George H.W. Bush

Paul Craig Roberts ~ USA To Continue Its Wars As Long As Dollar Remains Reserve Currency

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Paul Craig Roberts | September 25 2012

Pravda.Ru interviewed Paul Craig Roberts, an American economist, who served as an Assistant Secretary of the Treasury in the Reagan Administration and became a co-founder of Reaganomics – the economic policies promoted by the U.S. President Ronald Reagan during the 1980s. We asked Mr. Roberts to share his views about the current state of affairs inside and outside the United States.

Pravda.Ru: Mr. Roberts, you are known in Russia as the creator of Reaganomics, which helped the country overcome stagflation. What were the key aspects of that policy and how would you estimate its results today? Do you think your faith in free market has shattered?

Paul Craig Roberts: Free market means the freedom of price to adjust to supply and demand. It does not mean the absence of regulation of human behavior.

Reaganomics was a political word for supply-side economics, a new development in economic theory. In the post World War 2 western world, governments used Keynesian demand management economic policy to control inflation and to boost employment. John Maynard Keynes was the British economist who explained the Great Depression in the West as a consequence of insufficient aggregate demand to maintain full employment and stable prices.

Keynesian demand management relied on government budget deficits and easy monetary policy (money creation) to stimulate demand for goods and services. To control inflation from too much demand for goods and services, high tax rates were used to reduce disposable income.

The problem that developed is that the high tax rates on income made leisure inexpensive in terms of lost current earnings from not working, and made current consumption inexpensive in terms of lost future income from not saving and investing. In other words, high tax rates on income made leisure and current consumption cheap in terms of foregone present and future income. Thus, high tax rates on income depressed the supply of labor and capital.

Using the UK’s 98% tax rate on investment income (pre-Thatcher), the Nobel economist Milton Friedman illustrated the problem with this example. You are an Englishman with $100,000. Shall you invest it for future income, or shall you purchase a Rolls Royce and enjoy life? The true price of the Rolls Royce (or Bentley, or Ferrari or Maserati) is not the purchase price. The price of the exotic car is the foregone future income from not investing the $100,000.

Suppose you could earn 10% on the $100,000. That would be $10,000 per year as the cost of purchasing the luxury car. But after tax (98%) the car would only cost $200 per year, a very cheap price.

The same example works for labor and salary income. Because of the high marginal tax rates, many professionals such as medical doctors closed their practices on Fridays and went to the golf course.

By changing the policy mix, that is by tightening monetary policy and reducing marginal tax rates (the tax rate on increases in income), the supply-side economic policy of the Reagan administration caused aggregate supply to increase. Thus output expanded relative to demand, and inflation declined.

This supply-side policy was instrumental as Reagan’s first step toward ending the cold war with the Soviet Union. As long as the US economy was afflicted with stagflation–the simultaneous rise in both inflation and unemployment, the Soviet government saw capitalism failing along with communism. But when Reagan corrected the economic problem, it made the Soviet government unsure that it could withstand an arms race.

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Powerful New Video Explores How Agenda 21 Will Affect You

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The New American | September 24 2012

 While most Americans remain blissfully unaware, the United Nations “sustainable development” scheme known as Agenda 21 will affect virtually every area of life — and it is already here. A short new documentary about the UN plan, using the global organization’s own documents and other sources, explores the implications of this far-reaching agenda and what it means to you and your family.

The film emphasizes the obvious importance of protecting the environment — everybody wants clean air and clean water. However, as the documentary points out, when environmentalism came to a fork in the road, the agenda took one route while the rhetoric took another. For those concerned with freedom, the picture appears grim at first.

America, of course, was founded on the principles of individual liberty and God-given rights, which include the ownership of private property. “Private property and freedom are inseparable,” reads a quote from George Washington cited in the documentary. The Founding Fathers also understood the danger of big government, even waging a war for independence against what was then the most powerful big government on earth — the British Crown.

Beginning some three decades ago, however, the UN began its push to allegedly “save the environment” and achieve what it called “sustainable development.” The short documentary — entitled Agenda 21: How Will It Affect You? — introduces viewers to some of the key players in the scheme including socialist Gro Harlem Brundtland, one of the chief architects of the UN plan.

The film also goes through important milestones such as the 1992 “Earth Summit” in the global effort to impose “sustainability” on the people of the planet. At that crucial conference two decades ago, rulers from all over the world came together and created what came to be known as “Agenda 21.” It quickly became clear what the scheme was about.

“Current lifestyles and consumption patterns of the affluent middle class — involving high meat intake, the use of fossil fuels, electrical appliances, home and work-place air-conditioning and suburban housing — are not sustainable,” noted Earth Summit Secretary-General Maurice Strong as he ushered in Agenda 21. In other words, the UN sustainability agenda eventually seeks to curtail people’s choices in terms of food, transportation, housing — even family size, as in Communist China.

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Marilyn MacGruder Barnewall ~ Cycles Of A Nation Called America (4 of 4)

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News With Views | August 19 2012 | Thanks, Minty

[Note: This is article 3 of a four part series. You can read part 1 here, part 2 here. and Part 3. The original article explaining the differences between Actives and Passives is here.]

Active investors innovate… they are the independent business owners of the world. Passives build on the creative energies of the Active group. Passive investors like things “big” because big is safer than small. Actives are risk managers; Passives are risk avoiders who use the words “risk taking” rather than “risk management.” Actives are conservative; Passives are liberal.

In the fall of 1970, Henry Kissinger made a secret trip to China. Nixon met with the Chinese communists in 1972 to discuss international trade (and to give them intelligence information about the Soviet Union). American economic stability began to be dependent upon and controlled by international, not national, markets. A new phenomenon emerged: the military-industrial complex. Change was in the wind and change is disliked by those with low-risk management skills (Passives).

In 1960, traditional social values were rejected by Hippies and Yippies … a fitting end to a Passive cycle. A drug culture emerged and the Active cycle began that very year. When we move into an active cycle, we almost always have an economic base change (never when going from Active to Passive). In 1960, we moved from an industrial/manufacturing base to technology, information, and service. In the late 1980s, George Herbert Walker Bush began talking about a “New World Order.” Americans didn’t like it and he lost his Presidential bid for re-election.

Traditional political values were questioned. Previously unheard of demonstrations against America’s military and political involvement in the Vietnam War – a war started by Passives and ended by Actives – were almost daily occurrences. Non-traditional civil rights for minorities caused rebellion in our streets. Those who fought in Vietnam were spat upon by Passives as they returned from their military service. Passives ran away to Canada. Active citizens inherited in 1960 a government grown too big, too arrogant, and too motivated by power to control.

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Dave Lindorff ~ Democracies Don’t Start Wars, But Fake Democracies Sure Do!

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Nation Of Change | August 15 2012

We’ve all heard it said by our teachers when we were in school, we’ve all heard it said by politicians, including presidents: “Democracies don’t start wars.”

And yet we have had the decades-long American war on Vietnam, the Reagan invasion of Grenada, the LBJ invasion of the Dominican Republic, the George H.W. Bush invasion of Panama, the G.W. Bush back-to-back invasions of Afghanistan and Iraq, and now we have President Obama talking about launching an unprovoked war on Iran.

Is the much touted axiom wrong?

I don’t think so. I believe that in a democracy, where the will of the people is paramount, it would be very unlikely to have a country start a war. People generally don’t like war. They need to feel truly threatened or even under attack before they will accept the idea of their or anyone’s fathers, husbands, brothers and sons (and now mothers, wives, daughters and sisters) being marched off to face the horrors of war.

Clearly the reason we have seen the US starting so many wars is that the US is and has not for a very long time been anything approaching a democracy.

Democracy in the US is a purely formalistic thing. People get to vote once every two and four years to chose from a narrow list of pre-selected candidates approved by the real rulers of the country, who are the wealthy owners of the large business interests, many of which prosper when there’s a war on, and many more of which are happy to have periodic wars, or the threat of wars, to keep people in line and willing to tolerate the kind of abuse that is typically heaped on the average working person: financially starved school districts, starvation-level welfare grants, no public health system, rusting bridges, pot-holed roads, almost no public transit, and falling real wages, etc.

I think it’s largely true that real democracies do not start wars, but the endless string of wars big and small started by the US, particularly since the end of the Second World War, provide ample evidence that this country of ours has long since ceased to be democratic. In both domestic and foreign policy, the federal government does not reflect the true wishes of the broad public. If it did, as I wrote recently, polls suggest that we would have a much smaller military, we’d have a well-funded Social Security retirement program and Medicare for all, with better benefits, we’d have low-cost college education for all, we’d have clean air and water, we’d have serious action to combat global climate change, we’d have job programs to employ the jobless and policies to prevent the tax-subsidized shipping away of jobs to Mexico, China and elsewhere, we’d have a much more progressive tax structure with the rich paying much higher tax rates, we’d have bankers behind bars and breaking rocks. We’d also have legal marijuana, guaranteed paid vacations, solid protections for union organizing, unfettered abortion rights, and good schools for all our kids.

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Brandon Turbeville ~ Goldman Sachs Tied To The Sordid World Of The Monied Elite

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The Activist Post | April 19 2012

If anyone ever doubted that Goldman Sachs could get any sleazier than the reputation the institution has garnered over the last few years, recent discoveries regarding the major bank’s ties to underage prostitution have served to aid in sullying the name even further.

Earlier this month, Nicholas Kristof of the New York Times revealed in his article, “Financiers and Sex Trafficking,” that Goldman Sachs was a 16% stakeholder in one of the biggest public sex trafficking forums in the United States – Backpage.com.
I say “public sex trafficking forums” because Backpage is obviously publicly accessible, while more hardcore and illegal activities are clearly hidden from the view of the general citizen. This is because many of the patrons of such operations tend to be the very wealthy in addition to the average run-of-the-mill sexual deviant living in his basement who might be more likely to consult Backpage for its services.
For those unfamiliar with the story, Backpage is a website that provides ads for “escort services” all across the United States and in most metropolitan cities. Of course, many of these ads are placed and answered by consenting adults. However, it is also true that there is a great deal of evidence to show that Backpage plays a role in trafficking minors and women coerced into prostitution.
Interestingly enough, Backpage is owned by Village Voice Media (VVM), which also owns the Village Voice, SF Weekly, and LA Weekly. VVM is also the company where Goldman Sachs held about 16% of stock. Not only that, but Scott L. Lebovitz, who was a Goldman Sachs managing director who Goldman claims stepped down in 2010, sat on the Village Voice Media board for years.

These reports triggered a cascade of protests from members of the anti-trafficking and religious communities, as well as calls from U.S. Senators for Village Voice Media to shut down the Backpage website.

After the New York Times’ expose, Goldman Sachs sold their holdings in Village Voice Media and, by and large, the bank has once again escaped large-scale criticism. Yet the revelation that the bank would maintain such holdings in VVM with the knowledge that Backpage has been engaging in under-age prostitution and coerced-sex workers does lift the veil slightly to the underworld of sex trafficking.