the Government's Agenda
by Gary North: Gandhi,
Mubarak, and Tough Talkers Who Eventually Slither Away
In this report,
I am making a point: the country is headed for a fiscal disaster,
and there is no broad-based political movement inside the country
to put on the brakes. The train is headed for the collapsed trestle,
and it is speeding up. The President as the engineer is talking
about slowing the train a little, but he has not yet put on the
No one will
put on the brakes.
This has enormous
consequences for your financial future. You cannot easily get off
the train. It is speeding up. The faster it goes, the more expensive
it is to get off.
are not aware that there is anything really wrong. They are once
again running up credit card debt. They figure that happy days will
soon be here again. Yet the deficit is $1.5 trillion. "No big problem!"
Congress says. "Nothing that a $100 billion spending cut cannot
Let's see if
they impose that budget cut.
of the self-conscious surrender to the deficit was an article published
by Bloomberg on February 14. "Budget Saves $1.1 Trillion, Cuts Deficit,
Who is Lew?
Why should we care?
Obama administration's 2012 budget would save $1.1 trillion over
the next 10 years by cutting programs to rein in a deficit that
may reach a record $1.5 trillion this year, White House Budget Director
Jacob Lew said.
to start living within our means," Lew said yesterday on CNN's
"State of the Union" program. "The notion that we can do this
painlessly it's not possible to do it painlessly. We're
going to make tough choices."
See the game?
It has been financial journalism's game for at least a decade. The
game is to run headlines based on a 10-year savings plan. This is
done deliberately to confuse the public, on the assumption that
readers even sophisticated readers will not read the
article or think through the numbers. It is done to calm people.
It is a now-universal practice.
can serve for only eight years. So, he has no authority to achieve
A $1.1 trillion
savings over 10 years is $110 billion a year. The deficit is $1.5
trillion. This, Mr. Lew assures us, is a "hard choice."
No, this is
an admission that there will be no hard choices until a crisis hits.
This is one more guarantee that the President and Congress will
kick the fiscal can down the road for another 10 years.
We are talking
about an increase in the on-budget Federal debt of at least $10
trillion over the next 10 years.
How will the
savings be made?
two-thirds of the savings would come from a five-year spending freeze
and cuts in domestic programs. One-third would come from revenue
increases, including limiting itemized tax deductions for the wealthy,
an administration official said.
would be diverted to increased spending in education, research
and development and technology to compete against global rivals,
create jobs and reduce the 9 percent unemployment rate, Lew said.
Savings are defined as "increased spending in education, research
and development and technology." I see. Savings are spending.
This is newspeak,
just as George Orwell described it in his novel, Nineteen
Eighty Four. Examples: "Love is hate." "Peace is war." "Saving
is buying it personally. "Let's run up our credit card debt. No
problem. Spending is thrift."
For the first
time since August 2008, Americans
in December increased credit card debt to $800 billion, up by
$2.5 billion in November. Credit card debt is down by 18% since
August 2008. It was not just credit card debt. Consumer debt was
up, too: autos, student loans, etc. It rose to $1.6 trillion, up
$3.8 billion above November. These are not major increases
nothing on a par with Federal debt increases. But the public is
buying the government's line: "No big problem.
article quoted an unknown minor official under Bush. He says this
switch by Obama represents a move to the center, in preparation
for 2012. It probably does. The center is commitment to a $1.4 trillion
deficit rather than $1.5 trillion.
This is the
center of a train rushing for the collapsed trestle.
says this will not satisfy Republicans. House Speaker John Boehner
said on NBC's "Meet the Press" that "we're broke." A spending freeze
is "way too much."
is. What is needed is a $1.5 trillion cut in spending. But Mr. Boehner
failed to call for that. Nor did any of the 150 economists he cited.
(By the way, there are thousands of economists in the country. Where
is a single non-Austrian school economist calling for a balanced
budget in fiscal 2012?)
disclosed plans on Feb. 11 to kill more than 100 U.S. government
programs in an effort to cut spending by $61 billion in the budget
for the fiscal year that ends Sept. 30. Lew, on CNN, declined to
say whether the White House would support that package.
Wow! A whole
$61 billion in cuts! But Mr. Lew failed to join in.
was asked about prospects of shutting down the government if Republicans
can't reach a compromise with Senate Democrats and Obama on this
year's budget, for which spending authority expires on March 4.
is to reduce spending, it is not to shut down the government,"
went on and on about billion-dollar cuts. It did not raise the question
of the effects of a trillion dollar plus annual deficits. Those
deficits are on the table. No one is challenging them, with one
exception: Ron Paul.
PAUL VS. THE ESTABLISHMENT
I would like
to see Ron Paul elected President, but not because I see him as
a political messiah. I would like to see him elected because, in
order to get elected, he would have to represent a majority of Americans.
He does not represent a majority of Americans. He will not be elected.
The voters want more of the same. They will get it.
Political Action Conference, also known as CPAC, is an annual convention.
Conservative politicians who are thinking of running for the Republican
party's presidential candidate show up to rally the conservative
troops. Some of them don't show up, knowing they have no chance
at winning the straw poll. Sara Palin is one of these annual no-shows.
They can then blame their poor showing on the fact that they did
not show up.
In 2010, Congressman
Ron Paul won the straw poll. In 2011, he did it again. He
did it with this speech a frontal assault against the
agenda of the conservative mainstream.
media recognizes Paul for what he is: the nation's major voice for
libertarianism. This understanding is shared by the conservative
mainstream media. Fox News recognizes this, and therefore steadfastly
opposes Paul. It was Fox News in 2008 that kept Ron Paul off the
podium during its broadcasting of the Republican Party's debates.
He was not invited.
conservative media want someone who is in favor of the expansion
of American Empire. They want someone who will not rock the boat,
which would mean sinking the Establishment's ship of state. They
are big government conservatives.
The fact that
Ron Paul, for the second year in a row, is the favored candidate
of the people at CPAC is an insult to the conservative Establishment.
It indicates that large numbers of conservatives are not willing
to go along with the basic agenda of the conservative movement,
namely, the expansion of Federal power in the realm of foreign policy,
and an unwillingness to roll back the New Deal, Fair Deal, New Frontier,
Great Society, and all the rest of the bipartisan expansion of the
Federal welfare state.
Ron Paul represents
an ideological threat to the entire conservative movement. Because
of this, it opposes him and does whatever it can to make certain
that whatever publicity he receives, and whatever public support
he receives, will not be given favorable treatment. The fact is
this: there is a large group of people in the conservative movement
who are in favor of Ron Paul's agenda. This is regarded, correctly,
as a vote of no-confidence against the conservative Establishment.
It goes without
saying that the Republican Establishment, which is to the left of
the conservative Establishment, is even less happy with any publicity
Ron Paul gets. These people do not want to think about the fact
that there are millions of voters out there who are sick and tired
of the expansion of the Federal government. These Paulites not only
want to stop the expansion of the Federal government, they want
to roll back the Federal government.
This is an
intolerable thought to the Republican Party Establishment. The Republican
Party Establishment is completely in favor of the expansion of the
American Empire and the expansion of Federal welfare spending. The
Republican Establishment understands that money buys votes, and
they want to buy votes.
So, when any
reporter approaches a major Republican figure in Congress, and asks
what major spending programs must be cut back, or even limited,
the Congressman begins to waffle. He refuses to be specific about
what, exactly, ought to be cut from the Federal budget. He refuses
to give any examples of how the Federal budget deficit can be rolled
back from a $1.5 trillion deficit to, say, a $200 billion surplus.
We need a surplus in order to repurchase all American debt. There
is simply no thought given to the idea that the Federal debt ought
to be zero. That has not happened since 1836, and it is not going
to happen again.
So, when Ron
Paul receives 30% of the straw poll, Mitt Romney receives 23%, and
all the rest of the would-be Republican party hopefuls receive single
digits, this indicates that the conservatives who attend CPAC are
sick and tired of the waffling. They are unwilling to go along to
get along. When the rest of the conservatives receive single-digits,
including 3% for Sarah Palin and 2% for Huckabee, this indicates
that the conservative Establishment is out of touch with the conservative
party activists at CPAC. This is an affront to big-government conservatives.
agenda is the most important single power exercised by any establishment.
We are told the President of the United States is the most powerful
person on earth. But someone sets the agenda every day for the President.
Somebody is in charge of the daily schedule of meetings. That person,
not the President of the United States, will determine what issues
While it is
possible for the President to set his own daily schedule, this is
never done. Always it is some lower-level figure who schedules who
will meet with the President, meaning which topics will be discussed
by the President. The person who controls the daily agenda really
does set the agenda for probably 80% of what the President decides
to think about.
I have never
seen a discussion and political science textbook of the procedure
by which the daily schedule is set. A man I knew in high school,
Dwight Chapin, used to set the schedule for Richard Nixon. He later
got caught in the Watergate scandal and went to jail. I wish he
would sit down and write a memoir, not on his activities regarding
Watergate, but with respect to how, exactly, he set that daily schedule
of meetings. I am sure he had to satisfy all kinds of political
pressure groups represented within the cabinet. No one ever writes
Yet this power
of setting the agenda is rarely discussed in specialized studies
of the Presidency. The simplest kind of question, namely, who gets
in to see the President, is never mentioned. Here is one of the
most important single powers anywhere on the face of the earth,
and nobody knows exactly how it is done who was not part of the
actual procedure. We do not hear discussions on this, and therefore
we do not have any real conception of how policy is made in the
executive branch of government.
why Ron Paul is such a threat to the conservative Establishment
is the fact that he has such a clear-cut agenda. This is obvious
to the people who want access to controlling his daily schedule.
That person would not be anybody connected with the Republican Party
Establishment or anybody connected with the conservative movement's
Establishment. He would have a completely different set of people
in charge of his office. It is imperative, therefore, Ron Paul's
candidacy be undermined as much as possible well in advance.
This is why,
in the reports on the results of the straw poll, the writers spent
almost no time on Ron Paul's agenda. There was no discussion of
why Ron Paul got votes, except to say that somehow he was able to
get more of his people to manipulate the straw poll. The question
then is this: Why did the also-rans not get their people in to manipulate
the straw poll? If Ron Paul was able to get out all those people,
it indicates that the others failed to get support. This, I guarantee
you, is never discussed by the journalistic hacks who spin the results
of the straw poll. They spend time on the other candidates, as if
the winner of the straw poll were somehow a secondary figure.
Establishment has always been able to keep libertarians at arm's
distance from the troops. The mainstream has praised Austrian School
economists as theoreticians, but never before has anyone in politics
come before the voters to call for the implementation of the Austrian
School economists' agenda. There has only been one other figure
in my lifetime who was anywhere near as libertarian Ron Paul. That
was Howard Buffett, who served in Congress in the late 1940s and
early 1950s. He had no national audience. Nobody outside his district
in Omaha, Nebraska had ever heard of him. He was not considered
"Presidential timber," or even Senatorial timber.
So, Ron Paul
was the first libertarian politician ever to penetrate the consciousness
of the conservative movement. The fact that he has so completely
penetrated the consciousness of the conservative movement has mainstream
conservatives terrified. It was never supposed to be that anybody
who favors the roll-back of the welfare state would ever be able
to get the ear of conservative voters. This is what Ron Paul has
been able to do.
If you look
at the other people who are powerful enough to get the Presidential
nomination, other than Mitt Romney, you find that they are pretty
much silent on the issue of foreign aid, American military bases
abroad, the expansion of the war in Afghanistan, and when exactly
the troops ought to be called home. In other words, they are basically
the question: When will anybody in Congress vote to cut American
military spending? This raises another question: When will the foreign
aid programs be completely eliminated?
Ron Paul is
also known for his position on ending the Federal Reserve System.
Nobody in the also-rans has a platform hostile to the Federal Reserve
System. It is considered intolerable for any major American political
figure to run for President on the platform of ending the Federal
Reserve System. This would be a direct assault on the American Establishment.
There is no more treasured institution anywhere in the Establishment
than the Federal Reserve System. Yet here is a candidate who is
basing his agenda on ending the FED.
In short, Ron
Paul's agenda is far too specific for the conservative mainstream
to tolerate. He wants to do what the conservative mainstream says
it wants to do: cut the Federal budget, stop the expansion of the
money supply, stop price inflation, and return to a free-market
economy. The conservative mainstream does not really want to do
any of these things, and never has. It has always been in favor
of expanding the military budget, expanding Federal power outside
the borders of the United States, running the world as the world's
policeman, and increasing the money supply on a reasonable basis
in order to keep American prosperity rolling. All of this is big
government conservatism. All of this has been basic to the conservative
movement since 1950.
Who will set
the agenda? Will it be people who want to roll back the Federal
government? Will it be people who want to constrict the Federal
budget? Will it be people who want to end the Federal Reserve System's
ability to bail out the Federal government every time it runs massive
deficits? Is it somebody who wants to balance the budget, and not
merely balance it, but run a budget surplus, so the government can
begin to buy back the Federal debt? No conservative candidate runs
on this platform other than Ron Paul.
This is why
we can be certain that nothing is going to change in American political
life. Ron Paul is not going to get the nomination. The American
Establishment will see to this. We will see more deficits, a larger
Federal budget, and more inflation. That is all the conservative
movement has ever offered to the voters, and it is not going to
order to set the agenda, the conservative movement in the mainstream
financial press must join together in order to confuse the voters.
They must persuade the voters that things are not too bad, that
there is hope for the future, the Federal deficit is really not
so bad after all, and the good news is on the way.
There is no
way off the train. The train is going to go over the trestle. The
Establishment is committed to kicking the fiscal can. There will
be no budget cuts. There will be no balanced budgets.
be a crisis when the budgets cannot be financed at anything under
20% per annum except by mass inflation by the FED.
the crisis. It's coming.
North [send him mail]
is the author of Mises
on Money. Visit http://www.garynorth.com.
He is also the author of a free 20-volume series, An
Economic Commentary on the Bible.
2011 Gary North
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