By Ron Paul

Last week ended with some promising news on finally stopping the oil spill in the Gulf of Mexico.  Unfortunately, the administration still seems to believe that shutting down working oil wells is a higher priority than effectively dealing with the broken one.   They are again issuing a moratorium on off-shore drilling, while maintaining a de facto ban on new permits even for shallow water drilling, which they previously stated would be unaffected.  The courts have twice declared this unconstitutional, over 70 percent of the people see this as unreasonable, yet the administration seems determined to simply end off-shore drilling, at least for those producers that cannot afford to sit idle for an unknown period of time until the ban is lifted.

Whether or not this latest effort will hold up in court is yet to be seen.  Sadly, many smaller oil producers in the Gulf see the writing on the wall, and instead of waiting around and risking their livelihoods on the whims of American politicians and judges, they are leaving for friendlier business climates.  What is happening to this country when the Republic of Congo is better for business than the United States?  One big factor is regime uncertainty.

Regime uncertainty is the opposite of the rule of law.  It is the rule of the whims of the people in charge and what mood they are in on any particular day.  It is usually associated with third world dictatorships and plays a major role in why some countries remain poor.  When a business cannot predict whether a government will issue a permit, confiscate or nationalize their capital investments, tax them into bankruptcy, or arbitrarily stall their operations, they tend to do business elsewhere.   This type of government hostility is not conducive to wealth creation and it is tragic to see it chasing away businesses here when we need the jobs and productivity more than ever.

When the rule of law is respected, it provides business with some measure of predictability so they can plan and operate smoothly.  When it is not respected, there are just too many variables, too much risk of loss or waste.

Of course, disregard of the rule of law creates other problems too.  For the larger and better-connected businesses, it creates the opportunity of regulatory capture.  If the government becomes too unpredictable, one business survival strategy is to become so involved in government and regulatory bodies that they effectively gain control over the very entities that are supposed to keep them in line.  In other words, if you can’t beat the government, become the government.  A business that achieves regulatory capture is also able to write and implement laws and regulations that it can deal with, but its competitors cannot. The eventual outcome is that companies use regulation to drive everyone else out of business until a monopoly is achieved, putting consumers at its mercy.

Meanwhile, the people develop a false sense of security, assuming that the many regulatory bodies in place are protecting them.  Without respect for the rule of law, however, those bodies and their regulations are more likely protecting and enabling big business at the expense of small business and the consumer.

We see this not only with big oil, but big banking, big defense contractors, you name it.  This is why, especially in a crisis, we should uphold the Constitution.  It is the ultimate consumer protection from crony corporatism.

By Ron Paul

GOP chairman Michael Steele came under fire for daring to say what a lot of Americans already know – that our involvement in Afghanistan is an ill-advised quagmire with no end in sight.  After nearly 10 years and approaching $1 trillion spent, the conflict is going nowhere because there is nowhere for it to go.  After all, if victory is never really defined, defeat is inevitable.

With our economy at home in serious trouble, this wasteful occupation is something we clearly cannot afford.  Each soldier costs us $1 million per year, and yet most in Washington are only considering how many more soldiers to send.  Fuel costs an astonishing $400 per gallon for our military in Afghanistan!  Yet somehow, many politicians feel it is acceptable to squeeze this money out of our taxpayers, who are truly struggling economically, to fund this non-war.   Our economy here is not showing any real signs of improvement.  Official unemployment is pushing 10 and getting worse.  (Real unemployment is over 20 according to the free-market economists)  The growing debt and inflation used to fund this occupation only dooms us to more economic hardship for a long time to come.  And – for what?

Where the money for Afghanistan comes from is one problem – where it goes is another.  Recently, it has come to light that much of the aid money we send to Afghanistan is lost due to corruption.  Billions of tax dollars from hardworking Americans are ending up lining the pockets of corrupt Afghan officials, and likely even filtering into the Taliban we are ostensibly fighting.  The Wall Street Journal recently reported that curiously enough, billions more than the Afghan government collects in revenue is leaving the country in the form of cash on huge pallets and in suitcases and mostly ending up in Dubai, as well-connected Afghan officials buy up luxury homes and enrich their personal off-shore bank accounts.  Investigations into corruption and graft have been blocked by the Karzai government, probably because Karzai’s own brother would have to be implicated.  It is encouraging that the foreign aid appropriations subcommittee has attempted to block billions in aid as a response to these allegations, but this is likely temporary and may not even succeed.

The point is that sending aid money to Afghanistan is not making poor people over there better off.  It is making poor people here worse off.  Corruption is endemic to Afghanistan, with graft comprising about one fourth of their economy!  Even though it is considered the second most corrupt nation in the world according to Transparency International, we still send the Afghan government billions of dollars in aid and are shocked to find it is not making its way out of the sticky fingers of the officials entrusted with it.

Robbing citizens here to fund corruption over there is not helping average citizens anywhere.  We are sacrificing real economic opportunities at home for the opportunity to line corrupt pockets in Afghanistan.  Not only that, but American soldiers are being killed and maimed.  It is tragic and frustrating how much we have lost and wasted already.  It is time to leave Afghanistan to the Afghans to sort out.  I am glad more Americans are finally willing to face this reality.

Our foreign policy was in the spotlight last week, which is exactly where it should be.  Almost two years ago many voters elected someone they thought would lead us to a more peaceful, rational co-existence with other countries.  However, while attention has been focused on the administration’s disastrous economic policies, its equally disastrous foreign policies have exacerbated our problems overseas.  Especially in times of economic crisis, we cannot afford to ignore costly foreign policy mistakes.  That’s why it is important that U.S. foreign policy receive some much needed attention in the media, as it did last week with the leaked documents scandal.

Many are saying that the Wikileaks documents tell us nothing new.  In some ways this is true.  Most Americans knew that we have been fighting losing battles.  These documents show just how bad it really is.  The revelation that Pakistani intelligence is assisting the people we are bombing in Afghanistan shows the quality of friends we are making with our foreign policy.  This kind of thing supports points that Rep. Dennis Kucinich and I tried to make on the House floor last week with a privileged resolution that would have directed the administration to remove troops from Pakistan pursuant to the War Powers Resolution.

We are not at war with Pakistan.  Congress has made no declaration of war.  (Actually, we made no declaration of war on Iraq or Afghanistan either, but that is another matter.)  Yet we have troops in Pakistan engaging in hostile activities, conducting drone attacks and killing people.  We sometimes manage to kill someone who has been identified as an enemy, yet we also kill about 10 civilians for every 1 of those.   Pakistani civilians are angered by this, yet their leadership is mollified by our billions in bribe money.  We just passed an appropriations bill that will send another $7.5 billion to Pakistan.  One wonders how much of this money will end up helping the Taliban.  This whole operation is clearly counterproductive, inappropriate, immoral and every American who values the rule of law should be outraged.  Yet these activities are being done so quietly that most Americans, as well as most members of the House, don’t even know about them.

We should follow constitutional protocol when going to war.  It is there for a reason.  If we are legitimately attacked, it is the job of Congress to declare war.  We then fight the war, win it and come home.  War should be efficient, decisive and rare.  However, when Congress shirks its duty and just gives the administration whatever it wants with no real oversight or meaningful debate, wars are never-ending, wasteful, and political.  Our so-called wars have become a perpetual drain on our economy and liberty.

The founders knew that heads of state are far too eager to engage in military conflicts.  That is why they entrusted the power to go to war with the deliberative body closest to the people – the Congress.  Decisions to go to war need to be supported by the people.  War should not be covert or casual.  We absolutely should not be paying off leaders of a country while killing their civilians without expecting to create a lot of new problems.  This is not what America is supposed to be about.

The administration’s terrible healthcare reform bill is now law, but the debate over how– and whether– the federal government should be involved in providing healthcare services is not over.  It is not too late for America to correct its course and stop the march toward a government run, “single payer” healthcare system.

Polls show that a large majority of Americans don’t want Obamacare.  Congress should seize the opportunity to repeal the very worst aspect of this new legislation, namely the mandate that forces every American either to purchase health insurance or face an IRS penalty.  This mandate represents nothing more than an unconstitutional, historically unprecedented gift to the insurance industry.  I introduced the “End the Mandate Act” (HR 4995) expressly to prevent the administration from ever putting this provision into effect.

Instead of mandating the same failed entitlement healthcare schemes that are bankrupting Europe, Congress should fundamentally re-examine the case for free-market healthcare.  Our current model, based on employer-provided health insurance, did not arise based on market preferences.  On the contrary, it makes no sense to couple health insurance with employment.  But federal wage and price controls instituted during World War II left employers with no alternative to attract workers in a tight labor market other than offering extra benefits such as health insurance and pensions.  Over time these nonwage benefits became the norm, especially since employers could deduct the cost of health insurance premiums from their income taxes while individuals could not.  The perverse consequence is that employees lose both their paychecks and their health insurance when they lose their job.

As reliance on third-party health insurance grew, patients became detached from the true costs of their doctor visits.  In the 1970s the Nixon administration, along with the late Senator Edward Kennedy, championed the cause of health maintenance organizations (HMOs).  Congress accepted the faulty premise that HMOs would reduce costs through centralized management of patients, when in fact the opposite was true: more bureaucracy would only lead to higher costs, less accountability, and worse patient care.

In recent years Congress has only intensified the problem with more laws and more regulations, especially with the disastrous Medicare prescription drug benefit.  The drug benefit was another example of naked patronage to a politically-connected industry, and it exponentially worsened the federal government’s balance sheet.  Obamacare will be the last nail in the coffin of our bankrupt entitlement system.

More laws are not the answer.  Instead, we need to allow a market system to operate that reflects consumer choices while rationally pricing services.  In a market system patients likely would pay cash for basic services, while maintaining relatively high-deductible catastrophic insurance for serious illnesses and accidents.  The cost of most routine medical care would drop if the patient paid the bill on the spot, especially if doctors no longer needed to employ large staffs solely to deal with insurance and billing.

Let me repeat: we need a system in America where patients pay cash for basic services, and carry insurance only for serious illnesses and accidents.  “Health maintenance” is the responsibility of each of us individually.  We cannot continue to collectivize the costs of healthcare and expect things to get better.

Authoritarianism is bad for your health.  Congress should end the Obamacare mandate and allow market-based medicine to flourish.

Please click on the link below to watch a video on this subject.

MUST SEE!
Meltup

This past week several emerging and ongoing crises took attention away from the ongoing sovereign debt problems in Greece.  The bailouts are merely kicking the can down the road and making things worse for taxpaying citizens, here and abroad.   Greece is unfortunately not unique in its irresponsible spending habits.  Greek-style debt explosions are quickly spreading to other nations one by one, and yes, the United States is one of the dominoes on down the line.

Time and again it has been proven that the Keynesian system of big government and fiat paper money are abject failures in the long run.  However, the nature of government is to ignore reality when there is an avenue that allows growth in power and control. Thus, most politicians and economists will ignore the long-term damage of Keynesianism in the early stage of a bubble when there is the illusion of prosperity, suggesting that the basic laws of economics had been repealed.  In fact, one way to tell if a bubble is about to burst is if economists start talking about how the government and the Central Bank have repealed the business cycle.

The truth is the laws of economics are constant and real, no matter how inconvenient they might be to politicians and bankers.  This reality is setting in and the bills are coming due.  In the mean time, countries that have no money have bailed out other countries that have no money, except for the phony money created by politicians, bureaucrats, and their partners-in-crime at the central banks.  This may be preventing big well-connected banks from having to take on massive losses, but it is all at the expense of the taxpaying citizen.

As governments and central banks continue the cycle of spending and inflating, the purchasing power of their currencies is constantly being degraded.  These currencies are what the people are working for and saving.  This inflation guts the savings and earnings of the people, who have very limited options for protecting themselves against these ravages.  One option is to convert their fiat currency into something out of reach of central banks and government spending, such as gold or silver.

It is fairly typical in the midst of economic crises like these for gold to come under attack from Keynesians economists and their amen corner in the media.  The arguments against gold are usually straw men, based on a fundamental misunderstanding of the purpose of buying gold.  Gold is not a typical investment.  It is a defense against the predictable behavior of governments to debase a fiat currency under its absolute control.  The people who run the printing presses have trouble shutting them off.  In order to limit one’s exposure to this reckless behavior, it is wise to exchange unsound assets for sound ones.

As the foundation of their power, their fiat currency, is rejected or avoided, government power is compromised.  Fiat currencies trade the people’s freedom and security for the government’s freedom to squander the wealth of the nation on wasteful pet programs, wars, and corruption.  This is why the freedom of the people is so intertwined with a sound monetary unit.  This is also why the founders liked gold and silver, and supporters of big government hate them.

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