Obama is Not a Socialist!

From Texas Congressman Ron Paul:

Lately many have characterized this administration as socialist, or having strong socialist leanings. I differ with this characterization. This is not to say Mr. Obama believes in free-markets by any means. On the contrary, he has done and said much that demonstrates his fundamental misunderstanding and hostility towards the truly free market. But a closer, honest examination of his policies and actions in office reveals that, much like the previous administration, he is very much a corporatist. This in many ways can be more insidious and worse than being an outright socialist.

Socialism is a system where the government directly owns and manages businesses. Corporatism is a system where businesses are nominally in private hands, but are in fact controlled by the government. In a corporatist state, government officials often act in collusion with their favored business interests to design polices that give those interests a monopoly position, to the detriment of both competitors and consumers.


A careful examination of the policies pursued by the Obama administration and his allies in Congress shows that their agenda is corporatist. For example, the health care bill that recently passed does not establish a Canadian-style government-run single-payer health care system. Instead, it relies on mandates forcing every American to purchase private health insurance or pay a fine. It also includes subsidies for low-income Americans and government-run health care “exchanges.” Contrary to the claims of the proponents of the health care bill, large insurance and pharmaceutical companies were enthusiastic supporters of many provisions of this legislation because they knew in the end their bottom lines would be enriched by Obamacare.


Similarly, Obama's “cap-and-trade” legislation provides subsidies and specials privileges to large businesses that engage in “carbon trading.” This is why large corporations, such as General Electric support cap-and-trade.

To call the President a corporatist is not to soft-pedal criticism of his administration. It is merely a more accurate description of the President’s agenda.

When he is a called a socialist, the President and his defenders can easily deflect that charge by pointing out that the historical meaning of socialism is government ownership of industry; under the President’s policies, industry remains in nominally private hands. Using the more accurate term – corporatism – forces the President to defend his policies that increase government control of private industries and expand de facto subsidies to big businesses. This also promotes the understanding that though the current system may not be pure socialism, neither is it free-market since government controls the private sector through taxes, regulations, and subsidies, and has done so for decades.

Using precise terms can prevent future statists from successfully blaming the inevitable failure of their programs on the remnants of the free market that are still allowed to exist. We must not allow the disastrous results of corporatism to be ascribed incorrectly to free market capitalism or used as a justification for more government expansion. Most importantly, we must learn what freedom really is and educate others on how infringements on our economic liberties caused our economic woes in the first place. Government is the problem; it cannot be the solution.

Did GM Really Pay Off Its Government Loan?

It appears that GM has not really paid back its loan. From a letter by Senator Charles Grassley of Iowa:

Dear Secretary Geithner:

General Motors (GM) yesterday announced that it repaid its TARP loans. I am concerned, however, that this announcement is not what it seems. In fact, it appears to be nothing more than an elaborate TARP money shuffle.

On Tuesday of this week, Mr. Neil Barofsky, the Special Inspector General for TARP, testified before the Senate Finance Committee. During his testimony Mr. Barofsky addressed GM’s recent debt repayment activity, and stated that the funds GM is using to repay its TARP debt are not coming from GM earnings. Instead, GM seems to be using TARP funds from an escrow account at Treasury to make the debt repayments. The most recent quarterly report from the Office of the Special Inspector General for TARP says “The source of funds for these quarterly [debt] payments will be other TARP funds currently held in an escrow account.” See, Office of the Special Inspector General for TARP, Quarterly Report to Congress dated April 20, 2010, page 115.

Furthermore, Exhibit 99.1 of the Form 8K filed by GM with the SEC on November 16, 2009, seems to confirm that the source of funds for GM’s debt repayments was a multi-billion dollar escrow account at Treasury—not from earnings. In the 8K filing GM acknowledged:

Of the $42.6 billion in cash and marketable securities available to GM as of September, 30, 2009, $17.4 billion came from an escrow account with Treasury,

$6.7 billion of the escrow account available to GM was allocable to the repayment of loans to Treasury,

$5.6 billion in cash would remain in the Treasury escrow account following the repayment by GM of their loans, and

Upon repaying Treasury, any balance of escrow funds would be released to GM.

Therefore, it is unclear how GM and the Administration could have accurately announced yesterday that GM repaid its TARP loans in any meaningful way. In reality, it looks like GM merely used one source of TARP funds to repay another. The taxpayers are still on the hook, and whether TARP funds are ultimately recovered depends entirely on the government’s ability to sell GM stock in the future. Treasury has merely exchanged a legal right to repayment for an uncertain hope of sharing in the future growth of GM. A debt-for-equity swap is not a repayment.

The bottom line seems to be that the TARP loans were “repaid” with other TARP funds in a Treasury escrow account. The TARP loans were not repaid from money GM is earning selling cars, as GM and the Administration have claimed in their speeches, press releases and television commercials. When these criticisms were put to GM’s Vice Chairman Stephen Girsky in a television interview yesterday, he admitted that the criticisms were valid:

Question: Are you just paying the government back with government money?

Mr. Girsky: Well listen, that is in effect true, but a year ago nobody thought we’d
be able to pay this back.

No to Sanctions on Iran

Texas Congressman Ron Paul explains why he opposes sanctions on Iran:

Before the US House of Representatives, April 22, 2010, Statement on Motion to Instruct Conferees on HR 2194, Comprehensive Iran Sanctions, Accountability and Divestment Act


Mr. Speaker I rise in opposition to this motion to instruct House conferees on HR 2194, the Comprehensive Iran Sanctions, Accountability and Divestment Act, and I rise in strong opposition again to the underlying bill and to its Senate version as well. I object to this entire push for war on Iran, however it is disguised. Listening to the debate on the Floor on this motion and the underlying bill it feels as if we are back in 2002 all over again: the same falsehoods and distortions used to push the United States into a disastrous and unnecessary one trillion dollar war on Iraq are being trotted out again to lead us to what will likely be an even more disastrous and costly war on Iran. The parallels are astonishing.


We hear war advocates today on the Floor scare-mongering about reports that in one year Iran will have missiles that can hit the United States. Where have we heard this bombast before? Anyone remember the claims that Iraqi drones were going to fly over the United States and attack us? These “drones” ended up being pure propaganda – the UN chief weapons inspector concluded in 2004 that there was no evidence that Saddam Hussein had ever developed unpiloted drones for use on enemy targets. Of course by then the propagandists had gotten their war so the truth did not matter much.


We hear war advocates on the floor today arguing that we cannot afford to sit around and wait for Iran to detonate a nuclear weapon. Where have we heard this before? Anyone remember then-Secretary of State Condoleezza Rice’s oft-repeated quip about Iraq: that we cannot wait for the smoking gun to appear as a mushroom cloud.

We need to see all this for what it is: Propaganda to speed us to war against Iran for the benefit of special interests.

Let us remember a few important things. Iran, a signatory of the Nuclear Non-Proliferation Treaty, has never been found in violation of that treaty. Iran is not capable of enriching uranium to the necessary level to manufacture nuclear weapons. According to the entire US Intelligence Community, Iran is not currently working on a nuclear weapons program. These are facts, and to point them out does not make one a supporter or fan of the Iranian regime. Those pushing war on Iran will ignore or distort these facts to serve their agenda, though, so it is important and necessary to point them out.

Some of my well-intentioned colleagues may be tempted to vote for sanctions on Iran because they view this as a way to avoid war on Iran. I will ask them whether the sanctions on Iraq satisfied those pushing for war at that time. Or whether the application of ever-stronger sanctions in fact helped war advocates make their case for war on Iraq: as each round of new sanctions failed to “work” – to change the regime – war became the only remaining regime-change option.

This legislation, whether the House or Senate version, will lead us to war on Iran. The sanctions in this bill, and the blockade of Iran necessary to fully enforce them, are in themselves acts of war according to international law. A vote for sanctions on Iran is a vote for war against Iran. I urge my colleagues in the strongest terms to turn back from this unnecessary and counterproductive march to war.

The History of Enslavement

A very thought provoking video on how humans are enslaved:

The Stupidity of the US Drinking Age

The United States is one of only four countries in the world with a drinking age as high as 21, the other three are Indonesia, Mongolia and Palau. Does having the drinking age set to 21 really do any good, or is it actually harmful?

Reason TV talks to John McCardell, president of Choose Responsibility and Mary Beth Griffin of Mother Against Drunk Driving (MADD). Reason tried to talk to the Menomonie Police, but they refused to comment. So much for serving the public.

From Reason TV:

Today, we all take the drinking age for granted, but should we? In fact, the US is one of only four countries in the world with a drinking age as high as 21--the other three are Indonesia, Mongolia and Palau.

Is the policy working to reduce health and safety issues related to youthful alcohol abuse? Is enforcing the drinking age the best use of scarce public resources? What are the unintended consequences of alcohol prohibition for 18-20 year olds?

Organizations such as Mother Against Drunk Driving (MADD) argue that the drinking age is an effective policy and that the answer to ongoing alcohol related problems for 18-20 year olds is more education and better enforcement.

John McCardell, president of Choose Responsibility, and 135 university presidents and chancellors across the country believe it's time to take a fresh look at the drinking age. The former president of Middlebury College and the new head of Sewanee/University of the South, McCardell says our current system encourages unsupervised binge drinking.

Reason.tv went to the University of Wisconsin-Stout in Menomonie, Wisconsin to get a first-hand look at the war on underage drinking.

Fiat Money is Like a Drug

From Texas Congressman Ron Paul:

The FCIC: Passing the Buck

Last week the federal government’s Financial Crisis Inquiry Commission held hearings as part of their continuing investigation into the causes of the acute economic meltdown which occurred in late summer 2008. This bipartisan commission, partly inspired by the Pecora Commission- which investigated the causes of the Great Depression- is expected to report back to Congress before the end of the year.

Things don’t seem to be going well. The individuals questioned by the commission mostly seem to be diverting blame for the whole fiasco to someone else. Nobody is offering any tangible insights into the causes of the financial crisis.

Predictably, the commission will avoid calling any witnesses who might unequivocally indict the federal government for its role in the crisis, or suggest solutions which take away government power. Government commissions have a remarkable tendency to recommend granting even more power to the same useless government agencies that so utterly fail to prevent crises in the first place. We saw this with the Pecora Commission, we saw it after 9-11, and we’re seeing it again today with regard to financial regulations. For example, this latest commission almost certainly will suggest granting more power to the SEC, when in fact the SEC should be abolished as an embarrassing farce. Rest assured that this recommendation will be made without apology or sense of irony.

The reality is that the Federal Reserve relentlessly expanded the money supply through artificially low interest rates for over two decades, and this expansion of easy money caused a wholly predictable bubble. To a myopic Keynesian regulator, the bubble may appear to be caused by greed, but in truth it is completely predictable that humans will act in their own perceived self interest. If the Fed wants to dole out artificially cheap money, people and businesses- including Wall Street businesses- will line up to take it. We can condemn this as greed, but the fundamental problem is Fed policy itself. There will always be demand for cheap money, but we should not allow the Fed to debase our currency and create bubbles of false prosperity to satisfy that demand.

What the commission really needs are experts who understand free market economics rather than big government Keynesian fantasies. The commission has none of these, and has called no true free market witnesses. That perspective would only distract from their predetermined goals.

The commission will bemoan the complexity and inscrutability of our economic problems, but the solution is simple: allow freedom to operate in our markets. Allow U.S. financial, labor, and housing markets to normalize without political interference. Though solution is simple, and rather obvious, it would not be easy or painless, but we’d be so much better off for it in the long run. It would require admitting fiat money is a tangled web of monetary deception prone to catastrophic failure. It would require allowing Americans to choose a system of sound money, where the money supply and interest rates are set by market forces rather than centralized economic planners. Unfortunately, fiat money is like a drug to a Congress hopelessly addicted to spending vastly more than the Treasury collects in revenues. Because of this, our problems can only get worse and more complex before they get better.

Ron Paul on the Tea Party, the Republican Party and Standing for Something

Texas Congressman Ron Paul, appearing on CNN, talks about the Tea Party, the Republican Party and standing for something.

The Mushroom Theory of Politics

In light of the current campaign by Democrats and the media to marginalize any dissent from the Obama Administration policies, Butler Shaffer discusses the tricks of the trade of the establishment. Shaffer demonstrates that both Republicans and Democrats employ tactics to keep the public in the dark and distracted from what is really going on.

This article originally appeared on Lew Rockwell.com:

It’s known as "projection": the trait by which one attributes to others various "dark side" attitudes and motivations. The current practice of accusing the Iranian government of warlike intentions in order to rationalize one’s own desires to attack that country is one example. Another instance is found in the efforts of numerous Democratic party supporters to explain the opposition to Barack Obama’s policies as racist-driven. Such "liberal" commentators as Chris Matthews, Keith Olbermann, Alan Colmes, Colbert King, and Frank Rich, along with former president Jimmy Carter, have strained and contorted their minds to suggest that "much" of the criticism of Obama programs – particularly that found in the "Tea Party" movement – arises from people who are uncomfortable with a black man as president.

How has race played into the Obama presidency? To begin with, we must identify the factors that led to this man being elected to that office: (a) he was the "not George Bush" candidate, and (b) for many, he was the opportunity for the United States to have its first non-white president. These considerations, alone, led to his victory in 2008. He offered no clearly-defined programs or policies: "change" and "hope" were about the only words to appear on his behalf on billboards and bumper-stickers. He did not campaign on promises to escalate American wars in the Middle East; to expand the American empire; to nationalize the banking, insurance, auto manufacturing, and health-care industries; or to circumvent the often dilatory processes of Congress by his appointment of "czars" to run the varied sectors of American society. "Hope" and "change" were sufficient bromides to persuade a thoroughly befuddled Boobus to stagger into voting booths to elect this man.


In these post-2008 years, I totally dismiss everything establishment Republicans and conservatives have to say about Obama’s shortcomings and their own "alternatives." It was the unprincipled mindlessness of this crowd – cheering on every utterance offered by the Bush/Cheney/Rove/Rumsfeld contingent, as well as their neocon media flacks – that produced the immoral and destructive policies that got Obama elected; policies he now kicks into high-gear! Ron Paul was – and continues to be – the only Republican to condemn the GOP’s embrace of rampant statism. The dismal state of this party is seen in its contemptuous treatment of Ron.

If race is to be considered a major factor in the assessment of Obama, what is to be said of the support he received during the 2008 campaign? I saw a number of post-election polls indicating that, among black voters, Obama received some 95% of their support. Some 40% of white voters, on the other hand, selected Obama. While traditional party loyalties may explain some of this differential, that 40% of white voters favored Obama, while only 5% of blacks voted for McCain, may introduce a racial factor that "liberals" want to overlook. When, on election night, MSNBC’s Chris Matthews announced "I’m going to do everything I can to make this thing work – this new presidency," to what "thing" was he referring? It certainly was not the success of any announced policies, as nothing of any substance had been promised. I received similar comments in e-mails from "liberal" friends, causing me to wonder if a black president’s programs were to be favored over those of a white president and, if so, why? Are those who try to convince you that race motivates many of Obama’s critics, projecting their own sense of uneasiness for allowing race to be the basis for their support?


One cannot understand modern political behavior without grasping a basic truth of which your high-school civics class teacher did not inform you: we have a one-party system consisting of two interconnected franchises, each under the complete control of the political establishment. If you would like to put Janus-like faces to this arrangement, think of that frequent media guest, David Gergen, a man who served as a bipartisan presidential advisor to Nixon, Ford, Reagan, and Clinton. Or look upon the married couple, Mary Matalin and James Carville: she a valued GOP advisor to George W. Bush and Dick Cheney; he a Democratic advisor to Bill and Hillary Clinton.

The political establishment loves the imagery of bipartisanship, a word reflecting satisfaction with either political party’s policies. If Boobus thought, for even a moment, of the necessary implications of "bipartisanship," he would quickly become aware of the racket being played at his expense by the entire system. But thinking, even for a moment, is something establishment forces cannot tolerate. This is why Ron Paul is persona non grata to both parties, the establishment’s media lapdogs, and other institutional interests intent on preserving their places at the beltway trough. Thinking – like information generally – is threatening to power interests dependent upon an unfocused group-think. Would the Iraqi/Afghan wars have been possible if Americans had used their heads for other than locations upon which to place their "U.S.S. Missouri" baseball caps?


And, so, Ron Paul and all others who insist on analyzing government policies on the basis of facts and focused reasoning, must be marginalized. Like the fable of the boy who saw the emperor’s nakedness, the political order will send out its reporters to impress upon Boobus the beauty of non-existent fabrics. In order to discourage questioning by others, establishment voices resort to the tactic upon which deceit is always dependent: name-calling. The power of intimidation is called into play: those who suspect there may be dishonest purposes underlying government policies, are accused of being "paranoid conspiracy theorists." Persons who condemn the Israeli government’s treatment of Palestinians are labeled "anti-Semites." (During the George W. Bush administration, we were told that criticism of "neocons" was really a cover for anti-Semitism.) Now we are told that men and women who disapprove of the increased collectivization of the economy; or of the crony-capitalism that shovels hundreds of billions of dollars into corporate coffers; or of the state’s increased control over their daily lives; or of government policies that enhance the economic collapse of America; are doing nothing more than indulging in racist bigotries!

Those who disapprove of government, itself, are accused – by those who use state power to feed on the energies of others – of promoting "violence." Herein lies another example of projection. What political science student does not recognize the basic definition of "government" as "an agency with a monopoly on the use of violence within a given geographic territory"? As distinct from the marketplace – which consists of a system of voluntary, contractual exchanges among individuals – all political systems are characterized by the lawful authority to use violent force to compel those subject to it to obey. Policemen are the coercive enforcers of state authority. When Randolph Bourne observed that "war is the health of the state," he was getting to its violent essence, a truth easily confirmed by the 200,000,000 deaths inflicted upon humanity through government wars and genocides during the 20th century. Are we really to believe that those who oppose such practices, and favor free and peaceful social systems, are advocates of violence? You will not hear questions of this sort discussed in the mainstream media. If Boobus is to be kept in harness, in service to his masters, his blinders must be kept in place.

Such queries will, however, continue to energize the growing number of minds who know that the political order – as well as the society victimized by political thinking – is in a state of disrepair. They know that if present practices remain unchallenged, their lives will suffer the adverse consequences. As they intensify both the depth and scope of their questioning, they will have to endure the intimidation and defamation of a statist regime desperate to keep its herd intact. Rather than seeking out the insights of those whose reasoned analyses strike at the heart of the vicious racket being played at the expense of humanity, they will be encouraged to turn to the comic relief, contradictions, and distractions provided by the Tea Party, and the likes of Sarah Palin, Glenn Beck, and John McCain.

April 5, 2010

Butler Shaffer teaches at the Southwestern University School of Law. He is the author of the newly-released In Restraint of Trade: The Business Campaign Against Competition, 1918–1938 and of Calculated Chaos: Institutional Threats to Peace and Human Survival. His latest book is Boundaries of Order.

Copyright © 2010 by LewRockwell.com. Permission to reprint in whole or in part is gladly granted, provided full credit is given.

We Don't Need No Stinking Search Warrant

Kern County Sheriff's Deputies and a bail bonds enforcement officer illegally enter the home of a woman in Bakersfield, California. They consistently claim they don't need a search warrant to enter her home.

The Fourth Amendment to the United States Constitution:

The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.

Notice how the deputies consistently lie, claiming she let them in, when she consistently told them that they were trespassing and asked them to leave. Near the beginning notice that a deputy comes from the back of the house, which means he opened the back door to get in. Notice also how they threaten her with arrest for objecting to their illegal acts.

Felix Ortiz: Nanny of the Month

Another one of our fearless leaders protecting us from the latest danger:



Perhaps it is time that our leaders should just pass a law saying that we are nothing but ignorant children and can only do things they tell us to do. But if we are that dumb, how can we be allowed to vote? I mean what might happen with all these dumb people voting? Whoa, if these people have been elected, maybe we shouldn't.

Guam Endangered!

One of our fearless leaders showing the qualifications needed to lead us. Democratic Representative from Georgia, Hank Johnson, is afraid Guam may capsize.