U.S. President Donald Trump, flanked by Senior Advisor Jared Kushner (standing, L-R), Vice President Mike Pence and Staff Secretary Rob Porter welcomes reporters into the Oval Office for him to sign his first executive orders at the White House in Washington, U.S. January 20, 2017. REUTERS/Jonathan Ernst TPX IMAGES OF THE DAY
When Donald Trump first ran for president in 2016, the familiar notion that a successful businessman would “run the government like a business” reemerged. We’ve heard this whenever a successful entrepreneur, usually a Republican, has run for president. Of course, the government cannot be run like a business for reasons I provided in 2012 when Mitt Romney was the latest candidate who would purportedly do so.
In short, the private marketplace runs on voluntary exchanges while the government runs on force. Success in the former does not prepare one for success in the latter. It may even make one less prepared for the intrigues of politics, as Donald Trump, Jr. seemed to be saying in his recent interview of Matt Taibbi.
But free market proponents often make the further mistake of assuming that a successful business owner will at least be prone to pro-free market policies. After all, who knows better the blessings of capitalism than a capitalist himself or herself?
This is also mistaken. While running their businesses in the marketplace, successful entrepreneurs are a great boon to society. But when it comes to policy, capitalists are terrible for capitalism. Among history’s most successful capitalists this has virtually always been true.
For the entire history of commerce, business owners have sought the aid of government power to limit or eliminate competition. In 1807, long before the Progressive Era, the New York State legislature granted Robert Fulton, inventor of the steamboat, a 30-year monopoly on steamboat traffic in the state of New York. As Thomas DiLorenzo writes in How Capitalism Saved America, this allowed Fulton to charge exorbitantly high prices until Cornelius Vanderbilt defied the legal monopoly and undercut him.
The Progressive Era itself was a bonanza of crony capitalism. The popular myth about this period has so-called “robber barons” forming monopolies and exploiting customer and employee alike until progressives like Teddy Roosevelt came along to save the day with heavy government regulation.
As Murray Rothbard proved beyond any reasonable doubt, literally no element of this popular myth is true. In fact, it is the opposite of the truth. It is true that hugely successful business owners like John D. Rockefeller and J.P. Morgan attempted to form monopolies over various sectors of the economy. However, every attempt to do so without the government’s help ended in failure.
“You asked for miracles, I give you the F.B.I.” So said Hans Gruber, one of the greatest movie villains of all time, played to perfection by the late Alan Rickman. Gruber and his gang are thieves posing as terrorists and need to defeat an electromagnetic lock protecting hundreds of millions of dollars in securities. Although they are unable to do so themselves, Gruber tells his hacker, Theo, not to worry.
What does Gruber know that Theo does not? He knows the U.S. federal government and what local cop Al Johnson calls their “universal terrorist playbook.” The F.B.I. arrives on the scene of the supposed terrorist hostage situation and immediately orders a reluctant city employee to shut down power for ten square blocks of Los Angeles in order to cut off power to the target building. The worker complies and power to the building and the electromagnetic lock protecting the securities is cut off.
One can’t help but laugh as the criminals gleefully charge into the vault to the tune of Beethoven’s Ninth Symphony. But it is no laughing matter that this is a perfect metaphor for U.S. foreign policy in general, and Middle Eastern policy in particular.
In the mid-1990s, Osama bin Laden effectively said the same thing as Gruber. Knowing he could never invade or otherwise fight the United States in its own hemisphere, he said he intended instead to provoke the U.S. into invading the Middle East where it could be defeated in a war or attrition, just as he and his fellow Mujahideen had previously defeated the Soviets. That provocation came on September 11, 2001.
It is unclear if Bin Laden was actually involved in the attacks. But they were certainly carried out by likeminded people and Bin Laden had no problem with allowing Americans to assume he was the mastermind. The attacks did just what Bin Laden hoped they would do – get the U.S. to run the “universal terrorist playbook,” meaning going to war in the Middle East where its soldiers could be killed more easily, and its finances drained.
Twenty-three years later, the big, dumb U.S. empire hasn’t learned a thing. In those two decades, federal government debt has skyrocketed from less than $6 trillion to over $30 trillion. Interest on the debt alone is now over $1 trillion per year. And what have American taxpayers, present and future, received for this enormous expenditure? The Taliban has been replaced with the Taliban. Iraq now has a Shiite government that is allied closely with Iran – the same Iran whose “influence in the region” Washington constantly warns against. Libya now has the most vibrant slave trade in African history.
The real tragedy here is success or failure in any of these endeavors doesn’t affect the lives of people living in the United States one way or another. It’s just a giant rip off that funnels trillions to connected defense contractors while allowing lifelong bureaucrats in the Administrative and Deep States to continue in the delusion that they’re running the world when instead they’re running the U.S. into the ground.
“Big Johnson” from Die Hard exemplifies these would be masters of the universe perfectly. He displays the precise combination of unbridled arrogance and cluelessness as he condescends to the local rubes while being played like a fiddle by Gruber as do the Tony Blinkens and Victoria Nulands of real-world D.C. Every faction in the Middle East has played the empire for its own ends while the empire stumbles around the region like a drunk looking for a brawl. Both Israel and its regional enemies have done so, often simultaneously. So have Washington’s supposed Islamic allies. The empire sees itself as James Bond; in reality its more like Lenny from Of Mice and Men. Puppies and pretty girls beware.
“Just say it. Cry out. Mercy,” said the magistrate to William Wallace in Mel Gibson’s Braveheart (1995). Wallace had already been drawn and quartered, so the king’s torturer was not offering to save his life. He promised only an end to the torture with a quicker, more merciful death.
The Wallace of the film refuses to speak the words the king’s magistrate commands and cries “Freedom!” instead. Realizing further torture will not produce the desired result, the magistrate reluctantly gives the order to cut off Wallace’s head.
Gibson’s film is short on historical accuracy but serves as a perfect metaphor for life in America today. The citizens of the former “land of the free” are being metaphorically tortured to say the words their rulers wish them to say, whether they be “safe and effective” or “they/them” or “plucky little democracy.” For some, like Gonzalo Lira, it is not metaphorical.
Lira was an American citizen, born in Burbank, California, and living in Ukraine – the supposed “plucky little democracy” – where he had two young children. Lira was arrested in May of 2023 and charged with violating laws prohibiting certain types of speech. Specifically, Lira criticized the Zelensky government, contradicted the narrative that the Russian invasion was unprovoked, and generally painted a much more pessimistic picture of Ukrainian success in the war than was claimed by the Ukrainian government and western media.
Importantly, virtually all of the “disinformation” Lira was accused of spreading turned out to be true. As Tucker Carlson has said on more than one occasion, one is not punished for lying about the regime. One is only punished for telling the truth.
That it was not the U.S. government that tortured and killed Lira directly should fool no one. Since the U.S. overthrew the democratically elected government of Ukraine (for the second time) in 2014, nothing has happened in that country that wasn’t either directed or given tacit approval by the U.S. government.” We have direct evidence of that from the leaked recording of Victoria Nuland discussing her plans for who would run Ukraine with Ambassador Geoffrey Pyatt.
This includes Zelensky’s nonstop shelling of civilian neighborhoods just before the Russian invasion in February 2022 and the imprisonment and death of Gonzalo Lira over the past several months.
As Daniel McAdams wrote in his piece about Lira, “One call from the White House or State Department could have saved California-born journalist Gonzalo Lira’s life.” But that phone call never came, because the U.S. government wasn’t interested in saving the life of a U.S. citizen critical of its pet project on Russia’s border. If it were, it certainly would have been easier to get Lira out of Ukraine than it was to get Brittney Griner out of Russia.
Dolly Parton is immensely talented and her talent has made her very rich. Not only can she sing, write songs, and act, but she has wisely kept control of the publishing rights to her music, meaning she receives royalties both on her own recordings of songs she wrote and those of others, like Whitney Houston’s mega-selling recording of “I Will Always Love You.” Forbes estimated her net worth at $350 million in 2021, attributing substantial portions to her publishing rights and to Dollywood, the theme park Parton cofounded in the 1980s.
As impressive as all of the above is, it begs the question: why isn’t Parton a billionaire like Paul McCartney, who doesn’t own the publishing rights to his most lucrative material, cowritten with John Lennon?
The answer given by numerous articles and popular social media memes is that Parton is not a billionaire because she has given away so much of her money to charity. One viral meme claims:
“Let’s be clear: Dolly Parton is a millionaire and not a billionaire because she *keeps giving money away. * Being a billionaire is MORAL FAILING. She gives away shockingly large amounts of money every year and is STILL RICHER THAN YOU AND I WILL EVER BE.”
Other variations encourage people to “be like Dolly.”
There are two assertions here to examine. The first is counterfactual. If Dolly Parton hadn’t given so much of her earnings away, would she today be a billionaire? It’s impossible to know for certain, but it’s certainly plausible, even likely. Let’s assume it’s true. That means Parton has foregone the accumulation of at least $650 billion in additional net worth by directing earnings she could otherwise have invested in profitable ventures towards charitable causes. The second assertion is that it is a “moral failing” to direct one’s own capital in the opposite way. This is demonstrably false even if one accepts the meme author’s moral premise.
Just as it was becoming impossible to deny the empire’s proxy war in Ukraine is lost, along comes another one.
How convenient.
Of course, we heard the usual pronouncements from U.S. politicians about their commitment to “our close ally Israel,” meaning their commitment to send billions of dollars to them, most of which will be spent with American defense contractors.
Anyone familiar with my writing over the past two decades can probably guess my position: no, not a penny. However, I also expressed my opposition to the empire dictating to Israel about how to respond. That’s the real reason for the foreign aid, besides enriching defense contractors. The empire buys compliance with its wishes.
For expressing these opinions, I was immediately called “antisemitic” on social media. If the source of this smear was the shrieking neocon harpy, Nikki Haley, or anyone of her ilk, I wouldn’t even bother to respond. But since some of this is coming from friends, both of the real world and social media variety, I thought I would write about this from a personal perspective.
I consider myself first and foremost an American. But like every American who ever lived, including “native Americans” [sic], my ancestors came from other countries. As you may have surmised from my surname, the ancestors on my father’s side came from Ireland.
So, how could an Irish American possibly understand having your country violently attacked by terrorists? Those of you with historical knowledge beyond three weeks ago are already chuckling. For the rest, Ireland was embroiled in a violent civil war for a large part of the 20th century. A religiously inspired, non-governmental paramilitary group launched frequent terrorist attacks on both government officials and civilians alike. They assassinated people. They kidnapped people. They bombed parades. You may remember a U2 song about one such incident. Good tune.
Peace was finally established in the 1990s, before I had formed much of a political philosophy. But were it still going on today, I would oppose any aid by the U.S. government to either side of the dispute and any U.S. intervention into the internal affairs of Ireland.
I suppose that makes me “anti-Celtic” to the terminally limbic currently parroting the empire’s “antisemitic” slur against me or anyone else who opposes U.S. involvement in the current conflict in Israel.
Let me say for the record that I do not hate my fellow Irishmen. That does not follow from my mere opposition to taxing Americans to subsidize them. Nor does my criticism of the Irish government’s abysmal Covid policies translate to hatred for the Irish people. One would think this goes without saying. Apparently, it doesn’t.
I can imagine there are some who consider my analogy a poor one. After all, Ireland is a “western” country of “white people” and can’t compare to what the Israelis are facing in the Middle East. While I don’t share that view, I will respond to it.
Perhaps I’ve buried the lede, but my mother’s ancestors came from Lebanon. Specifically, they were part of the Maronite Christian majority of that country before large influxes of Palestinian Muslims in 1948 and 1967. Some of my mother’s ancestors had already come to America to escape Ottoman rule before WWI. Her own parents came in the late 1920s after a financial crisis cleaned out my industrialist grandfather. But many are still there.
Beirut was once called, “The Paris of the Middle East.” It was a breathtakingly beautiful city in a country with a 5,000-year history of advanced civilization. It was all but destroyed by the same people the Israelis are fighting today.
I have relatives who were killed or displaced during the bloody civil war that raged in Lebanon 1975-90. Violence continues in Lebanon to this day thanks to the presence of Islamic paramilitary groups like Hezbollah (which is also a political party). It is not an exaggeration to say that Lebanon’s and Israel’s problems are virtually identical.
Still, I disapprove of the previous U.S. interventions in Lebanon and would oppose any new subsidies or interventions there in the future, even if ostensibly to rid Lebanon of the violent fanatics who have destroyed it. This doesn’t mean I hate my fellow Lebanese any more than I hate the Irish or the Jews, for that matter. It’s simply a political position. And it’s the right one, for several reasons.
First, I am in a political relationship (whether I like it or not) with 330 million or so other Americans, most of whom do not have familial relationships with people in Ireland or Lebanon. Said political relationship does not give me the right to force them to defend the countries of my ancestors any more than it gives them the right to do likewise to me.
I would consider it especially bad behavior on my part to try to shame other Americans into involving themselves in the affairs of other countries because I happen to have relatives there. And it would be foolhardy of them to allow me to do so.
Second, we already have quite a bit of data on the results of U.S. interventions in the Middle East and those data are not difficult to interpret. Every intervention has been an unmitigated disaster, without exception yielding results precisely opposite of the stated goals. Every. Single. One. And in return for this long train of debacles, American taxpayers have received nothing but $30 trillion in debt and an economy disproportionately skewed towards producing weapons of war that add nothing to their quality of life.
There is no reason to believe it’s going to be any different this time.
Lastly, for those naïve enough to believe the U.S. government’s involvement in this affair is humanitarian or based on any sympathy for the Jewish people, it isn’t. This is pure imperial politics, nothing more. The empire wishes to maintain its hegemony and this conflict will help it do that. It never stopped fighting the Cold War against Russia, despite the fall of the USSR.
Operating under the “Whoever controls Eurasia controls the world” thesis, the empire has done everything it can to keep Russia from establishing economic relationships with Europe or the Middle East. Thus the “humanitarian” regime-change operations in Syria and Ukraine throughout this century, in countries which “coincidentally” are home to Russia’s only warm water ports on this side of the world.
This is also the reason for the disproportionate hatred of Iran. Were Iran and Syria to form a “Shiite corridor” in the Middle East, Russia would have an opportunity to exert enormous influence in the region. That the Iraq War made this corridor far more possible by handing Iraq to the Iran-friendly Shiites is proof that the empire can be both evil and stupid at the same time.
Were Russia still supplying Europe with most of its energy through the Nordstream pipelines, the empire’s control over Eurasia would be seriously threatened.
So, the empire badgered the Russians into invading Ukraine and now has a proxy war in the Middle East to, at the very least, keep that region in a state of chaos, making it difficult for Russia (or China) to strengthen relationships there.
It’s also an opportunity for another large scale rip off of the American taxpayer. Notice that the media are already preparing the American public that this will be a “long war” that will require America’s full support. Translation: we’re about to lose Ukraine as a funding vehicle and we’re going to pivot back to the Middle East.
The empire will send billions to Israel because it wants Israel to respond to the Hamas attack in a way that will benefit the empire, not the Israeli or American people.
This not a binary choice between U.S. support or the destruction of Israel as a nation. Israel is a rich country with a modern military, including over 200 nuclear warheads. It could crush the Palestinians in Gaza in a single day and is capable of defeating every hostile nation in the region.
The empire doesn’t want that. It wants its “long war,” meaning years of funding, with complicated rules of engagement for the Israelis so that everyone can tell themselves the lie that they are not killing civilians. Meanwhile the empire can go on sucking the lifeblood out of both Israeli and American taxpayers for the benefit of its corporate partners.
One might be tempted to think it is at least a good thing that the empire restrains Israel. After all, no one wants to see the whole region turned to glass, no matter how heinous the attacks on Israel may have been.
Neither does Israel. When the war is over and the enemy defeated, Israel still has to go on existing in the region. It does them no good to create a desert around their country. Absent U.S. involvement, Israel would have to tailor its response to its consequences. It must do enough to eliminate the threat, if possible, while not going so far as to alienate the rest of the region.
Contrary to neocon talking points, Israel is not “surrounded by enemies bent on its destruction.” Egypt tried to warn Israel about the Hamas attack. Its government has no more love for the Palestinians than Israel does. Much progress has been made between Israel and its Muslim neighbors in the past decade. It is not in Israel’s nor its neighbors’ interests to return to 1967.
It is not in American taxpayers’ interest to be involved in this conflict. Americans are constantly told Israel is a “key ally” but are never told how they benefit from this alliance. They don’t. The empire benefits. And like every other empire in human history, its interests run contrary to those of its citizens.
Like Great Britain before it, America became the richest country in the world with a limited government and a free market economy. Also like Great Britain, it is bankrupting itself trying to maintain a global empire. Adding a proxy war in Israel to the debacle in Ukraine might just be the straw that breaks the camel’s back (no pun intended).
While the source of the danger is hotly disputed, one thing pundits across the political spectrum agree upon is that “our democracy is in danger.” Liberals believe former President Trump is the culprit based on his contention, right or wrong, that the votes in the 2020 election weren’t counted correctly. Tucker Carlson makes the equally obtuse claim that repression of free speech on private property is a threat to democracy.
The latter argument is doubly wrong since democracy has been a recognized danger to free speech since the drafting of the Constitution. Thus, the insistence upon a Bill of Rights that defended free speech against the democratically elected Congress.
At the risk of burying the lede, and for the sake of readers who may wish to make a thoughtful comment without scrolling past vast megabytes of midwittery to do so, I will address the republic-not-a-democracy thing before getting to my main point.
No, neither the United States nor any of its constituent states have ever been “a democracy.” The U.S. Constitution created a republic, with both democratic and anti-democratic elements. One could argue most of the document is anti-democratic – the bicameral legislature, the presidential veto, the appointed judiciary, and the enumerated powers. These are all there to protect us from democracy.
The Bill of Rights is wholly anti-democratic.
In fact, even the notion that elected representatives are supposed to do “the will of the people” is incorrect. The representatives are supposed to do what they think best for the public, regardless of the public’s wishes. “The people” are merely invested with the power to decide who decides. The framers believed this would work.
So, they built their Constitution to allow “the people” to directly elect one house of the bicameral legislature and then put a bunch of roadblocks in place to try and limit the damage such a preposterous plan would do to the property (life, liberty, possessions) of anyone who had anything to lose.
The 20th century saw systematic destruction of those roadblocks, beginning with the direct election of senators, denuding the state governments of any power to oppose the federal. It was during this period that Americans ceased calling their system of government “republic” and began imprecisely calling it “a democracy.” Today’s “our democracy” styling adds a quasi-religious and simultaneously childish connotation, appropriate to the population it governs.
Putting all of the above aside and just accepting that the republic can just as well be called “a democracy,” even that ended for all intents and purposes in the 1930s. The abominable FDR offered a “New Deal,” inspired by Mussolini, whom Roosevelt constantly referred to as “that estimable Italian gentleman,” or words to that effect, until his advisors told him to knock it off for reasons obvious with hindsight.
This New Deal proposed that the rules “the people” had to live under would no longer be made by legislators they elected. That made it too difficult to “get anything done.” No, under this new deal, unelected bureaucrats would make the rules, ostensibly at the direction of the elected president, but in practice wholly at their own discretion.
Americans not only liked the idea; they demanded it. So there would be no confusion on this, they elected the maniac who proposed it four consecutive times. So much for “our democracy.”
Another day, another set of classified documents found in President Joe Biden’s possession. Just in case anyone missed the first two times that this is an inside job by the Democratic Party to ensure somebody besides Biden heads the party’s presidential ticket in 2024, a third cache of documents was revealed on Saturday.
They’re so committed to making this an ongoing news story they’re even working weekends. It’s a old but effective trick to make one event that happened years in the past seem like multiple events recurring in the present. “Breaking! Five more classified documents discovered! Gasp! Red alert!”
The most important thing to remember about all of these classified documents scandals is what they are not. And that is they are not any real concern for the public. The media and interested political operatives would have you believe these documents contain information so sensitive that their falling into the wrong hands could result in us all speaking Russian or Chinese. They don’t.
The truth is there are very few secrets national governments try to keep that allies and adversaries alike haven’t stolen. The government likes to portray itself as secretly protecting the public from all sorts of unseen danger, both state-sponsored and otherwise. “If you only knew what goes on behind the scenes, you’d be terrified,” they’d like you to think. Many of the bureaucratic rank and file believe this themselves.
In reality, most of what even the national security state does is cooked up nonsense to justify legions of government drones and billions per year in wasted spending. The histrionics over the discovery of compromised classified material is usually just political posturing. If it weren’t, then we’d have seen some significant consequences by now from the classified documents stored on Hillary Clinton’s infamous private server, which even podunk governments in Eastern Europe and Africa probably have their hands on by now. We haven’t and we won’t.
When the alarm over mishandling of classified documents is genuine, it isn’t for fear of any danger to the public. Everyone should realize that’s the last thing these people are concerned about. What they are concerned about is the real reason most of these documents get classified in the first place: the embarrassing to themselves or potentially incriminating information the documents may contain.
One of my favorite moments in the Star Trek movie franchise occurs near the end of Star Trek III: The Search for Spock. The details of the plot aren’t important here, other than that the Klingon villain, Kruge, played by Christopher Lloyd, is holding Kirk, Spock, and an Enterprise landing party hostage on a planet that is in the process of destroying itself. Kruge threatens to doom himself and his hostages if Kirk doesn’t surrender something called, “the Genesis Device.”
Spock, who had died in the previous film, has been brought back to life by the Genesis device but is aging rapidly because of it and must get off the planet immediately or die. When Kruge has the rest of the landing party beamed up to his ship as prisoners, the following exchange occurs between Kirk and Kruge:
Kirk: Take the Vulcan, too.
Kruge: No!
Kirk: But, why?
Kruge: Because you wish it.
Kruge doesn’t know what is happening to Spock or why Kirk has an interest in getting Spock off the planet, especially considering he’d be Kruge’s prisoner. He only knows Kirk wishes it and anything Kirk desires is likely against his own interests.
What a wonderful analogy for so many of the figures who have stood up to oppose the Washington, D.C. empire over the past several years. I don’t agree on much with Donald Trump, Lauren Boebert, Marjorie Taylor Green, Matt Taibbi, Glenn Greenwald, or Bari Weiss. But it is apparent the empire fears and loathes these people and will do anything it can to destroy them.
Therefore, I am inclined to do whatever I can to defend them against the empire’s attacks. Should the empire deign to ask why I wouldn’t allow this collection of mercantilists, socialists, and statists (but I repeat myself) to be crushed, my answer is the same as Kruge’s:
“Because you wish it.”
The latest in this cast of opposition characters is self-described socialist Elon Musk. Musk claims to have purchased Twitter primarily to change its content moderation policies to allow for freer speech, something he claims is essential to “democracy.”
That all sounds wonderful to the average, miseducated American and there is good reason to believe Musk is sincere. He spent $44 billion on a company that currently makes $5 billion in gross revenues – and loses money. No likely combination of revenue growth or cost cutting will make this a wise business investment anytime soon.
Taking Musk at his word, it is worthwhile to unpack just what Musk is championing. On one hand, anything the empire is opposing this strenuously is on its face a good for the rest of us. But we should have open eyes about what Musk is offering in its place. There are several assumptions most people take for granted that need to be challenged. They include free speech, democracy, and liberty.
Musk evidently shares the empire’s stated ideal of democracy as an end in itself. In deciding whether to allow former President Trump to return to Twitter, Musk held a Twitter poll. When it came out in favor of allowing Trump’s return, Musk tweeted the results with the Latin phrase, “Vox Populi Vox Dei (“the voice of the people is the voice of God”).
Of course, the American system has never assumed democracy is an end in itself. On the contrary, it includes many anti-democratic elements alongside the democratic ones. The reason for having a bicameral legislature, presidential veto, independent judiciary, and Bill of Rights is to protect individuals and constituent polities from democracy.
That’s what makes Musk’s Trump poll so ironic. He suggests a majority vote has something to do with free speech when the First Amendment was written to defend free speech against democracy. The 2nd Amendment was written to protect the right to keep and bear arms against democracy. And so on with all ten amendments in the Bill of Rights, the last to protect individuals from the accumulation of power even in one, central government, however democratically elected its representatives.
Federal Reserve Board Chairman Jay Powell surprised no one on Wednesday by announcing the Fed has raised its target for the federal funds rate another 50 basis points to the 4.25% – 4.50% range. What did surprise the stock markets, based upon the sharp selloff following his remarks, was his statement,
“Restoring price stability is essential to set the stage for achieving maximum employment and stable prices over the longer run. The historical record cautions strongly against prematurely loosening policy. We will stay the course, until the job is done”
That’s basically what he has said during every public announcement since embarking on an historically steep round of interest rate hikes over the past six months. That this surprised investors indicates how deeply ingrained the “Fed put” has become in the psyche of the financial community. The stock markets continue to fluctuate below their all-time highs, therefore everyone assumes the Fed will announce a “pivot” at the next meeting, since it always in the past.
So, as each meeting approaches, the market begins to rally in anticipation of an announcement or even a hint of said pivot at Powell’s press conference. Then, Powell reads the same statement he has given after every previous meeting and the market sells off.
Needless to say, this is a terrible way for capital to be allocated, even given the existence of a central bank in lieu of a free market. But over a decade of zero interest rate policy (ZIRP) has trained investors to act even more irrationally and for equity prices to become even more separated from fundamentals than they have been in the past.
The Fed’s Balance Sheet
Ironically, Powell made another statement which is demonstrably false and is receiving no attention from investors or the financial media. He said, “In addition, we are continuing the process of significantly reducing the size of our balance sheet.”
The Fed has not significantly reduced its balance sheet. Let’s remember that in August 2019, the Fed’s balance sheet stood at approximately $3.7 trillion, down from its peak of $4.4 trillion 2014-17. The Fed reversed its modest tightening policy and began easing, increasing its balance sheet to $4.1 trillion by February 2020.
Once the Covid-19 lockdowns began, the Fed exploded its balance sheet to over $7 trillion in just three months, eventually taking the total to $8.9 trillion by March 2022.
One would think that “significantly reducing the balance sheet” would mean something more than Powell’s announced plan to reduce it by a mere $45 billion per month June-August 2022 and then by $90 billion per month every month thereafter. But the Fed hasn’t even managed to do that. As of this writing, the Fed’s assets still total almost $8.6 trillion.
In other words, while the Fed has raised the federal funds rate significantly this year, it has not attempted to reduce the supply of money. As a result, M2 has barely decreased since its peak of $21.8 trillion in March 2022. And without decreasing the money supply, the Fed cannot significantly reduce price inflation anytime soon.
While much of American politics in the 21st century has been dominated by foreign policy, the past two and a half years have not. The hysterical government response to Covid-19 forced Americans to shift their focus back home and grapple with basic questions of liberty in the face of an increasingly totalitarian state.
Former President Trump has a checkered record at best on Covid. While he maintains to this day locking down American “saved millions of lives,” he did ultimately leave that decision to the states, administratively, if not financially.
Unfortunately, while Republican governors were generally less severe in imposing lockdown policies and tended to begin easing them more quickly than Democratic governors, very few took a principled stand. Exceptions that rule were Governors Kristi Noem of South Dakota and Ron DeSantis of Florida.
Noem deserves top honors on principle for never locking down her state a single day. She also took the most libertarian approach to Covid vaccines, neither mandating them nor prohibiting businesses or other private organizations from mandating them on their own property.
DeSantis was the first governor to drop all statewide Covid restrictions and was more willing to use government power against the private sector in both prohibiting vaccine mandates and in combatting “woke” cultural issues according to the preferences of his supporters.
Both Noem and DeSantis were rewarded with landslides in 2022 after having won much narrower victories in 2018. Both correctly cited their stands for individual liberty during the pandemic as political risks that paid off in their acceptance speeches.
While Noem’s policies were much purer on these grounds, DeSantis is the governor of a much more populous and politically important state. Unsurprisingly, he has emerged as a credible challenger to Donald Trump for the 2024 Republican nomination for president.
Having listened to DeSantis’ stirring victory speech on November 9, I couldn’t help wondering what a DeSantis presidency might look like. While DeSantis is certainly a more polished politician and more disciplined person than Trump, and while I would have rather lived in Florida in January 2021 than California, I couldn’t help being concerned about DeSantis’ foreign policy instincts.
Like Governor Noem, DeSantis has had few opportunities to opine on foreign policy. Also, like Noem, DeSantis has on those occasions spouted generic, establishment rhetoric about the threat China represents.
More telling is DeSantis’ record in Congress, to which he was elected as a veteran and supporter of the Iraq War. DeSantis opposed Obama’s war ambitions in Syria, as did a lot of Republicans just because it was Obama. Otherwise, he sounded much more like a neocon.
He supported President Trump’s decision not to withdraw from Afghanistan in 2017 making all the arguments one might expect from any establishment Republican. DeSantis certainly isn’t Liz Cheney or Adam Kinzinger, but he’s no Rand Paul, either.
Neither is Donald Trump, one would correctly argue, but here is the rub. Trump seems to have a genuine aversion to war that not only exceeds that of most of the politicians in his party, but even that of most of his supporters.
