite their opposition to any given law ratified by local, state or federal governments, they are to be exempt from the jurisdiction of that law.

One need not be a libertarian to see the value of such a decentralist program. Indeed, this is arguably the only program which has the potential to unite just about everyone globally, whether they be left or right, capitalist or socialist or anything in between under a single worldwide decentralist movement of self-determination to liberate every community, so they may shape their society according to their own values, instead of those imposed on them by the might of the centralized, leviathan state.

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Does the US Need a Rate Cut? No!

06/17/2019Daniel Lacalle

Consumer confidence is high, unemployment is low and Treasuries’ yield is at 2.1%, while credit to the economy and corporate financing are not suffering.

The weakness in core consumer prices in May, which increased by only 0.1 %, was entirely due to lower prices of used vehicles, and core CPI inflation remains within the Fed target, falling from 2.4% in mid-2018 to 2.0% in May. Headline CPI inflation fell to 1.8% in May due to lower energy prices, so there is absolutely no logic in a rate cut. With unemployment at 3.6%and annualized GDP growth expected to remain above 2.3%, demands for a rate cut are only an excuse to keep financial asset prices higher at any cost

There are some elements that point to a slight weakness in the economy but no need for a rate cut.

  • Industrial production rose 0.4% m/m in May while it stalled in other global economies.
  • A strong 0.5% rise in underlying retail sales in May, along with upward revisions to previous months’ gains which means consumption is likely to grow close to 4% annualized in the second quarter.
  • The headline confidence index declined marginally to 97.9 in June, from 100.0, but remains at very high levels.

A rate cut would only fuel the debt bubble further, and leave the Fed with fewer tools to address a slowdown. When so-called “High Yield” means 365 bps for junk bonds of companies close to bankruptcy and Treasuries yield 2.1% there is no reason at all to cut rates. Rather the opposite.

The debt bubble is dangerously inflated and lower rates would only make it worse. The ratio of US corporate debt to GDP, as well as the high-risk loan figure and securitized debt,  have risen to pre-crisis levels.  US deficit is rising because spending soars and the government finds debt cheap and abundant. Government spending rose to $440 billion in May 2019, up 21% from May of 2018. Yes, up 21% from May of 2018. All this despite record revenues. Receipts increased to $232 billion, up 7% from the same month last year.

A rate cut would only create a larger problem in the future. If the already dangerous corporate and sovereign debt bubble grow significantly more, no monetary policy will prevent a debt crisis.

Daniel Lacalle | Fed rate cut less likely than expected

Republished from DLacalle.com
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