Campaign For Liberty
July 29, 2010

Here Dr. Paul talks on the House floor about the horribly unjust and inequitable drug war, and an effort to stem some of the greatest sentencing abuses. It’s a good start, but does not go far enough, Paul concludes.

Here’s some more info on the bill.

Campaign For Liberty
July 29, 2010

Yesterday, Ron Paul spoke on the House floor during debate on a privileged resolution to invoke the War Powers Act and remove our troops from Pakistan.

Dr. Paul highlights how many people thought this administration would shrink our foreign wars. Instead, drone attacks have doubled, civilian casualties are high, we sent $7.5 billion in “aid” to Pakistan and instead of spending it on infrastructure, much of the funds went to fund the ISI (Pakistani intelligence service) who it turns out have been funding the Taliban. Rather than declarations of war, Dr. Paul states “we slip into wars” by slowly increasing the amount of our involvement.

We pay for these wars with an enormous amount of blood and treasure and we can’t afford to increase either at this point.

Sheldon Richman
Campaign for Liberty
July 28, 2010

President Obama has signed the financial industry regulatory overhaul — officially, the Dodd-Frank Wall Street Reform and Consumer Protection Act. Predictably, what he said about it cannot possibly be true.

For example: “[T]hese reforms represent the strongest consumer financial protections in history. And these protections will be enforced by a new consumer watchdog with just one job: looking out for people — not big banks, not lenders, not investment houses — looking out for people as they interact with the financial system.”

And: “[B]ecause of this law, the American people will never again be asked to foot the bill for Wall Street’s mistakes. There will be no more tax-funded bailouts — period. If a large financial institution should ever fail, this reform gives us the ability to wind it down without endangering the broader economy. And there will be new rules to make clear that no firm is somehow protected because it is ‘too big to fail,’ so we don’t have another AIG.”

Note that Obama did not promise to spare the taxpayers from having to foot the bill for the government’s mistakes. He and the members in Congress know better than to make that howler of a promise. Nevertheless, the magnitude of the whoppers being told about this law is astounding.

The government cannot deliver on pledges to protect consumers in the financial markets and to shield taxpayers from bailouts. In the first instance — consumer protection — financial instruments are inherently complex and government attempts to shelter less-sophisticated investors and borrowers from all danger would either require control of products to the point of prohibiting things people want or inundating them with information until they ignore all of it because of the sheer volume. Alas, what the new law will provide consumers is a false sense security — and that’s worse than none at all.

As for the new watchdog agency, we have cause to wonder why the law of regulatory capture should suddenly stop operating or why the door between government and industry should suddenly stop revolving. (It’s still spinning in the energy industries.)

As for taxpayer bailouts, the new law leaves plenty of room for the FDIC to borrow money in order to keep favored creditors of failing big companies afloat. The wind-up fund that’s supposed to be financed by banks and other firms will of course be filled by their customers.

Most generally, the new law exhibits the standard governmental hubris. Who truly believes that an army of necessarily myopic bureaucrats can ever know enough to 1) anticipate a systemic crisis and 2) do something intelligent about it in a timely way? The more centralized the power the more vulnerable we average taxpayers are. Mistakes are system-wide. The virtue of a freed market is not that it’s unregulated (it’s not) but that its radically decentralized.

So anyone who thinks this 2,300-plus page monstrosity has a chance to prevent another large-scale financial failure has been watching too much network news. Two pieces of information are pretty much all you need to see through the hype. First, in all those pages you will not find the words “Fannie Mae” or “Freddie Mac” (or their official names), the two government-sponsored enterprises (that’s a term of art) that had so much to do with encouraging the hollow mortgages that underlay the flimsy securities and credit default swaps that made the financial system so fragile these last several years. (Search our archive for many articles about this.) When Fannie and Freddie couldn’t pay their bills a couple of years ago, the government took them over, proving that the widely assumed implicit government guarantee of their obligations was real after all. They are still in business buying up mortgages though they need regular infusions of the Treasury’s borrowed money. Before it’s over the bailout cost is expected to at least hit the $400 billion cap, though Obama has unilaterally promised unlimited financial aid.

The second important fact is that the chief movers of this law, Sen. Chris Dodd and Rep. Barney Frank, are the two biggest congressional champions of Fannie and Freddie. Whenever anyone expressed concern about the poor condition of the GSEs’ books, Dodd and Frank could always be counted on to fend off the threat of scrutiny. They would insist it was all part of an altruistic cheap-home-ownership program, but too much money was being made from government intervention to take that seriously. Dodd and Frank were aided by Fannie’s and Freddie’s well-connected lobbyists and campaign contributions. All told, they spent $200 million from 1998 to 2008. Fannie and Freddie are the ultimate Washington insiders. “They’ve stacked their payrolls with top Washington power brokers of all political stripes,” the Politico reported. Altruism, indeed.

It’s Dodd, by the way, who said of his bill, “No one will know until this is actually in place how it works.” And Frank is ready to submit new legislation to fix any mistakes in the law. We’re about to have a laboratory experiment of the law of unintended consequences.

Obama said: “For years, our financial sector was governed by antiquated and poorly enforced rules that allowed some to game the system and take risks that endangered the entire economy.” The implication is now we have up-to-date rules that will be vigorously enforced. But he can’t possibly know that. Why not? Because in writing the law, Congress did not write the rules. It merely handed that job off to unelected, unaccountable bureaucrats in a variety of agencies. In a word, Congress delegated its legislative authority, which has no authority to do. (Not that anyone cares.)

The Wall Street Journal reports,

In a recent note to clients, the law firm of Davis Polk & Wardwell needed more than 150 pages merely to summarize the bureaucratic ecosystem created by Dodd-Frank. … [T]he lawyers estimate that the law will require no fewer than 243 new formal rule-makings by 11 different federal agencies. [Emphasis added.]

The SEC alone, whose regulatory failures did so much to contribute to the panic, will write 95 new rules. The new Bureau of Consumer Financial Protection will write 24, and the new Financial Stability Oversight Council will issue 56. These won’t be one-page orders. The new rules will run into the hundreds if not thousands of pages in the Federal Register, laying out in detail what your neighborhood banker, hedge fund manager or derivatives trader can and cannot do.

In other words, your misrepresentatives have no idea what they just passed.

The Journal adds that “the biggest financial players aren’t being punished or reined in. The only certain result is that they are being summoned to a closer relationship with Washington in which the best lobbyists win, and smaller, younger firms almost always lose.”

The more the rules change the more they stay the same.

Ron Paul
Campaign For Liberty
July 27, 2010

I have often spoken about the excessive size of government, and most recently how waste and inefficiency needs to be eliminated from our military budget. Our foreign policy is not only bankrupting us, but actively creating and antagonizing enemies of the United States, and compromising our national security. Spending more and adding more programs and initiatives does not improve things for us; it makes them much much worse. This applies to more than just the military budget.

Recently the Washington Post ran an extensive report by Dana Priest and William M. Arkin on the bloated intelligence community. They found that an estimated 854,000 people hold top-secret security clearances. Just what are all these people up to? By my calculation this is about 11,000 intelligence workers per al Qaeda member in Afghanistan. This also begs the question — if close to 1 million people are authorized to know top secrets, how closely guarded are these secrets?

They also found that since the September 11 attacks, some 17 million square feet of building space has been built or is being built to accommodate the 250 percent expansion of intelligence organizations. Intelligence work is now done by some 1,271 government organizations and 1,931 private contracting companies in about 10,000 locations in the United States.

The former Director of National Intelligence, Adm. Dennis Blair, has asserted that US intelligence now has the authority to target American citizens for assassination without charge or trial. How many of these resources are being devoted to spying on American citizens for nefarious reasons at home rather than targeting foreign enemies abroad?

It has been pointed out how much information we had about the impending attacks on 9/11, but because of layers upon layers of bureaucratic inefficiencies, our intelligence community was unable to act meaningfully on that information. Obviously we needed drastic change. But it was pretty clear that we did not need more bureaucracy, more confusion, more expenditures and more government.

It is even claimed by some leaders that the intelligence community has grown this way by design; that it is advantageous to have more than one set of eyes looking at the same information. With this logic, is there any number of intelligence employees at which we achieve diminishing returns? Can there ever be too many cooks in the kitchen, in their view?

Are there any problems at all that the government wouldn’t attempt to solve by throwing more money at them? Even now, the government is trying to solve our economic problems related to too much government spending and debt, with more government spending and debt.

The problem with our intelligence community before 9/11 was not an inability to collect information. Therefore, the post-September 11 build-up of the surveillance state does nothing to enhance safety. Instead what Americans have gotten in return for the billions of tax dollars spent on security is a surveillance state that reads our e-mails, wiretaps us without warrants, and strip searches grandmothers at airports. This is yet another instance in which Americans would be safer, richer and freer if our government would simply look to the Constitution and respect the boundaries it has set.

John Tate
Campaign for Liberty
July 27, 2010

The so-called DISCLOSE Act currently under consideration in the Senate is an affront to personal liberties protected under the First and Ninth Amendments of the U.S. Constitution. This knee-jerk reaction to Citizens United v. FEC constitutes a clear and present danger not only to the expressly stated freedom of speech listed in the First Amendment , but to the reasonable expectation of privacy and freedom of association American citizens have held throughout this country’s proud history.

Thousands of non-profits and corporations are facing costly and burdensome administrative regulations from this legislation. This bill would force organizations to adopt needless layers of bureaucracy in order to comply with new FEC filing requirements. That will exponentially increase the operating costs for groups that otherwise have low overhead. Additionally, the forced “disclosure” in the “stand by your ad” requirement would consume 15 seconds or more of a 30-second TV spot. This requirement would cut down an organization’s free speech—not to mention donors’ free speech—by only allowing a group to talk about an issue for less than half of the valuable airtime they are paying for. Short, 15-second ads might have to be eliminated altogether.

The ambiguous nature of this legislation’s language attempts to intimidate businesses and non-profits into not running any ads this November, for fear that they might somehow be violating federal election law by doing nothing more than talking about the issues. This bill blurs the distinction between express advocacy for a specific candidate and mere issue advocacy. Expressing support for an issue is not the same thing as expressly endorsing a candidate. This legislation does not make a distinction between the two, and, as a result, organizations running ads this November could face expensive lawsuits after the fact for allegedly violating some unwritten enforcement provision.

We call this legislation the Establishment Protection Act because that is exactly what it is intended to do. Politicians will do anything they can to avoid being held accountable to their constituents for their actions during the legislative season. Any organization that challenges the status quo will come under greater scrutiny than those that endorse the status quo—and that will make donors to such groups targets for harassment and intimidation. Donors will be less likely to give money to “controversial” issue advocates, resulting in a chilling of free speech. Fear and intimidation are simply incompatible with a free society and intolerable.

One of the main arguments made for this legislation during House debate was the claim that this bill would decrease the amount of money spent on elections. That is an outright falsehood. Nothing in this act would decrease the amount of money it costs to run for public office; rather, by restricting third-party fundraising and advertising it actually increases the amount a candidate would need to raise, thus again favoring incumbents who have a natural fundraising edge over challengers.

Senators Schumer, Feingold, and Leahy claim on their site: “When you buy toothpaste now, the money you spend can be used directly for television ads attacking people that you believe in without you even knowing.” The senators provide no evidence to back up these claims; it appears they are quite paranoid about Colgate and Crest having a political axe to grind against them.

In today’s society, where congressional representation affords us one representative for roughly every 700,000 people, the only way for “We the People” to have a voice is by banding together under the umbrella of issue-advocacy organizations. For many individuals in America, the only way to give voice to their views is through contributing to advocacy organizations. By stifling the free speech of these organizations, Congress is stifling the free speech of the individual.

What part of “Congress shall make no law… ” do they not get?