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Author: Jose Nino

Macron Doubles Down on Centralization

Written by Jose Nino on . Posted in Economic Liberty, Economics, Liberator Online. No Comments on Macron Doubles Down on Centralization

On March 5, 2019, French President Emmanuel Macron called on European Union members to choose a stronger EU and reject populists. This came in light of projections of eurosceptic and populist parties expected to come out strong during the upcoming European Parliament elections. Macron went as far to publish a column for about rejecting populist parties. Macron wrote, “Never has Europe been in so much danger.” The French President declared Brexit a “symbol of crisis” and pinned the blame on “fake news” for its occurrence. Macron then listed a number of “solutions” to this supposed EU crisis and how the regional bloc can become stronger than ever:
To address migration, Macron called for stricter border controls, a common border force, and common asylum rules – measures that have already started being implemented. Macron also called for Europe to lead the fight against climate change by setting a target of zero carbon dioxide emissions by 2050 and cutting pesticide use in half by 2025.
It’s clear that EU leaders like Macron are devout acolytes at the church of centralized power. Such a fanatic devotion to concentrated power is slowly undermining Europe, a region that became successful thanks to decentralization and jurisdictional competition. With populist movements surging in Spain and the recent Estonian elections, it’s clear the EU is on the ropes. Indeed there is a wide range of concerns such as the arrival anti-free speech laws, immigrant ghettos created by expansive welfare states, and a Brussels government that has become detached from its member nation’s interests. However, it should be noted that these movements are no ideological panaceas. Ideologically, most of the movements in Europe don’t offer genuine liberalism or free-market views. Many still believe in a considerable state presence in the economy. However, the focus shouldn’t be on making these areas ideologically pure but rather more decentralized. In Liberalism, economist Ludwig von Mises stressed self-determination as a means of promoting peace and prosperity:
“The right of self-determination in regard to the question of membership in a state thus means: whenever the inhabitants of a particular territory, whether it be a single village, a whole district, or a series of adjacent districts, make it known, by a freely conducted plebiscite, that they no longer wish to remain united to the state to which they belong at the time, but wish either to form an independent state or to attach themselves to some other state, their wishes are to be respected and complied with. This is the only feasible and effective way of preventing revolutions and civil and international wars.”
Ultimately, the goal should be to create multiple Brexits and then transition into Swiss styles of governance that emphasize decentralization and subsidiarity. For practicality sake, countries in the EU should put decentralization as their top priority. In a 21st century that features game-changing technologies like Bitcoin and 3D printable guns, centralized structures are looking more like fossils as days go by.

Is New York City on the Verge of Bankruptcy?

Written by Jose Nino on . Posted in Business and Economy, Economic Liberty, Economics. No Comments on Is New York City on the Verge of Bankruptcy?

The New York Post reports that New York City is “careening closer to all-out financial bankruptcy.” Despite these ominous trends, New York City Mayor Bill de Blasio plans on spending billions more. In the middle of a slowing economy and increased migration out of state thanks to the state’s burdensome tax system, a recession could potentially hurl the city into a “fiscal disaster.” American Institute for Economic Research economist Peter C. Earle claimed that “New York City could go bankrupt, absolutely.” The economist added, “In that case, the city would get temporary protection from its creditors, but it would be very difficult for the city to take on new debt.” New York City is clearly afflicted by the disease of fiscal irresponsibility. Long term debt is estimated to be about $81,100 per household. Mayor Bill de Blasio plans on spending an additional $3 billion pushing the city’s budget to $89.2 billion. Although Mayor de Blasio claims to have $750 million in savings for the preliminary fiscal 2020 budget, that amount may not be enough of a cushion during a potential recession.  New York Governor Andrew Cuomo’s preliminary budget has $600 million in cuts for the city in 2020. New York city’s fiscal house continue to lie on a shaky foundation, with spending increasing by 32 percent since Mayor de Blasio came into office. On the taxation front, NYC’s top 1% of earners shoulder 50% of the tax burden. The Big Apple is in a tough fiscal situation no matter how we slice it. Economist Milton Ezrati commented on NYC’s troubling fiscal situation: “The city is running a deficit and could be in a real difficult spot if we had a recession, or a further flight of individuals because of tax reform.” We don’t know when a recession could potentially hit America, but in the case that it occurs, the chances of NYC going into bankruptcy are quite high. Such a situation might propel NYC to turn to the federal government for a bailout like New York City Mayor Abraham Beame did in the 1970s. NYC and the state of New York, for that matter, can avoid this kind of fiscal upheaval. However, it will take bold political leadership to carry out meaningful reforms. The same inefficient tax code and regulatory system and profligate spending that we see at the federal level have largely been replicated in New York. For New York to remain competitive and prevent its premier city from going bankrupt, it must consider a multi-pronged approach of slashing taxes, spending, and regulatory red-tape. For once, the Empire State should embrace reducing the size of government. It could be the difference between a nasty bankruptcy and economic stability.

America Has More Millionaires Than Ever

Written by Jose Nino on . Posted in Business and Economy, Economic Liberty, Economics. No Comments on America Has More Millionaires Than Ever

Despite excessive government involvement in the American economy, entrepreneurs still find ways to improve everyone’s living standards. And consumers have rewarded them handsomely according to recent reports. Bloomberg detailed how the number of wealthy individuals in America hit a new high in 2018. A survey from the Specrtrem Group found that roughly 10.2 million households had a net worth within the range of $1 million and $5 million. This number of households is about the same population size as Portugal or Sweden. These latest figures are a 2.5 percent increase from 2017. Spectrem Group President George Walper, however, did point out that the rate of growth for the number of wealthy households in America has been slowing down because of  “weakening global economic growth and a contentious U.S. political environment.” Additionally, “ultra-high net worth” households — households possessing assets between $5 million and $25 million — grew to 1.4 million, representing a 3.7 percent increase. Households with assets higher than $25 million grew by 0.6 percent to 173,000. Despite signs of slowing growth, the number of America’s wealthiest has doubled since the Great Recession started. Even with a highly regulated economy, America still demonstrates how even shackled capitalism can still yield tremendous results. American entrepreneurship still finds ways to innovate in spite of the obstacles, like its burdensome tax code and out of control regulatory state, in front of it. A society that maintains a strong degree of respect for private property like the U.S. can still thrive economically, as it has demonstrated over the past century. Nevertheless, this system can still be perfected by scaling back the size of government on all fronts. Sadly, many people don’t realize how much red tape the American economy must put up with. Some estimates show that regulatory compliance costs the economy $1.9 trillion annually. So before political figures like Alexandria-Ocasio Cortez declare capitalism to be “irredeemable”, let’s start actually making it easier for people to make a living for once. If we want to crush poverty and create a wealthier society, we should break free from the regulatory shackles that hold millions of businesses and individuals down. There is no bigger obstacle to creating wealth than government intervention.

The Trump Administration is Falling for Neocon Snake Oil In Syria

Written by Jose Nino on . Posted in Middle East, Military, National Defense, Uncategorized. No Comments on The Trump Administration is Falling for Neocon Snake Oil In Syria

Just when the U.S. was considering a radical departure from foreign policy adventurism, the U.S. military is rolling out plans to keep approximately 1,000 troops in Syria. This comes several months after President Donald Trump said he was withdrawing all U.S. troops from the country. The Wall Street Journal reported that the Trump administration plans to maintain its support of Kurdish separatists in Syria. Although the exact number of troops has not been determined, 1,000 forces could be staying in the country according to certain reports. Hundreds of troops will be withdrawn after the U.S. defeats the Islamic State in Iraq and Syria (ISIS). However, there are now conflicting reports of what Trump’s actions will actually entail. Joint Chiefs of Staff Chairman General Joseph Dunford declared that this report was inaccurate. In a statement on Twitter, Dunford said, “A claim reported this evening by a major U.S. newspaper that the U.S. military is developing plans to keep nearly 1,000 U.S. troops in Syria is factually incorrect.” Dunford added, “There has been no change to the plan announced in February and we continue to implement the President’s direction to draw down U.S. forces to a residual presence.” Trump has reiterated that ISIS has been defeated since he declared his withdrawal from Syria in December. In a speech before troops, Trump said “Now it’s 100 percent, we just took over 100 percent caliphate. That means the area of the land. We just have 100 percent.” On the other hand, DC elites insist that the U.S. has not completely defeated ISIS. According to Joseph Votel, the leading military commander in charge of fighting ISIS, stated that ISIS “still has leaders, still has fighters, it still has facilitators, it still has resources.” However, the Trump administration announced in February it was planning to leave 200 U.S. troops in Syria. And now, the number is up to 1,000 troops. The Trump administration cannot seem to make up its mind. For peace advocates, this latest set of events should be frustrating. Campaigning on an “America First” platform – which questioned previous presidents’ foreign policy escapades –  Trump has appeared to capitulate to the military-industrial complex branch of the D.C. Swamp. Indeed, the Executive Branch has grown too powerful over the last century in domestic and foreign policy affairs. However, in the case of troop withdrawals, President Trump is well within his Constitutional powers to carry out the restrained foreign policy he campaigned on. The Middle East is a mess and will continue to be for decades on end. No amount of intervention will change that. At the end of the day, withdrawal means withdrawal. The U.S. needs bold leadership to stand up to the neoconservative consensus that has dominated foreign affairs for decades. The costs of America’s continued involvement in more foreign entanglements and regime destabilization projects are simply too high. America needs to go back to its non-interventionist roots.

Tony Blair Plots to Destroy Brexit Behind the Scenes

Written by Jose Nino on . Posted in Business and Economy, Economics, Elections and Politics. No Comments on Tony Blair Plots to Destroy Brexit Behind the Scenes

Former United Kingdom Prime Minister Tony Blair has been accused of “unacceptable” behavior for his role in briefing French President Emmanuel Macron. The former Labour prime minister believes that if the European Union stands firmly against the Brexit deal, the British Parliament will capitulate and accept a customs union. In effect, Britain would remain under Brussels’ thumb or would have to hold a second referendum to nullify Brexit. This move has generated a considerable amount of criticism from Eurosceptic members of the British Parliament. Eurosceptic Conservative Member of Parliament Peter Bone proclaimed that it is, “totally unacceptable for a former prime minister to go around the heads of European countries and undermine the Government’s position. I’m not sure we could find another time in modern history when this has happened.” Blair is a strong proponent of a second referendum and has told European leaders that it is now “probable” that a second referendum will occur. The former Prime Minister’s actions to derail Brexit are to be expected given his track record of governance. After all, this is a prime minister who duped the UK into entering the disastrous Iraq War alongside the United States. Given his membership in the Labour Party – any meaningful reform of Britain’s bloated welfare state did not occur under his leadership – despite his “Third Way” branding. When it comes to developments like Brexit, which firmly reject political universalism, former political figures like Tony Blair will naturally be the first to oppose them. At this point, the UK should leave the EU at all costs. The EU has become overwhelmingly centralized, has questionable migration policies that have generated troubling social outcomes in countries like the UK and France, and threatened basic civil liberties such as free speech. Moreover, the UK has become less reliant on the EU for trade. In 2017, roughly 44 percent of British exports landed in EU member countries. Due to its unique geographic position in Europe, the UK can pursue other trade avenues outside of the EU’s jurisdiction. Socialists like Tony Blair love centralized institutions like the EU, but for the average British person living outside London and Brussel’s cosmopolitan grasp, the EU is completely out of touch with their wants and desires. Frankly, the EU is a social and political experiment no longer worth partaking in. Exiting the EU is no get rich scheme, but it does afford the UK a golden opportunity to exercise its national sovereignty and chart its own path. After all, Britain is the cradle of classical liberalism. Genuine free trade and a restoration of civil liberties like free speech could be back on the table if the British political class gets its act together. Tony Blair can complain all he wants about Brexit, but it’s ultimately British voters who should have the final say on these matters. In sum, the UK should respect the democratic will of its voters and abandon the false idol that is the EU.  

Oklahoma Embraces Constitutional Carry

Written by Jose Nino on . Posted in Gun Rights, News, Personal Liberty. No Comments on Oklahoma Embraces Constitutional Carry

On Feb. 28, Oklahoma became the 15th Constitutional Carry state. After Governor Kevin Stitt signed HB 2597, Oklahoma joined Alaska, Arizona, Arkansas, Idaho, Kansas, Maine, Mississippi, Missouri, New Hampshire, North Dakota, South Dakota, West Virginia, Wyoming, and Vermont as the states that  recognize the Second Amendment as the only permit an individual needs to carry a firearm. This bill’s passage did come with obstacles though. It ultimately took two attempts to get Constitutional Carry passed in the Sooner State. Stitt’s predecessor Mary Fallin vetoed Constitutional Carry much to the disappointment of Oklahoma gun owners. However, all hope wasn’t lost when Constitutional Carry died in 2018. Governor Stitt took it upon himself to make it an integral part of his election campaign. And in 2019, he kept his word by signing Constitutional Carry into law. Stitt was not alone in his support for Constitutional Carry, however. Oklahoma State Senator Nathan Dahm has been a reliable advocate for Constitutional Carry in the Oklahoma State Legislature during the past few years. Dahm revealed his constitutionalist views in an interview with the Tulsa World: “The core function of government should be protecting fundamental rights.” The Senator continued: “It is encouraging to see the Legislature pass bills that restore our rights.”Despite gun control gaining steam in state legislatures across the nation, there are still plenty of opportunities for Second Amendment advocates making a difference. Constitutional Carry happens to be one of them. The beauty of the U.S. federalist system is in its competition between states. This is where policy innovation thrives. The 20th century witnessed the rise of a gargantuan federal government that has become more controlling and distant to the desires of everyday Americans. As a result, the government seems to grow non-stop no matter how much supporters of limited government try to limit it. Sometimes, it almost feels like a lost cause trying to get involved at the federal level. However, America’s competitive federalist system serves as a viable fallback for liberty activists. It cannot be overstated how our important it is to get involved in our states legislatures and municipalities. That’s where freedom lovers can get good policies implemented and build political “farm teams” of sorts when the federal government drags its feet. All politics begins in someone’s backyard. It would behoove us to not ignore local and state level politics.

New Mexico Sheriffs Stand Up for Gun Rights

Written by Jose Nino on . Posted in Gun Rights, Personal Liberty, Second Amendment. No Comments on New Mexico Sheriffs Stand Up for Gun Rights

New Mexico Governor Michelle Lujan Grisham is angry at 29 sheriffs for standing up for their constituents’ gun rights. These 29 county sheriffs signed resolutions opposing gun control coming from the Santa Fe. Certain bills such as “red flag” gun confiscation orders and universal background checks have caused these sheriffs to rise in opposition. By signing these “sanctuary” resolutions, sheriffs are not compelled to enforce unconstitutional gun control laws. These resolutions are molded after “Second Amendment Preservation Ordinances’ that have been implemented in certain parts of Oregon as a response to gun control. Grisham took advantage of a tweet storm to ridicule this growing gun rights movement in New Mexico: “A few law enforcement officers in this state have been making noise about how they won’t enforce gun safety measures because they don’t like them. That’s not how laws work, of course, and it’s not how oaths of office work either.” Channeling the NRA boogieman, Grisham scoffed at these resolutions and saw them as “NRA propaganda, rogue sheriffs throwing a childish pity party or bad-faith critics” and vowed to continue pushing for gun control. On the other hand, Mike Herrington, Chaves County Sheriff, held his ground in the face of this gun control onslaught: “I take an oath to uphold the constitution, and I enforce all lawful laws that do not infringe on my constitutional rights.” So-called “universal background checks” are egregious gun rights violations. Given the nature of government growth, the establishment of enhanced background checks makes de facto gun registration a reality in certain anti-gun states. Not only that, these laws are not effective in reducing crime. They also make it more expensive for groups like minorities and the poor to acquire firearms. The local “nullification” approach New Mexico is taking represents a viable strategy for gun owners who live in monolithically anti-gun states. In these states, political power is mostly concentrated in major urban centers while rural areas become a political afterthought. Nullification resolutions give rural areas a voice in political matters and allow them to express political dissent against the urban status quo. All in all, rural areas across the nation should follow New Mexico’s example and adopt similar resolutions against their politically aloof state legislatures. When dealing with non-stop government growth, silence is consent.

Peter Schiff Believes The U.S. Is Borrowing Itself Into Poverty

Written by Jose Nino on . Posted in Business and Economy, Economics. 1 Comment on Peter Schiff Believes The U.S. Is Borrowing Itself Into Poverty

Ever the doomsayer, Peter Schiff predicts a dire future lies ahead for the American economy. Despite the hype from President Trump of being the charge of the best economy in U.S. history and a recent stock market rally, Schiff affirms that an economic recession is just on the horizon. Indeed, there is plenty of data that show promising economic figures since Trump took office. Trump passed several pro-growth reforms like his tax cuts and his executive order to reverse Obama era regulations. However, in a recent podcast episode, the financial commentator sustains that the growth under the Trump administration is unsustainable due to it being built on debt. Schiff provided some sobering analysis of the current economic situation when compared to the previous decade. Going back to 2005, the national debt rose by $554 billion in that year alone. In Schiff’s view, that borrowing “bought” 3.5 percent economic growth. Fast forward to 2018, the national debt increased by a whopping $1.27 trillion. To put this in perspective, that’s more than twice the debt increase of 2005. As Schiff notes, this debt-financed growth is unsustainable because it came at a heavy cost. The U.S. has had “to increase the amount of debt that we had by a lot more than the percentage that the economy grew.” It’s not just the government that’s up to its neck in debt. Governments are often a reflection of the general culture they preside over. American household debt is at record numbers. Peter Schiff correctly noted that “We’re not richer because of this economic growth.” Debt-fueled growth is an illusion, at best, as Peter Schiff notes: “If your debt is growing faster than your economy, then you’re not getting richer. You’re getting poorer. You would have been better off without the debt and without the growth … We’re borrowing ourselves into poverty. We’re not borrowing ourselves rich. We’re borrowing ourselves broke.” Savings are the key ingredient for a capitalist economy to function. Whenever an economy is based on money printing and borrowing, there is very little incentive to save. Ludwig von Mises had it right in The Anti-Capitalist Mentality: “The only source of the generation of additional capital goods is saving. If all the goods produced are consumed, no new capital comes into being.” Whether Schiff’s predictions manifest themselves in the near future is up for debate. However, Schiff is correct from a big picture perspective. The American economic system is built on a house of cards. From its burdensome tax code to its central banking policies, the U.S. economy has been trending towards massive government control over the past century. With a bloated entitlement state on top of its well-funded military-industrial complex, the U.S. will have to come to terms with an impending fiscal collapse in the next decade or so. The American populace will, unfortunately, end up impoverished as a result.

AOC Gets Capitalism Wrong…Again

Written by Jose Nino on . Posted in Economics, Issues, Philosophy. 1 Comment on AOC Gets Capitalism Wrong…Again

Capitalism can’t seem to catch a break. Upstart socialist Alexandria Ocasio-Cortez took advantage of her appearance at this year’s South by Southwest festival to trash capitalism. This was a rather ironic incident given that SXSW has been host to some of the hottest tech start-ups—ventures that epitomize capitalist innovation. These facts notwithstanding, Ocasio-Cortez proceeded to go on an anti-capitalist rant during an interview with The Intercept’s political editor Briahna Gray. Ocasio-Cortez declared that capitalism is “irredeemable” and that the U.S. is reaping the consequences of putting “profits over everything else in our society.” The congresswoman segued her capitalism critique into a critique of the original New Deal. Ocasio-Cortez contended that Franklin Delano Roosevelt’s New Deal cast minorities to the side: “The New Deal was an extremely economically racist policy that drew little red lines around black and brown communities and it invested in white America.” Ocasio-Cortez then expanded upon the inequalities the New Deal created: “It allowed white Americans access to home loans that black Americans didn’t have access to, giving them access to the greatest source of intergenerational wealth.” Indeed, these observations are correct. The New Deal was laden with interventionist policies, above all in housing that disproportionately benefited whites. However, the “solutions” that Ocasio-Cortez promotes only create more unintended consequences and stifles capital accumulation, which minority communities desperately need. The Great Society programs of the Civil Rights era were the textbook example of government trying to correct past injustices, ironically created by the government. The result has been intergenerational government dependency and a total breakdown of the African American family unit. More government intervention is not going to “do the trick.” Ocasio-Cortez can casually talk about socialism from the comforts of the First World, as countries like Venezuela are imploding due to their decades of adhering to these policies, but regularly dismissing capitalism does the minority constituents she supposedly “represents” a disservice. Capitalism is the most ethical and effective way for people of all ethnicities and social backgrounds to thrive. Having such a virulent anti-capitalist as Ocasio-Cortez speak at SXSW – an event where some of the sharpest entrepreneurial minds gather – is farcical. Politicians like Ocasio-Cortez are replaceable in the long-term, but their ideas live on. The fact that the ideas of socialism are in vogue should worry all advocates of free markets.

North Dakota Stands Against Gun Confiscation

Written by Jose Nino on . Posted in Gun Rights, Personal Liberty. 1 Comment on North Dakota Stands Against Gun Confiscation

On February 19, 2019, the North Dakota House firmly stood against gun confiscation. The North Dakota House took down a so-called “red flag” bill by an iconic 17-76 vote, making it the first red flag bill to be defeated via roll call vote in the nation. Red flag laws are the latest gun control craze sweeping the nation. The laws are euphemistically labeled red flag laws or Extreme Risk Protection Orders (ERPOs), which allow law enforcement to confiscate an individual’s firearms who is allegedly deemed a threat to themselves or others. A simple accusation from an acquaintance, friend, or family will suffice in obtaining a confiscation order. Indeed, these laws operate with complete disregard to due process. Without so much as a hearing before a judge, the accused can have their weapons confiscated. It could be months before a gun owner could actually restore his or her gun rights in court. Despite the civil liberties concerns, 13 states have enacted their own red flag laws. Florida, a traditionally pro-gun state, was one of the most notable states to adopt red flag gun confiscation orders following the Parkland shooting. Since then, red flag laws have popped up across the country, with the U.S. Senate strongly considering a bipartisan version of a red flag law. Red flag laws have already garnered controversy in places like Maryland, where a 61-year-old man was killed when two police officers showed up at his door to serve him a court order. Such lurid stories demonstrate the potential harm red flag laws could bring. Thankfully, cooler heads prevailed in North Dakota. Led by pro-gun representative Rick Becker, who sponsored the passage of North Dakota’s Constitutional Carry bill HB 1169 in 2017, the North Dakota House was able to stop North Dakota’s red flag bill in its tracks. Becker was correct in noting that North Dakota’s red flag bill violated constitutional firearm and due process rights. He asserted that the efforts to obtain a court order could be based on trivial hints of future violence, essentially creating Minority Report scenarios of pre-crime prevention. A gross violation of due process if there could ever be one. Becker had choice words for HB 1537: “Make no mistake, the bill before us is without exaggeration a gun-grabbing bill….. It supposes that the ends justify the means.” Thankfully, Becker and his colleagues were able to kill this bill before it could gain any more traction. As governments to continue to grow across the nation, we can expect more iterations of red flag laws to pop up. North Dakota should serve as an example to the rest of the nation that gun control can and should be defeated when introduced. The biggest threats to our civil liberties often come from our own backyards.

The Afghan War is Finally Coming to An End

Written by Jose Nino on . Posted in Foreign Policy, Middle East, Military, National Defense. No Comments on The Afghan War is Finally Coming to An End

After reaching a tentative agreement with the Taliban earlier this year, the New York Times published a report of the next steps being taken to scale down the war effort. The EU and the United States have come together in favor of a withdrawal plan that would finally put an end to the conflict in Afghanistan. This plan would halve the number of American troops in the country in the upcoming months — reducing the number of troops from 14,000 to 7,000. Accompanying this withdrawal plan is a shift in strategy from focusing on “counterinsurgency” to “counterterrorism” operations. This freshly-minted plan entails a power-sharing agreement between the official government in Kabul and the Taliban that would gradually phase out current military operations. The plan sets a timetable of five years for all American and European troops to leave the country. The U.S. and the EU would still provide the ragtag Afghan military financial support. American troops will continue mounting campaigns against Al Qaeda and ISIS units that remain active in Afghanistan until the withdrawal has officially been completed. In the next five years, European forces will continue training the Afghan military, while the U.S. would focus more on providing logistical support. Although an immediate withdrawal would be more optimal for American interests, this protracted withdrawal is still a step in the right direction. President Donald Trump was elected on an “America First” platform that emphasized getting out of foreign entanglements like Afghanistan and Syria. Obviously, there is considerable institutional inertia due to the military-industrial complex’s political clout. This was on display when Senate neoconservatives voted in favor to block President Trump’s original withdrawal plans in Afghanistan and Syria. However, as President and Commander-in-Chief of the armed forces, Trump still has the deciding power on military matters. Trump should trust his electoral instincts and follow through with this withdrawal. The Afghan conflict has cost the U.S. $1.07 trillion and the lives of 2,350 American troops. Trump must put an end to this perpetual conflict and focus more on domestic problems. The U.S. simply cannot afford to engage in more nation-building experiments.

American Farmers Desperately Need Free Markets

Written by Jose Nino on . Posted in Business and Economy, Economic Liberty, Economics. No Comments on American Farmers Desperately Need Free Markets

American farmers are up to their necks in debt. Agriculture Secretary Sonny Perdue revealed that debt among American farmers has increased to $409 billion. According to a Reuters report, these numbers are up from $385 billion last year. These levels of farm debt have not been seen since the 1980s. In a testimony to the House Agriculture Committee, Perdue gave a more detailed overview of the situation: “Farm debt has been rising more rapidly over the last five years, increasing by 30% since 2013 – up from $315 billion to $409 billion, according to USDA data, and up from $385 billion in just the last year – to levels seen in the 1980s.” The macrotrends have not looked good for the agricultural sector during the past five years. Deflationary trends in commodity prices, storms causing damage crops, and the present trade war with China have pummeled the U.S. agricultural sector. Luis Ribera, an agricultural economist at Texas A&M University breaks down the current problems U.S. agriculture is facing: “As producers are not able to cover year to year expenses with operating loans, they are forced into transforming operating loans into term debt which erodes their creditworthiness.” Ribera continued: “On top of all that then we have the trade war which reduces the demand of US commodities given that tariffs make them more expensive and then depress the prices even more.” Traditionally, China has bought significant amounts of corn, soybeans, and other agricultural products for the past few decades. However, Trump’s protectionist policies have spurred Beijing to respond with their own tariffs on American products. As a result, trade between the two countries has declined. Robert Johansson, the chief economist of the U.S. Department of Agriculture, contends that farm exports are projected to fall by about $1.9 billion due to the trade dispute. When it comes to tariffs, somethings never change. Punitive tariffs are not conducive to a peaceful foreign policy. The trade wars preceding World War II should make the U.S. weary about continuing a trade war with China. When the Smoot-Hawley tariff was enacted in 1930 in response to the Stock Market crash of 1929, it raised tariffs on over 20,000 goods and created a domino effect of protectionism across the globe. As a result, world trade declined by about 66 percent between 1929 and 1934. In this trade war context, many governments became more militaristic and belligerent, as social cooperation between nations deteriorates. No matter how protectionists spin it, tariffs are always passed on to consumers and create enmity between nations as we see with current the tensions between China and the U.S. Additionally, the relationship the U.S. government has had with the agriculture industry has not been so great either. In fact, it’s one filled with cronyism. Certain sectors are subsidized to the tune of billions. From 1995 to 2017, the wheat industry has received $45.9 billion in subsidies, while the corn industry collected a cool $111.2 billion in subsidies during this same period. All these subsidies considered, it’s become clear that U.S. agriculture is starting to receive rewards based on political favoritism rather than entrepreneurial prowess. Subsidization enables rent-seeking and bad practices which may encourage excessive debt accumulation. When industries are already subsidized by the billions, they can expect a bailout once their businesses sink. Like clockwork, the Trump administration responded to its misguided trade war by giving American farmers $12 billion in bailout funds. Even with Trump’s farm bailout, farmers are still heavily indebted and on the verge of bankruptcy. The number of farmers going bankrupt has skyrocketed to the highest levels in a decade. As farmers become more indebted, these numbers will only rise into the 2020s. This farm dilemma is a textbook example a never-ending cycle of statism we currently live in. First, the government tries to coddle the farm industry with subsidies and then tries to protect it even further with tariffs, paying no regard to the unintended consequences. Once the unintended consequences set in, there will be even more calls for government intervention. Simply put, there are no magical government hacks to solve this problem. As Winston Churchill famously said, “We contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.” This same logic should also apply to tariffs and subsidies. To get America’s farm industry back on its feet it will need to truly embrace free markets on all fronts. That means ending the trade war with China and also putting a stop to subsidies that encourage bad behavior and other forms of economic malinvestment. The U.S. farm sector is desperately in need of a free market detox.