End the Empire and Bring Home the Troops (Ron Paul on Bill Maher)

End the Empire and Balance the Budget

Neocon Advocate of "Empire" Praises Obama

Over at the neocon house organ, Commentary, Max Boot, best known for penning the infamous article, "The Case for American Empire," praises the Obama foreign policy team. Where can I get my "change" back?

Krugman's Prescription for Disaster

Paul Krugman calls for Obama and his advisors to push an expanded version of the New Deal (see the link below by Mark R. Hatlie). According to Krugman, they should boldly throw caution to the winds and “figure out how much help they think the economy needs, than add 50 percent. It’s much better in a depressed economy, to err on the side of too much stimulus.”

Obama should reject this advice. If he listens to Krugman, the likely result will be a wave of stagflation that makes the experience of the 1970s look mild by comparison. Such a prescription would both continue and accelerate Bush’s fiscally reckless policy of propping up malinvestments through massive increases in spending, deficits, and easy credit by the Federal Reserve. As the continuing fall of the stock market and the rise of unemployment indicate, more bailouts and more “shock socialism” do not work. Obama made a fatal mistake in failing to oppose the aptly described billionaire bailout.

This call for a hyper New Deal rests on a flawed view of history. According Krugman, the only reason Roosevelt failed to bring recovery was because he spent too little, not too much. At the same time, he tries to have it both ways by stating that the crisis of the 1930s would have been “much worse” without the New Deal.

A key problem with Krugman’s analysis is that it does not adequately explain why the decade-long New Deal era depression lasted so much longer than previous depressions. Prior to the 1930s, depressions (as in the sharp and short downturn of 1921 and 1922) had typically lasted for two to three years. The predominant anti-depression policy before Hoover and Roosevelt was to cut spending, balance budgets, and let prices, profits, and wages readjust to more sustainable levels. Yet Krugman regards this older approach for curing depressions as “much worse” than the New Deal. The logical implication of his argument is that the New Deal, modest as it was, would have made the Great Depression at least somewhat shorter than previous downturns. The fact that it did not stands as a stunning indictment of FDR’s policies.

The unprecedented duration of the depression also represents an indictment of Herbert Hoover’s approach. This was because Hoover intervened too much not, as Krugman would have it, too little. Krugman’s article neglects the relevant point that Hoover had pursued a mini-New Deal from 1929 to 1933 via programs such as the Reconstruction Finance Corporation and the Federal Farm Board. It was Hoover, not Roosevelt, who was the first president to reject the advice of the “leave it alone liquidationists.” Instead of letting malinvestments (or toxic assets in today’s parlance) readjust at a lower level, he desperately propped them up. In great part because of Hoover’s high wage policies, real wages were actually 12 percent higher in 1932 than in 1929! Meanwhile, of course, unemployment advanced to record levels as businesses saved on payroll costs by laying off workers. Perhaps if Hoover had listened to the advice of the so-called “liquidationists,” the depression would have been over by 1931.

More troubling, at least for opponents of war, is Krugman’s dubious contention that “What saved the economy, and the New Deal, was the enormous public works project known as World War II, which finally provided a fiscal stimulus adequate to the economy’s needs.” The evidence does not support the view that that war was beneficial for the economy. In a seminal article for the Journal of Economic History, Robert Higgs convincingly challenged the Keynesian theory of World War II as put forward by Krugman and others.

While unemployment disappeared during the war, it was hardly a step forward. Moving men and women from the unemployment lines to the killing fields of Anzio did not represent economic progress in any meaningful sense. During the war, Americans at home suffered from rationing, shortages, more accidents on the job, longer hours, and many other measures of economic deprivation. Moreover, as Higgs points out, “real personal consumption declined. So did real private investment. From 1941 to 1943 real gross private domestic investment plunged by 64 percent; during the four years of the war it never rose above 55 percent of its 1941 level; only in 1946 did it reach a new high.”

According to Higgs, genuine prosperity did not begin to return until the last months of 1945 and 1946. This prosperity occurred under a policy of reverse Keynesianism which included massive reductions in spending because of demoblization, rapid steps toward price decontrol, and scaled back deficit spending.

Higgs sums it up:

World War II, the so-called Good War, has been a fount of historical fallacies. One of the greatest—and one of the most pernicious for subsequent policymakers—is the notion that prosperity prevailed during the war. Although Americans might have been dying in the Pacific and European theaters of war, people on the home front actually benefited from the war, because it propelled the economy at long last out of the Great Depression. This view of the war would be sufficiently egregious if it were true, but despite the claims of historians for the past half century, it is not true.

Obama's best hope to bring lasting recovery is to let the economy go through a short, but sharp, readjustment. He needs to remove the malivestments not, contra Krugman, perpetuate them. Obama can faciliate this readjustment to a more sustainable level by cancelling the bailout, cutting spending, and pruning deficits. Another worthy goal would be to dismantle the Federal Reserve which helped to create this mess through its easy credit policies.

Most of all, however, Obama should end our costly empire by closing down our overseas bases and bringing home the troops. Only then, can we start to get our financial house in order and move towards genuine economic well being.

The Fatal Conceit of Empire

Economist Friedrich A. Hayek was not considered a critic of empire yet his warning about the "fatal conceit" of economic central planning can be equally applied to foreign policy. David Henderson offers this Hayekian critique of U.S. empire:

Unfortunately, both of the major candidates running for president are what Adam Smith would call "men of system." McCain and Obama have shown that they believe they can plan affairs in Afghanistan (both), Pakistan (both), and Iraq (McCain). Both, but especially Obama, think they can move us Americans around on the domestic chessboard also. Both are wrong. Each of us has his or her own "principle of motion." Unfortunately, whoever gets elected, we will pay for what Hayek would have called their "fatal conceit."

Chalmers Johnson on Eisenhower's famous warning against the "Military Industrial Complex" and history unfolding...

Here is an interesting article about the privatization of our military and intelligence. I find it interesting for the historical perspective. This development was warned of by Eisenhower almost 50 years ago. It is a trend that has been propelled forward by Republican and Democratic administrations ever since. The designation of outsourcing as actually being the use of mercernaries is an interesting historical comparison. Machiavelli saw the unreliability and destabilizing influence of mercernaries on a republic. Maybe we should too.

http://www.truthdig.com/report/item/20080727

Americans for Appeasement?

John McCain and George Bush have charged that Barack Obama, who states that he will talk with adversaries, such as Iran, is guilty of appeasement.

If their goal is to paint Obama at out-of-step with ordinary Americans, however, they are barking up the wrong tree. On this issue it is Bush and McCain, not Obama, who are on the political fringe. According to a Gallup Poll in May, a whopping 79 percent of Americans (including about half of all Republicans) think it is a “good idea” for the president to meet “with leaders of foreign countries considered enemies of the United States.”

Gordon Prather and Victor Navasky on Antiwar Radio

Gordon Prather, physicist, and Victor S. Navasky of the Nation magazine will be the featured guests on the Scott Horton Show at Antiwar Radio, 12:15PM Eastern, Friday, May 30th.

Topics include the recent IAEA report on Iran’s nuclear program and the media's coverage in the lead-up to war. Scott Horton is one of the best interviewers in the business. The streaming link is here.

Audio of John Kusack Interview on "War, Inc."

Here is an audio of Scott Horton's interview of actor, producer, and writer, John Kusack about his new film satire, War Inc. The film opened on May 23 in New York and Los Angeles and in the interview, according to this description, Cusack expresses "his outrage at the criminality of modern American war profiteers, the need for a grassroots bumrush of the first showings to guarantee national distribution, some critics’ complaints that the movie 'hits too close to home,' the great journalists whose work has inspired him, the socialization of the costs of all these private armies onto the American tax payer, the outsourcing of interrogation, the betrayals of the Democrats, the banality of evil, the short-changing of the troops while private mercenaries cash in and militarism in the movies."

Here is a trailer for the film:

New Insider "Buzz" About War With Iran

Former CIA officer and Antiwar.com columnist Philip Giraldi has this ominous news:

There is considerable speculation and buzz in Washington today suggesting that the National Security Council has agreed in principle to proceed with plans to attack an Iranian al-Qods-run camp that is believed to be training Iraqi militants. The camp that will be targeted is one of several located near Tehran. Secretary of Defense Robert Gates was the only senior official urging delay in taking any offensive action.

Zora Neale Hurston on Empire and Blowback

"I do not mean to single out England as something strange and different in the world. We, too, have our marines in China. We, too, consider machine gun bullets good laxatives for heathens who get constipated with toxic ideals of a country of their own....We also wrote that song about keeping a whole hemisphere under your wing. Now the Nipponese are singing our song all over Asia. They are full of stuff and need a good working out. The only hold-back to the thing is that they have copied our medicine chest. They are stocked up with the same steel pills and cannon plasters that Doctor Occident prescribes."

Zora Neale Hurston (1942), Hurston, Folklore, Memoirs, and Other Writings (New York: The Library of America, 1995), 791-92.