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Brazil’s Lost Decade: We Must Free Our Economy – Article by Felipe Capella

Brazil’s Lost Decade: We Must Free Our Economy – Article by Felipe Capella

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The New Renaissance HatFelipe Capella
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It was a lost decade for Latin America. Years of populist governments combined with a commodity boom turned out to be our oil curse, our Dutch Disease. This disastrous mix made bad public policies look like temporary successes, pushing developing countries to an unsustainable path. The collectivist ideology monopolized the debate for more than 10 years, and now that the natural resource party is over, the harm of these policies have become clearer: deep economic crisis generated by a utopia whose greatest achievement was turning toilet paper into a rare-earth product.

Populist and authoritarian South American regimes have set up government bureaucracies aimed at pleasing special interest groups that provide political support while tirelessly harming the population as a whole. These groups are divided into several small groups with special rights and privileges: judges, civil servants, members of parliament, friendly businessmen. These factions are getting their more-than-fair share while the unprivileged citizen foots the bill.

Latin American politicians played it very well during these favorable times. Cronyism and populism greatly benefited some chosen groups, while the harms were diffused enough throughout the whole country and difficult to measure during favorable economic winds. Brazil is just the biggest and clearest example of that.

How We Got Here 

For many years Brazil’s road to serfdom was being paved by the left through a combination of the world’s worst ideas: a Venezuelan-like project to subordinate decisions of the Supreme Court to the ratification of Congress; an Ecuadorian will to regulate and control the free press; a Russian compassion for cronies handpicked by the executive; Greek style benefits for public servants; Southern European pension costs (for a much younger population); Argentinean barriers for international trade, and an American/EU taste for subsidies.

The former — and now failed — cherry-picked billionaire darling of the regime Eike Batista was showered with tax funds while ordinary entrepreneurs lacked governmental support; friendly national industries were heavily protected, while people were taxed up to 50 percent on food and health supplies. Oi Telecom, a multibillion dollar mobile company, is just the most recent example of Lula’s national-champion policy (the company has just filed for bankruptcy, with 17 percent of its debt held by state-owned banks).

That was the result of 10 years of left-populist government in Brazil, all of them enjoying the applause of the international press. For years The New York Times constantly published articles with a pro-Dilma/Lula tone. Right after Dilma’s reelection — which is now known to have been funded by money siphoned from state-owned companies — The NYT published a piece half-mocking 48 percent of voters that were concerned about Dilma’s economic and political approaches.

The good thing about bad journalism is that reality eventually catches up with it. Since that 2014 article, Dilma has since lost her job and is about to be impeached for illegal budgetary schemes and deep corruption. Her top aides are all in jail or about to be thrown there, accused of stealing dozens of billions of dollars, including former Ministers and three former treasurers of her Labor Party (which some people now deem to be the most dangerous job in the world). Brazil is in its worst economic crisis since the 1930s, which has been worsening since 2014 (while Dilma was coming up with her now-famous accounting tricks to fool the Brazilian voters). Lula had even become a frequent contributor of The Times after his presidency, but now faces criminal charges and has seen the federal police knock on his door with a coercive trip to the criminal courts.

In its recent opinion page about the failed Rio Olympic Games preparation, The NYT’s favorite Brazilian correspondent Vanessa Barbara wrote that “political turmoil has paralyzed the country and frozen the economy.” This rhetoric of blaming “political turmoil” for Latin American calamities does not help to set the record straight. The problems with the Olympic games stem directly from Dilma’s and Lula’s incompetence and corruption. But the problem also lies on media vehicles like The Times, always ready to turn a blind eye to mismanagement and corruption in the name of ideology.

So here we are. Brazil is a failing state after a decade of populist presidents, misguided policies and commodity boom, all under the auspices of the progressive press.

The Need for Laissez-Faire Liberalism

For a long time, Brazil has been a place where liberalism (i.e., the ideology of freedom and free markets) was mostly marginalized, despite its positive track-record. In the minds of most Brazilians, being liberal was conspiring for the wealthy, being socialist is taking care of the poor.

But if The Times does not want to recognize its mistakes, apparently the Brazilian population is more willing to deal with self-criticism. There is now a strong resurgence of liberalism throughout the country.

Partido Novo (“New Party”) is a new political party created with a clear liberal approach to the economy, and it is just one of the recent examples of how liberalism is growing in the country, waking up millions of Brazilians who were orphans of a liberal political leadership. Many creative and hardworking people that do not think that socialism (or heavy-handed South American social democracy) will make our countries more prosperous. There are substantial constituencies that want public policies driven by research, metrics and actual public interest.

Free Trade Is the Key

The European Union has no appetite and no urgency to negotiate any comprehensive trade agreement with Mercosur or other Latin American countries. The United States faces a choice between a populist protectionist and a trade-dubious democrat (to put it mildly).

It is essential for the world that someone — anyone — pushes forward the liberal pro-trade agenda. As we natives well know, it is never wise to bet on Brazil as a global force for good. But maybe — just maybe — because we are suffering first-hand the harms of a decade of interventionist, protectionist, and corrupted government, we can somehow understand that populism is an illusory lucky charm that actually curses a country for years to come; and maybe — just maybe — we can do something to redeem ourselves.

Now that international trade seems under constant attack from all places and political spectrums, and no big world economy wants to step up and bluntly defend the liberal track record — including the United States — maybe Brazil could become the champion of good policy at last, pushing for reforms throughout Latin America and holding the liberal torch high in these dark times.

As Roberto Campos advised decades ago, for us Brazilians there are only three ways out of the current mess: Rio’s airport, Sao Paulo’s airport, and Liberalism.

Felipe Capella is an attorney turned entrepreneur. He is a former law professor at the Federal University of Santa Catarina (Brazil), former attorney at Sullivan & Cromwell (New York) and the Inter-American Development Bank (Washington, DC), has Master degrees from UPenn/Wharton and Universidad Francisco de Vitoria (Spain), and holds an MBA from FGV (Brazil).

This article was published on Mises.org and may be freely distributed, subject to a Creative Commons Attribution United States License, which requires that credit be given to the author.

As Ukraine Collapses, Europeans Tire of US Interventions – Article by Ron Paul

As Ukraine Collapses, Europeans Tire of US Interventions – Article by Ron Paul

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The New Renaissance HatRon Paul
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On Sunday Ukrainian prime minister Yatsenyuk resigned, just four days after the Dutch voted against Ukraine joining the European Union. Taken together, these two events are clear signals that the US-backed coup in Ukraine has not given that country freedom and democracy. They also suggest a deeper dissatisfaction among Europeans over Washington’s addiction to interventionism.

According to US and EU governments – and repeated without question by the mainstream media – the Ukrainian people stood up on their own in 2014 to throw off the chains of a corrupt government in the back pocket of Moscow and finally plant themselves in the pro-west camp. According to these people, US government personnel who handed out cookies and even took the stage in Kiev to urge the people to overthrow their government had nothing at all to do with the coup.

When Assistant Secretary of State Victoria Nuland was videotaped bragging about how the US government spent $5 billion to “promote democracy” in Ukraine, it had nothing to do with the overthrow of the Yanukovich government. When Nuland was recorded telling the US Ambassador in Kiev that Yatsenyuk is the US choice for prime minister, it was not US interference in the internal affairs of Ukraine. In fact, the neocons still consider it a “conspiracy theory” to suggest the US had anything to do with the overthrow.

I have no doubt that the previous government was corrupt. […] But according to Transparency International, corruption in the Ukrainian government is about the same after the US-backed coup as it was before. So the intervention failed to improve anything, and now the US-installed government is falling apart. Is a Ukraine in chaos to be considered a Washington success story?

This brings us back to the Dutch vote. The overwhelming rejection of the EU plan for Ukrainian membership demonstrates the deep level of frustration and anger in Europe over EU leadership following Washington’s interventionist foreign policy at the expense of European security and prosperity. The other EU member countries did not even dare hold popular referenda on the matter – their parliaments rubber-stamped the agreement.

Brussels backs US bombing in the Middle East and hundreds of thousands of refugees produced by the bombing overwhelm Europe. The people are told they must be taxed even more to pay for the victims of Washington’s foreign policy.

Brussels backs US regime change plans for Ukraine and EU citizens are told they must bear the burden of bringing an economic basket case up to European standards. How much would it cost EU citizens to bring in Ukraine as a member? No one dares mention it. But Europeans are rightly angry with their leaders blindly following Washington and then leaving them holding the bag.

The anger is rising and there is no telling where it will end. In June, the United Kingdom will vote on whether to exit the European Union. The campaign for an exit is broad-based, bringing in conservatives, populists, and progressives. Regardless of the outcome, the vote should be considered very important. Europeans are tired of their unelected leaders in Brussels pushing them around and destroying their financial and personal security by following Washington’s foolish interventionism. No one can call any of these recent interventions a success, and the Europeans know it.

One way or the other, the US empire is coming to an end. Either the money will go or the allies will go, but it cannot be sustained. The sooner the American people demand an end to these foolish policies the better.

Ron Paul, MD, is a former three-time Republican candidate for U. S. President and Congressman from Texas.

This article is reprinted with permission from the Ron Paul Institute for Peace and Prosperity.

Today’s War Against Deflation Will Make Us Poorer – Article by Frank Shostak

Today’s War Against Deflation Will Make Us Poorer – Article by Frank Shostak

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The New Renaissance HatFrank Shostak
October 29, 2015
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The yearly growth rate of the US consumer price index (CPI) fell to 0 percent in September 2015, from 0.2 percent in August and, 1.7 percent in September last year.

The yearly growth rate of the European Monetary Union CPI fell to minus 0.1 percent in September from 0.1 percent in the previous month and 0.3 percent in September last year.
Shostak 1 102915_0
Also, the growth momentum of the UK CPI fell into the negative in September with the yearly growth rate closing at minus 0.1 percent from 0 percent in August and 1.2 percent in September last year.

The growth momentum of China’s CPI eased in September with the yearly growth rate falling to 1.6 percent from 2 percent in August.

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Deflation Fears Gain Steam
Consequently, many experts are expressing concern regarding the declining growth momentum of the CPI and are of the view that rather than tightening the monetary stance, central banks should loosen their stance further in order to counter the emergence of deflation, which is regarded as a major threat to economic well-being of individuals. For most experts, deflation is bad news since it generates expectations of a decline in prices. As a result, they believe, consumers are likely to postpone their buying of goods at present since they expect to buy these goods at lower prices in the future. This weakens the overall flow of spending and in turn weakens the economy. Hence, such commentators believe that policies that counter deflation will also counter the slump.
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Will Reversing Deflation Prevent a Slump?

If deflation leads to an economic slump, then policies that reverse deflation should be good for the economy, so it is held.

Reversing deflation will simply involve introducing policies that support general increases in the prices of goods, i.e., price inflation. With this way of thinking inflation could actually be an agent of economic growth.

According to most experts, a little bit of inflation can actually be a good thing. Mainstream economists believe that inflation of 2 percent is not harmful to economic growth, but that inflation of 10 percent could be bad for the economy.

There’s good reason to believe, however, that at a rate of inflation of 10 percent, it is likely that consumers are going to form rising inflation expectations.

According to popular thinking, in response to a high rate of inflation, consumers will speed up their expenditures on goods at present, which should boost economic growth. So why then is a rate of inflation of 10 percent or higher regarded by experts as a bad thing?

Clearly there is a problem with the popular way of thinking.

Price Inflation vs. Money-Supply Inflation
Inflation is not about general increases in prices as such, but about the increase in the money supply. As a rule the increase in the money supply sets in motion general increases in prices. This, however, need not always be the case.

The price of a good is the amount of money asked per unit of it. For a constant amount of money and an expanding quantity of goods, prices will actually fall.

Prices will also fall when the rate of increase in the supply of goods exceeds the rate of increase in the money supply.

For instance, if the money supply increases by 5 percent and the quantity of goods increases by 10 percent, prices will fall by 5 percent.

A fall in prices cannot conceal the fact that we have inflation of 5 percent here on account of the increase in the money supply.

The Problem Is Really Wealth Formation, not Rising Prices
The reason why inflation is bad news is not because of increases in prices as such, but because of the damage inflation inflicts to the wealth-formation process. Here is why:

The chief role of money is the medium of exchange. Money enables us to exchange something we have for something we want.

Before an exchange can take place, an individual must have something useful that he can exchange for money. Once he secures the money, he can then exchange it for the good he wants.

But now consider a situation in which the money is created “out of thin air,” increasing the money supply.

This new money is no different from counterfeit money. The counterfeiter exchanges the printed money for goods without producing anything useful.

He in fact exchanges nothing for something. He takes from the pool of real goods without making any contribution to the pool.

The economic effect of money that was created out of thin air is exactly the same as that of counterfeit money — it impoverishes wealth generators.

The money created out of thin air diverts real wealth toward the holders of new money. This weakens the wealth generators’ ability to generate wealth and this in turn leads to a weakening in economic growth.

Note that as a result of the increase in the money supply what we have here is more money per unit of goods, and thus, higher prices.

What matters however is not that price rises, but the increase in the money supply that sets in motion the exchange of nothing for something, or “the counterfeit effect.”

The exchange of nothing for something, as we have seen, weakens the process of real wealth formation. Therefore, anything that promotes increases in the money supply can only make things much worse.

Why Falling Prices Are Good
Since changes in prices are just a symptom, as it were — and not the primary causative factor — obviously countering a falling growth momentum of the CPI by means of loose a monetary policy (i.e., by creating inflation) is bad news for the process of wealth generation, and hence for the economy.

In order to maintain their lives and well-being, individuals must buy goods and services in the present. So from this perspective a fall in prices cannot be bad for the economy.

Furthermore, if a fall in the growth momentum of prices emerges on the back of the collapse of bubble activities in response to a softer monetary growth then this should be seen as good news. The less non-productive bubble activities that are around the better it is for the wealth generators and hence for the overall pool of real wealth.

Likewise, if a fall in the growth momentum of the CPI emerges on account of the expansion in real wealth for a given stock of money, this is obviously great news since many more people could now benefit from the expanding pool of real wealth.

We can thus conclude that contrary to the popular view, a fall in the growth momentum of prices is always good news for the wealth generating process and hence for the economy.

Frank Shostak is an Associated Scholar of the Mises Institute. His consulting firm, Applied Austrian School Economics, provides in-depth assessments and reports of financial markets and global economies. He received his bachelor’s degree from Hebrew University, master’s degree from Witwatersrand University and PhD from Rands Afrikaanse University, and has taught at the University of Pretoria and the Graduate Business School at Witwatersrand University.

This article was originally published by the Ludwig von Mises Institute. Permission to reprint in whole or in part is hereby granted, provided full credit is given.

Blame America? No, Blame Neocons! – Article by Ron Paul

Blame America? No, Blame Neocons! – Article by Ron Paul

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The New Renaissance HatRon Paul
September 21, 2015
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Is the current refugee crisis gripping the European Union “all America’s fault”? That is how my critique of US foreign policy was characterized in a recent interview on the Fox Business Channel. I do not blame the host for making this claim, but I think it is important to clarify the point.

It has become common to discount any criticism of US foreign policy as “blaming America first.” It is a convenient way of avoiding a real discussion. If aggressive US policy in the Middle East – for example in Iraq – results in the creation of terrorist organizations like al-Qaeda in Iraq, is pointing out the unintended consequences of bad policy blaming America? Is it “blaming America” to point out that blowback – like we saw on 9/11 – can be the result of unwise US foreign policy actions like stationing US troops in Saudi Arabia?

In the Fox interview I pointed out that the current refugee crisis is largely caused by bad US foreign policy actions. The US government decides on regime change for a particular country – in this case, Syria – destabilizes the government, causes social chaos, and destroys the economy, and we are supposed to be surprised that so many people are desperate to leave? Is pointing this out blaming America, or is it blaming that part of the US government that makes such foolish policies?

Accusing those who criticize US foreign policy of “blaming America” is pretty selective, however. Such accusations are never leveled at those who criticize a US pullback. For example, most neocons argue that the current crisis in Iraq is all Obama’s fault for pulling US troops out of the country. Are they “blaming America first” for the mess? No one ever says that. Just like they never explain why the troops were removed from Iraq: the US demanded complete immunity for troops and contractors and the Iraqi government refused.

Iraq was not a stable country when the US withdrew its troops anyway. As soon as the US stopped paying the Sunnis not to attack the Iraqi government, they started attacking the Iraqi government. Why? Because the US attack on Iraq led to a government that was closely allied to Iran and the Sunnis could not live with that! It was not the US withdrawal from Iraq that created the current instability, but the invasion. The same is true with US regime-change policy toward Syria. How many Syrians were streaming out of Syria before US support for Islamist rebels there made the country unlivable? Is pointing out this consequence of bad US policy also blaming America first?

Last year I was asked by another Fox program whether I was not “blaming America” when I criticized the increasingly confrontational US stand toward Russia. Here’s how I put it then:

I don’t blame America. I am America, you are America. I don’t blame you. I blame bad policy. I blame the interventionists. I blame the neoconservatives who preach this stuff, who believe in it like a religion — that they have to promote American goodness even if you have to bomb and kill people.

In short, I don’t blame America; I blame neocons.

Ron Paul, MD, is a former three-time Republican candidate for U. S. President and Congressman from Texas.

This article is reprinted with permission from the Ron Paul Institute for Peace and Prosperity.

Why Open Borders? – Article by Jeffrey A. Tucker

Why Open Borders? – Article by Jeffrey A. Tucker

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The New Renaissance HatJeffrey A. Tucker
September 15, 2015
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Two dear friends of mine just experienced incredible struggles with immigration control in the United States, one from Australia and one from Canada. Both are enormously talented, in love with the freedom that America represents to the world — or once did anyway.

One barely got in after months of waiting, even though a willing, begging employer was waiting. The other was deported with a single day’s notice.

Each has been a captive of bureaucrats with awesome power. Their stories are tragic. Natives know nothing about this ghastly system and how it treats human beings. We never experience it.

The labyrinth of bureaucracy is jaw-dropping. The arbitrary power exercised by “our” bureaucrats is frightening. The loss to our nation’s productivity is mindboggling. Hearing these stories, you can’t help but apologize for the way our own government treats people who want to love this country and contribute to its greatness.

And to think that for the first 100 years of this country’s existence we had zero national immigration restrictions. The whole world was invited in — and this invitation led to the most prosperous society the world has ever known. In these times, there were no passports. For the most part, everyone was free to move around the earth — and this was thought to be the very essence of liberty.

Today, we have an effective ban on immigration. You can’t come to the U.S. to live and work legally unless you are family, highly educated, or get in as a refugee. Other than that, the barriers to legal immigration are impossibly high. The wait lines for employment visas are impossibly long, and people from the world’s largest population centers aren’t even eligible.

Meanwhile, the government spends $18 billion on stopping immigration — more than all other federal criminal enforcement agencies combined. This is money spent to stop people from freely exchanging labor for money. That the whole thing is a massive flop is revealed by the 11 million illegal immigrants in this country, and the half million apprehended crossing the border each year — surely only a fraction of those who were not.

But apparently, that’s not enough. Donald Trump is soaring in popularity by calling for mass deportations and building a wall around the country, in effort to double down on a failed government policy. Other candidates are alarmed at his rhetoric, but echo his core claim that there is some kind of crisis going on.

Meanwhile, this is a huge debate among people who otherwise swear fealty to “limited government.” Many people who claim to want freedom seem to have no problem with the implications of a closed-border policy: national IDs, national work permits, non-stop surveillance, harassment of all businesses, a “papers please” culture, mass deportation, tens of billions in waste, bureaucrats wrecking the American dream, broken families, the rights of Americans and foreigners transgressed at every turn.

In this environment of political hysteria, in which the rankest form of racial fear has reared its head, few dare to stand up and call for the only liberty-minded answer: open borders.

Just the phrase causes people to sputter in shock. The objections start flying: wages will fall, welfare will explode, people will vote for the wrong people, there will be cultural confusion, the national language will evaporate, crime will soar — on and on the parade of horribles marches.

The more you look into the research, the more these objections fall away. Immigrants cause less crime than natives. Immigration does not cause unemployment. Immigrants don’t consume more public benefits than natives; in fact, they use fewer. Indeed, they have kept Social Security afloat, even though they will never get a dime from the system. They don’t love liberty less: they poll in as more libertarian. Indeed, every one of these and other claims in Trump’s immigration policy paper are patently wrong.

Apparently, the facts don’t matter. And as for humane values and human rights, forget it. Immigration restriction is a fundamental attack the rights of at least two parties: the person who wants to employ someone currently outside the border and the person who wants to come work. It’s a thuggish interference with an economic exchange, like any other arbitrary restriction on trade.

So often, in many recent discussions I’ve had online, what’s going on here is just a shoot-from-hip bias. It’s exactly the same kind of fears that make people object to getting rid of the minimum wage, cutting taxes, eliminating tariffs, privatizing the TSA, eliminating zoning laws, cutting government spending, legalizing pot, and so on.

It’s freedom itself that people fear.

Once freedom goes away, it is difficult to imagine how things would work if it came back. The notion of freedom then scares people, and it becomes easy to think up a thousand different scenarios in which freedom can’t possibly work. Surely disaster will ensue!

This was a problem during alcohol Prohibition. The system wasn’t working, but the prospect of making its consumption and production legal again elicited a kind of panic. Would our streets be filled with staggering drunks? Would scarce income be squandered on liquor? Would families break apart?

The lack of imagination concerning how freedom can work is the single biggest barrier in the U.S. to ending the war on immigration.

Imagine if the U.S. had massive border controls between states, with checkpoints and passports and drug-sniffing dogs, and if you had to have permission to change from a job in Ohio to a job in Vegas, or if a Virginian could be deported from New Jersey for overstaying, or if you had to wait years to obtain the right documentation to move from one state to another, or if the labor market was so tightly regulated that an employer in another state could only hire you if they could prove they had no other options.

If all that were true, anyone who suggested open borders and a free labor market between states in the U.S. would be considered a dangerous loon.

But here is the clarifying fact: the conditions that allow free migration between states within the U.S. are identical with regard to free migration between the U.S., Mexico, and Canada. The only difference happens to be the government that issues citizenship documents.

I live in Georgia. What if I started a movement to prohibit immigrants from Chicago to Georgia? Why would I suggest such a crazy thing? Because I believe that crime is higher in Chicago, welfare is more widely used, their imported labor would drive down wages, they vote in ways that are regrettable, and people there just don’t get the ways of the American South.

Should we have immigration controls between states? It sounds preposterous (though Trump could probably sell the idea). But the claims that we can’t have free immigration into the U.S. follow the exact same logic.

Every argument for immigration restrictions into the United States as a whole applies with equal validity for immigration controls between states, counties, cities, and even towns. And yet we do not have such controls. Why does it work so well? Because freedom works.

How can we begin to imagine what open borders would be like? We need an experiment in that exact thing. It just so happens that we have just such an experiment. There are 28 countries that have historically been at war for thousands of years. They all have different languages, different religions, and different folkways. At various periods, people from these countries have hated each other to the point of causing genocide.

Then one day, starting with an agreement that began to be implemented twenty years ago (the Schengen Agreement), they opened all the borders. Anyone from these countries can live and work anywhere. They can travel freely, on the same passports. No bureaucracy stops their freedom of movement and their freedom to produce.

The results have been spectacular. It’s the greatest experiment in completely open borders the world has seen in more than a century. It’s called the European Union. And it works. It points toward the ideal: a world in which everyone is free to move about the earth without fear of gun, wall, or barbed wire.

Let’s not fear freedom and free trade (which means, free trade in capital and labor). In the end, Ludwig von Mises was right: “Without the reestablishment of freedom of migration throughout the world, there can be no lasting peace.”

Jeffrey Tucker is Chief Liberty Officer of Liberty.me (http://liberty.me/join), a subscription-based, action-focused social and publishing platform for the liberty-minded. He is also distinguished fellow of the Foundation for Economic Education (http://fee.org), executive editor of Laissez-Faire Books, research fellow of the Acton Institute, founder of the CryptoCurrency Conference, and author of six books. He is available for speaking and interviews via tucker@liberty.me.

The Real Refugee Problem – And How To Solve It – Article by Ron Paul

The Real Refugee Problem – And How To Solve It – Article by Ron Paul

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The New Renaissance HatRon Paul
September 7, 2015
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Last week Europe saw one of its worst crises in decades. Tens of thousands of migrants entered the European Union via Hungary, demanding passage to their hoped-for final destination, Germany.

While the media focuses on the human tragedy of so many people uprooted and traveling in dangerous circumstances, there is very little attention given to the events that led them to leave their countries. Certainly we all feel for the displaced people, especially the children, but let’s not forget that this is a man-made crisis and it is a government-made crisis.

The reason so many are fleeing places like Syria, Libya, Afghanistan, and Iraq is that US and European interventionist foreign policy has left these countries destabilized with no hopes of economic recovery. This mass migration from the Middle East and beyond is a direct result of the neocon foreign policy of regime change, invasion, and pushing “democracy” at the barrel of a gun.

Even when they successfully change the regime, as in Iraq, what is left behind is an almost uninhabitable country. It reminds me of the saying attributed to a US major in the Vietnam War, discussing the bombing of Ben Tre: “It became necessary to destroy the town in order to save it.”

The Europeans share a good deal of blame as well. France and the UK were enthusiastic supporters of the attack on Libya and they were early backers of the “Assad must go” policy. Assad may not be a nice guy, but the forces that have been unleashed to overthrow him seem to be much worse and far more dangerous. No wonder people are so desperate to leave Syria.

Most of us have seen the heartbreaking photo of the young Syrian boy lying drowned on a Turkish beach. While the interventionists are exploiting this tragedy to call for direct US attacks on the Syrian government, in fact the little boy was from a Kurdish family fleeing ISIS in Kobane. And as we know there was no ISIS in either Iraq or Syria before the 2003 US invasion of Iraq.

As often happens when there is blowback from bad foreign policy, the same people who created the problem think they have a right to tell us how to fix it – while never admitting their fault in the first place.

Thus we see the disgraced General David Petraeus in the news last week offering his solution to the problem in Syria: make an alliance with al-Qaeda against ISIS! Petraeus was head of the CIA when the US launched its covert regime-change policy in Syria, and he was in charge of the “surge” in Iraq that contributed to the creation of al-Qaeda and ISIS in Iraq and Syria. The idea that the US can salvage its disastrous Syria policy by making an alliance with al-Qaeda is horrific. Does anyone think the refugee problem in Syria will not be worse if either al-Qaeda or ISIS takes over the country?

Here is the real solution to the refugee problem: stop meddling in the affairs of other countries. Embrace the prosperity that comes with a peaceful foreign policy, not the poverty that goes with running an empire. End the Empire!

Ron Paul, MD, is a former three-time Republican candidate for U. S. President and Congressman from Texas.

This article is reprinted with permission from the Ron Paul Institute for Peace and Prosperity.

Greece Today, America Tomorrow? – Article by Ron Paul

Greece Today, America Tomorrow? – Article by Ron Paul

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The New Renaissance HatRon Paul
July 14, 2015
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The drama over Greece’s financial crisis continues to dominate the headlines. As this column is being written, a deal may have been reached providing Greece with yet another bailout if the Greek government adopts new “austerity” measures. The deal will allow all sides to brag about how they came together to save the Greek economy and the European Monetary Union. However, this deal is merely a Band-Aid, not a permanent fix to Greece’s problems. So another crisis is inevitable.

The Greek crisis provides a look into what awaits us unless we stop overspending on warfare and welfare and restore a sound monetary system. While most commentators have focused on Greece’s welfare state, much of Greece’s deficit was caused by excessive military spending. Even as its economy collapses and the government makes (minor) cuts in welfare spending, Greece’s military budget remains among the largest in the European Union.

Despite all the handwringing over how the phony sequestration cuts have weakened America’s defenses, the United States military budget remains larger than the combined budgets of the world’s next 15 highest spending militaries. Little, if any, of the military budget is spent defending the American people from foreign threats. Instead, the American government wastes billions of dollars on an imperial foreign policy that makes Americans less safe. America will never get its fiscal house in order until we change our foreign policy and stop wasting trillions on unnecessary and unconstitutional wars.

Excessive military spending is not the sole cause of America’s problems. Like Greece, America suffers from excessive welfare and entitlement spending. Reducing military spending and corporate welfare will allow the government to transition away from the welfare state without hurting those dependent on government programs. Supporting an orderly transition away from the welfare state should not be confused with denying the need to reduce welfare and entitlement spending.

On reason Greece has been forced to seek bailouts from its EU partners is that Greece ceded control over its currency when it joined the European Union. In contrast, the dollar’s status as the world’s reserve currency is the main reason the US has been able to run up huge deficits without suffering a major economic crisis. The need for the Federal Reserve to monetize ever-increasing levels of government spending will eventually create hyperinflation, which will lead to increasing threats to the dollar’s status. China and Russia are already moving away from using the dollar in international transactions. It is only a matter of time before more countries challenge the dollar’s reserve currency status, and, when this happens, a Greece-style catastrophe may be unavoidable.

Despite the clear dangers of staying on our recent course, Congress continues to increase spending. The only real debate between the two parties is over whether we should spend more on welfare or warfare. It is easy to blame the politicians for our current dilemma. But the politicians are responding to demands from the people for greater spending. Too many Americans believe they have a moral right to government support. This entitlement mentally is just as common, if not more so, among the corporate welfare queens of the militarily-industrial complex, the big banks, and the crony capitalists as it is among lower-income Americans.

Congress will only reverse course when a critical mass of people reject the entitlement mentality and understand that the government is incapable of running the world, running our lives, and running the economy. Therefore, those of us who know the truth must spread the ideas of, and grow the movement for, limited government, free markets, sound money, and peace.

Ron Paul, MD, is a former three-time Republican candidate for U. S. President and Congressman from Texas.

This article is reprinted with permission from the Ron Paul Institute for Peace and Prosperity.

Will Seizure of Russian Assets Hasten Dollar Decline? – Article by Ron Paul

Will Seizure of Russian Assets Hasten Dollar Decline? – Article by Ron Paul

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The New Renaissance HatRon Paul
June 23, 2015
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While much of the world focused last week on whether or not the Federal Reserve was going to raise interest rates, or whether the Greek debt crisis would bring Europe to a crisis, the Permanent Court of Arbitration in The Hague awarded a $50 billion judgment to shareholders of the former oil company Yukos in their case against the Russian government. The governments of Belgium and France moved immediately to freeze Russian state assets in their countries, naturally provoking the anger of the Russian government.

The timing of these actions is quite curious, coming as the Greek crisis in the EU seems to be reaching a tipping point and Greece, having perhaps abandoned the possibility of rapprochement with Europe, has been making overtures to Russia to help bail it out of its mess. And with the IMF’s recent statement pledging its full and unconditional support to Ukraine, it has become even more clear that the IMF and other major multilateral institutions are not blindly technical organizations, but rather are totally subservient lackeys to the foreign policy agenda emanating from Washington. Toe the DC party line and the internationalists will bail you out regardless of how badly you mess up, but if you even think about talking to Russia you will face serious consequences.

The United States government is desperately trying to cling to the notion of a unipolar world, with the United States at its center dictating foreign affairs and monetary policy while its client states dutifully carry out instructions. But the world order is not unipolar, and the existence of Russia and China is a stark reminder of that. For decades, the United States has benefited as the creator and defender of the world’s reserve currency, the dollar. This has enabled Americans to live beyond their means as foreign goods are imported to the US while increasingly worthless dollars are sent abroad. But is it any wonder after 70-plus years of a depreciating dollar that the rest of the world is rebelling against this massive transfer of wealth?

The Europeans tried to form their own competitor to the dollar, and the resulting euro is collapsing around them as you read this. But the European Union was never considered much of a threat by the United States, existing as it does within Washington’s orbit. Russia and China, on the other hand, pose a far more credible threat to the dollar, as they have both the means and the motivation to form a gold-backed alternative monetary system to compete against the dollar. That is what the US government fears, and that is why President Obama and his Western allies are risking a cataclysmic war by goading Russia with these politically motivated asset seizures. Having run out of carrots, the US is resorting to the stick.

The US government knows that Russia will not blithely accept Washington’s dictates, yet it still reacts like a petulant child flying into a tantrum whenever Russia dares to exert its sovereignty. The existence of a country that won’t kowtow to Washington’s demands is an unforgivable sin, to be punished with economic sanctions, attempting to freeze Russia out of world financial markets; veiled threats to strip Russia’s hosting of the 2018 World Cup; and now the seizure of Russian state assets.

Thus far the Russian response has been incredibly restrained, but that may not last forever. Continued economic pressure from the West may very well necessitate a Sino-Russian monetary arrangement that will eventually dethrone the dollar. The end result of this needless bullying by the United States will hasten the one thing Washington fears the most: a world monetary system in which the US has no say and the dollar is relegated to playing second fiddle.

Ron Paul, MD, is a former three-time Republican candidate for U. S. President and Congressman from Texas.

This article is reprinted with permission from the Ron Paul Institute for Peace and Prosperity.

Political Murders in Kiev, US Troops to Ukraine – Article by Ron Paul

Political Murders in Kiev, US Troops to Ukraine – Article by Ron Paul

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The New Renaissance Hat
Ron Paul
April 22, 2015
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Last week two prominent Ukrainian opposition figures were gunned down in broad daylight. They join as many as ten others who have been killed or committed suicide under suspicious circumstances just this year. These individuals have one important thing in common: they were either part of or friendly with the Yanukovych government, which a US-backed coup overthrew last year. They include members of the Ukrainian parliament and former chief editors of major opposition newspapers.While some journalists here in the US have started to notice the strange series of opposition killings in Ukraine, the US government has yet to say a word.Compare this to the US reaction when a single opposition figure was killed in Russia earlier this year. Boris Nemtsov was a member of a minor political party that was not even represented in the Russian parliament. Nevertheless the US government immediately demanded that Russia conduct a thorough investigation of his murder, suggesting the killers had a political motive.As news of the Russian killing broke, Chairman of the House Foreign Affairs Committee Ed Royce (R-CA) did not wait for evidence to blame the killing on Russian president Vladimir Putin. On the very day of Nemtsov’s murder, Royce told the US media that, “this shocking murder is the latest assault on those who dare to oppose the Putin regime.”Neither Royce, nor Secretary of State John Kerry, nor President Obama, nor any US government figure has said a word about the series of apparently political murders in Ukraine.

On the contrary, instead of questioning the state of democracy in what looks like a lawless Ukraine, the Administration is sending in the US military to help train Ukrainian troops!

Last week, just as the two political murders were taking place, the US 173rd Airborne Brigade landed in Ukraine to begin training Ukrainian national guard forces – and to leave behind some useful military equipment. Though the civil unrest continues in Ukraine, the US military is assisting one side in the conflict – even as the US slaps sanctions on Russia over accusations it is helping out the other side!

As the ceasefire continues to hold, though shakily, what kind of message does it send to the US-backed government in Kiev to have US troops arrive with training and equipment and an authorization to gift Kiev with some $350 million in weapons? Might they not take this as a green light to begin new hostilities against the breakaway regions in the east?

The Obama administration is so inconsistent in its foreign policy. In some places, particularly Cuba and Iran, the administration is pursuing a policy that looks to diplomacy and compromise to help improve decades of bad relations. In these two cases the administration realizes that the path of confrontation has led nowhere. When the president announced his desire to see the end of Cuba sanctions, he stated very correctly that, “…we are ending a policy that was long past its expiration date. When what you’re doing doesn’t work for fifty years, it’s time to try something new.”

So while Obama is correctly talking about sanctions relief for Iran and Cuba, he is adding more sanctions on Russia, backing Saudi Arabia’s brutal attack on Yemen, and pushing ever harder for regime change in Syria. Does he really believe the rest of the world does not see these double standards? A wise consistency of non-interventionism in all foreign affairs would be the correct course for this and future US administrations. Let us hope they will eventually follow Obama’s observation that, “it’s time to try something new.”

Ron Paul, MD, is a former three-time Republican candidate for U. S. President and Congressman from Texas.

This article is reprinted with permission from the Ron Paul Institute for Peace and Prosperity.

Interventionism Kills: Post-Coup Ukraine One Year Later – Article by Ron Paul

Interventionism Kills: Post-Coup Ukraine One Year Later – Article by Ron Paul

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The New Renaissance Hat
Ron Paul
March 29, 2015
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It was one year ago in February that a violent coup overthrew the legally elected government of Ukraine. That coup was not only supported by US and EU governments — much of it was actually planned by them. Looking back at the events that led to the overthrow it is clear that without foreign intervention Ukraine would not be in its current, seemingly hopeless situation.

By the end of 2013, Ukraine’s economy was in ruins. The government was desperate for an economic bailout and then-president Yanukovych first looked west to the US and EU before deciding to accept an offer of help from Russia. Residents of south and east Ukraine, who largely speak Russian and trade extensively with Russia were pleased with the decision. West Ukrainians who identify with Poland and Europe began to protest. Ukraine is a deeply divided country and the president came from the eastern region.

At this point the conflict was just another chapter in Ukraine’s difficult post-Soviet history. There was bound to be some discontent over the decision, but if there had been no foreign intervention in support of the protests you would likely not be reading this column today. The problem may well have solved itself in due time rather than escalated into a full-out civil war. But the interventionists in the US and EU won out again, and their interventionist project has been a disaster.

The protests at the end of 2013 grew more dramatic and violent and soon a steady stream of US and EU politicians were openly participating, as protesters called for the overthrow of the Ukrainian government. Senator John McCain made several visits to Kiev and even addressed the crowd to encourage them.

Imagine if a foreign leader like Putin or Assad came to Washington to encourage protesters to overthrow the Obama Administration!

As we soon found out from a leaked telephone call, the US ambassador in Kiev and Assistant Secretary of State, Victoria Nuland, were making detailed plans for a new government in Kiev after the legal government was overthrown with their assistance.

The protests continued to grow but finally on February 20th of last year a European delegation brokered a compromise that included early elections and several other concessions from Yanukovych. It appeared disaster had been averted, but suddenly that night some of the most violent groups, which had been close to the US, carried out the coup and Yanukovych fled the country.

When the east refused to recognize the new government as legitimate and held a referendum to secede from the west, Kiev sent in tanks to force them to submit. Rather than accept the will of those seeking independence from what they viewed as an illegitimate government put in place by foreigners, the Obama administration decided to blame it all on the Russians and began imposing sanctions!

That war launched by Kiev has lasted until the present, with a ceasefire this month brokered by the Germans and French finally offering some hope for an end to the killing. More than 5,000 have been killed and many of those were civilians bombed in their cities by Kiev.

What if John McCain had stayed home and worried about his constituents in Arizona instead of non-constituents 6,000 miles away? What if the other US and EU politicians had done the same? What if Victoria Nuland and US Ambassador Geoffrey Pyatt had focused on actual diplomacy instead of regime change?

If they had done so, there is a good chance many if not all of those who have been killed in the violence would still be alive today. Interventionism kills.

Ron Paul, MD, is a former three-time Republican candidate for U. S. President and Congressman from Texas.

This article is reprinted with permission from the Ron Paul Institute for Peace and Prosperity.