Friday, June 17, 2011

2012 Endorsement: Ron Paul

It should come as no surprise to anyone who has read this blog before that I am endorsing Ron Paul for President in 2012. In a political climate in which buzz words like "hope," and "change" are so casually tossed around as to be meaningless, Congressman Paul offers our nation the only hope for real change. Our nation is mired in three foreign wars that Dr. Paul warned against, remains in the midst of an economic collapse that Dr. Paul predicted, and our liberties are continuously being eroded by an enlarging security apparatus that Dr. Paul opposed. The ever expanding welfare/warfare state that Dr. Paul has consistently opposed and that mainstream politicians in both major political parties have enlarged now faces a debt crisis that can only be corrected by returning federal government to its constitutionally defined roles. These are the key issues of the 2012 campaign and no candidate in either party offers credible (or even fantastical) solutions to address them other than Ron Paul. While Rome burns, the Neros in both political parties are fiddling away with their tired and empty rhetoric about what tax rates should be and who should pay them and completely ignore the root causes of our current predicament. If the United States is to emerge from our current woes as a stronger and more prosperous nation, the status quo must be rejected and the only candidate challenging the status quo is Congressman Ron Paul.


In the fall of 2008, the 2008 election suddenly became a referendum on the economy when the housing bubble collapsed and banks with bad debt started to fail. The Republican candidate, Senator John McCain, enjoyed a slight lead in the polls, even after Sarah Palin's gaffes, until the stock market crashed less than a week after Senator McCain proclaimed, "the fundamentals of the economy are strong." McCain followed this with the second gaffe of suspending his campaign to rush to Washington to, "do something," about a financial crisis he didn't even see on the horizon a week earlier. Saddled with these gaffes and being the candidate of the party presiding over the collapse, McCain's lead vanished and Barack Obama became the 44th President of the United States.

Ron Paul had been warning about a collapse in the housing bubble since 2002. Easy credit, fueled by the Federal Reserve maintaining artificially low interest rates and risky lending encouraged by the Community Reinvestment Act, greed and subprime lending, and securitization of bad debt by quasi-government lenders, such as Fannie Mae and Freddie Mac, led to the creation of a lot of bad debt and skyrocketing real estate prices from increasing demand. None of this was sustainable and when the U.S. dollar began to weaken from the Fed's expansion of the money supply, the bubble burst. What has been the response of politicians on both sides of the aisle? They have tried to re-inflate the bubble with bail outs, TARP and continued low interest rates. Candidate Bill Clinton once reminded us that one definition of insanity is doing the same thing over and over and expecting a different result. Yet politicians on both sides of the aisle have responded to our current recession with the same policies that got us in to it. The other candidates for President, on both sides of the aisle, propose only additional Keynesianism to get us out: either tax cuts or stimulus spending. Congressman Paul also recognizes the moral hazard of government securitizing bad loans. When investors reap all the profits, but taxpayers will take all the losses, risky lending is encouraged.

Establishment politicians and mainstream media paint Ron Paul's economic ideas as extreme by focusing on his desire to return to the gold standard and his call to end the Federal Reserve. Clearly neither is likely to happen in a Ron Paul administration as both would require acts of Congress to achieve. But, the salient economic point here is that Dr. Paul recognizes that one source of our economic woes is the weakening of our dollar. This is caused by printing and borrowing to cover excessive government spending and lowering interest rates which sends signals that there is a surplus of capital available for borrowing, when in reality there is not (which fuels borrowing against artificial wealth instead of true accumulated capital). The surplus of printed dollars devalues the savings of every American and particularly reduces the buying power of those at the lower end of the socioeconomic scale. A commodity backed currency (i.e. the gold standard) is not readily inflatable and it is the Federal Reserve that carries out this policy of printing dollars and lowering interest rates. While a return to a commodity currency and abolishing the Federal Reserve may not be practical, clearly our current monetary policy which creates economic bubbles and robs us all of wealth needs to change. In the Republican presidential debate in New Hampshire last week, Congressman Paul was the only candidate who discussed the importance of a change in monetary policy to address the structural problems in our economy. Canada, despite also having a fiat currency, has developed the strongest currency in the western hemisphere, if not the world, through sounder monetary policy. Ron Paul's proposals to allow commodity currency to compete openly with Federal Reserve notes and to give Congress greater autonomy to audit the Federal Reserve may go a long way toward achieving a sounder U.S. dollar, even if his ideals of a gold standard and abolishing the Federal Reserve are neither achievable nor desirable.


Our federal debt has reached over $14 trillion USD. This is about 90% of GDP and the federal debt is projected to exceed 100% of GDP by the end of this fiscal year (Greek debt was about 125% of GDP when their fiscal crisis came to a head). An ever growing percentage of the federal budget is devoted to paying interest on this debt to our creditors (including China), which diverts resources away from other functions of government. Added to the burden of accumulated federal debt is the underfunded liability of entitlement programs. Both Medicare and Social Security are funded by taxing current workers to pay the benefits of current retirees, and not out of some sort of trust fund that allowed your contributions to grow into your benefits. They are Ponzi schemes that become unsustainable as the ratio of workers to retirees dwindles. That day of reckoning is soon as retirees are living longer and the baby boomer generation (the largest generation in U.S. history) is leaving the work force and joining the ranks of retirees. Escalation of health care costs (which, contrary to rhetoric, the "Obama-care," health insurance reform did nothing to address) make the solvency of Medicare particularly precarious and the both the Bush and Obama administrations saw fit to burden the taxpayer with additional health care entitlements.

Dealing with the debt crisis is the most important issue that the next President will face and of the field, it is Ron Paul who offers long term solutions. President Obama has demonstrated that nothing will curtail his penchant for spending and offers only tax increases. Other Republican candidates offer some modest spending cuts, pay lip service to modest entitlement reform (raising retirement ages, means testing benefits...), and insist that lower taxes will generate economic growth and greater revenue. The only other Republican (who is not running) who offers a credible plan to deal with entitlement programs is Congressman Paul Ryan (WI). However the Ryan plan ignores defense spending, which amounts to substituting a warfare state for a welfare state. Ron Paul understands that it is inflatable currency that allows government to pay (at least temporarily) for expanding social programs and perpetual war. Step one in slowing growth of our debt is sounder monetary policy. Step two is realizing that the Constitution sets limits on federal government and only reducing its scope to those levels is going to bring our debt under control. Step three involves cutting military spending by ending unnecessary and immoral wars overseas and using those savings to sure up federal programs for the transition to a more constitutionally limited government while not abandoning current beneficiaries who rely on those programs. President Obama is not talking about any significant cuts in federal spending and no Republican seems willing to entertain cuts in military spending. Congressman Paul supports both as the only path out of the budgetary abyss. Only after structural spending liability is addressed and after the role of government is adjusted can a meaningful conversation about taxes (what kind of tax should we have?, who should be taxed and at what rate, etc.) occur.


Excessive military spending is not only a drain on our economy, but it is also a threat to our liberty at home. Governments always assume more power and curtail liberty in time of war, but the war on terror is perpetual. In the name of security, we have accepted ever expanding encroachments on our liberty. The PATRIOT Act allows the federal government to review your library records. After illegally eavesdropping on mobile phone calls placed overseas, President Bush signed (and Barack Obama voted for) an expansion of federal wiretapping authority that makes a mockery of the FISA courts. Terror suspects are held indefinitely in offshore prisons outside the rule of law. Federal investigations use, "enhanced interrogation techniques." Airport screenings have become increasingly invasive. Of the GOP candidates for President, only Ron Paul and Gary Johnson have called for rolling back these measures. President Obama has embraced this new federal power. Gitmo remains open and indefinite detentions continue. Routine use of water boarding may have stopped, but President Obama retains his prerogative to authorize it in select cases. Iraq and Afghanistan remain occupied and the U.S. is now involved militarily in Libya without any authorization from Congress whatsoever. Not only did Senator Obama vote to expand federal wiretapping authority, but President Obama has maintained a federal program of targeted assassination of terror suspects, even if those suspects are U.S. citizens. Ron Paul has opposed all of these measures in specific and interventionist foreign policy in general. For anyone concerned about the erosion of civil liberties since 9/11, Ron Paul is the clear candidate.


Why Ron Paul and not Gary Johnson? What Gary Johnson brings to the table is his experience. He was a successful two-term governor who actually did a lot of the things other Republicans only talk about in terms of shrinking government. I favour Ron Paul over Gary Johnson for two reasons, one ideological and the other practical. The ideological is that Ron Paul is a better defender of the Constitution. While Johnson is good at pointing out how and why government schemes don't or won't work, he is a self-described empiricist and if presented with data that a certain program is accomplishing a desired goal (without other unintended detrimental consequences) he could be persuaded to support it, even if it is not a proper role for federal government. I, on the other hand, believe the Constitution forbids the federal government from being involved in certain things, even if such intervention might be advantageous. The practical is, I actually do think Ron Paul is more electable. He has national organization, better name recognition, and solid fund raising. Furthermore, Paul and Johnson illustrate the libertarian divide on abortion. Unlike Gary Johnson, Ron Paul is firmly anti-abortion, which makes him more electable in a GOP primary and might go a long way to helping more socially conservative voters over look his position on drug legalization.

Because of some of his libertarian positions that are not accepted by social conservatives, establishment politicians and mainstream media (as well as many of my friends) have labeled him unelectable. In truth he is only unelectable if we continue to believe it so. With the addition of Bachmann, Gingrich, and Romney to the field; Ron Paul is no longer polling second in the GOP race. However he, Cain, Gingrich and Bachmann are polling within the margin of error of one another and Ron Paul still polls better in a head-to-head match up with Barack Obama than any GOP contender other than Mitt Romney. While Romney may seem electable, he probably is not. Not only is "Romney-care," an albatross around his neck in the GOP primary, but the truth is nothing Mitt Romney says can be believed. He has changed his positions so many times to suit the prevailing breeze, n0 one can comfortably vote for him and predict how he might govern. After two successive Presidents who said one thing and did another, it is time to elect someone with a voting record that matches his rhetoric, like Ron Paul. Only Ron Paul can credibly challenge Barack Obama on issues of civil liberties. The New Hampshire electorate is rather libertarian and increasing numbers of libertarians have moved there as part of the Free-State movement. Although Romney, who governed a neighbouring state and has a residence in New Hampshire, will almost certainly win the nation's first primary (of course we thought that in 2008 too, didn't we?); the libertarian electorate and New Hampshire's open primary, which will allow Democrats and Independents who support Ron Paul's civil liberties agenda and have no Democrat race to vote in to crossover and vote for Ron Paul, gives Ron Paul a good chance to emerge from the New Hampshire primary in the top three. Ron Paul is electable if more of us choose to believe he is and rather than holding our noses and voting for the lesser of evils instead of, "throwing away our vote," vote our conscience.

Congressman Ron Paul is the only electable candidate whose actions match his rhetoric, who is committed to ending the status quo and putting America on a different path, who will make government live within its means, address our weak economy and devalued dollar, and protect our civil liberties. For these reasons, I wholeheartedly endorse Ron Paul for President of the United States in 2012.