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America’s Allies Jump Ship

As Ukraine Collapses, Europeans Tire of US Interventions

By

The Ron Paul Institute

April 13, 2016

On Sunday Ukrainian, prime minister Yatsenyuk resigned, just four days after the Dutch voted against Ukraine joining the European Union. Taken together, these two events are clear signals that the US-backed coup in Ukraine has not given that country freedom and democracy. They also suggest a deeper dissatisfaction among Europeans over Washington’s addiction to interventionism.

According to US and EU governments – and repeated without question by the mainstream media – the Ukrainian people stood up on their own in 2014 to throw off the chains of a corrupt government in the back pocket of Moscow and finally plant themselves in the pro-west camp. According to these people, US government personnel who handed out cookies and even took the stage in Kiev to urge the people to overthrow their government had nothing at all to do with the coup.

When Assistant Secretary of State Victoria Nuland was videotaped bragging about how the US government spent $5 billion to “promote democracy” in Ukraine, it had nothing to do with the overthrow of the Yanukovich government. When Nuland was recorded telling the US Ambassador in Kiev that Yatsenyuk is the US choice for prime minister, it was not US interference in the internal affairs of Ukraine. In fact, the neocons still consider it a “conspiracy theory” to suggest the US had anything to do with the overthrow.

I have no doubt that the previous government was corrupt. Corruption is the stock-in-trade of governments. But according to Transparency International, corruption in the Ukrainian government is about the same after the US-backed coup as it was before. So the intervention failed to improve anything, and now the US-installed government is falling apart. Is a Ukraine in chaos to be considered a Washington success story?

This brings us back to the Dutch vote. The overwhelming rejection of the EU plan for Ukrainian membership demonstrates the deep level of frustration and anger in Europe over EU leadership following Washington’s interventionist foreign policy at the expense of European security and prosperity. The other EU member countries did not even dare hold popular referenda on the matter – their parliaments rubber-stamped the agreement.

Brussels backs US bombing in the Middle East and hundreds of thousands of refugees produced by the bombing overwhelm Europe. The people are told they must be taxed even more to pay for the victims of Washington’s foreign policy.

Brussels backs US regime change plans for Ukraine and EU citizens are told they must bear the burden of bringing an economic basket case up to European standards. How much would it cost EU citizens to bring in Ukraine as a member? No one dares mention it. But Europeans are rightly angry with their leaders blindly following Washington and then leaving them holding the bag.

The anger is rising and there is no telling where it will end. In June, the United Kingdom will vote on whether to exit the European Union. The campaign for an exit is broad-based, bringing in conservatives, populists, and progressives. Regardless of the outcome, the vote should be considered very important. Europeans are tired of their unelected leaders in Brussels pushing them around and destroying their financial and personal security by following Washington’s foolish interventionism. No one can call any of these recent interventions a success and the Europeans know it.

One way or the other, the US empire is coming to an end. Either the money will go or the allies will go, but it cannot be sustained. The sooner the American people demand an end to these foolish policies the better.

From Lewrockwell.com, here.

המדינה מרעילה את יהודיה

“הבשר המוברח” מיו”ש: הפקחים הונחו להעלים עין

לחצים של הממשל האמריקאי, של מתאם פעולות צה”ל ביהודה ושומרון ושל ארגונים בינלאומיים הם שעמדו מאחורי הכנסת הבשר המזוהם למסעדות ולחנויות בישראל במשך שנים. ממידע שהגיע ל’מקור ראשון’ ול-nrg עולה כי שיקול מדיני גרם לממשלות ישראל להתיר להכניס תוצרת של מפעלי בשר פלסטיניים ביו”ש לתחומי הקו הירוק, בידיעה שהבשר אינו עומד בתקני בריאות הציבור. 

“עצמו עיניים במודע”, טוען פקח הבקיא בפרטים, “הייתה הנחיה, אך נאמר לשוטרים ולפקחים לא לאכוף אותה. באופן רשמי ההיתר היה להכניס את הבשר למפעלים במזרח ירושלים, אך למעשה מרגע שחצו את המחסומים לא הייתה כל מניעה להגיע איתו למערב העיר, לבית-שמש ולתל-אביב”. הנוהג נפסק רק לאחרונה בעקבות החלטה של שר החקלאות, אורי אריאל, שסירב להמשיך ולהעלים עין מהתופעה. הסירוב הזה גרר את חשיפת התופעה בימים האחרונים של הבשר המוברח. 

בשר מוברח צילום: דוברות המשטרה

מהמידע ומהמסמכים שהגיעו ל’מקור ראשון’ עולה כי במשך שנים הסכימו כל רשויות הממשלה הנוגעות בדבר לאפשר את הכנסת הבשר, מטעמים מדיניים. מדובר בראש ובראשונה במשרדי החקלאות והבריאות, אף שעדכונים הועברו גם לראש הממשלה ולשרי הביטחון והחוץ שכיהנו בישראל מתחילת העשור. 

כך למשל, במסמך רקע שכתב לפני שנתיים המנכ”ל הקודם של משרד החקלאות, רמי כהן, נכתב כי “ביוני 2010, לפי החלטת משרד הבריאות, הסתיים תוקפו של ההיתר. לאחר פנייה של גורמים מטעם מתאם הפעולות בשטחים ומשרד החוץ, וקבלת עמדתם של שר הביטחון ושר החוץ (אהוד ברק ואביגדור ליברמן – א”כ) שיש לאפשר את המשך הייבוא משיקולים מדיניים, ניתנה הנחיה לא לאכוף את האיסור על ייבוא מזון מעובד מן החי משטחי הרש”פ”. כמו כן נכתב במסמך שההנחיה המאפשרת הכנסת בשר “הוארכה מעת לעת”. 

ארגונים בינלאומיים התחייבו לסייע לפלסטינים לבנות מערכת פיקוח שתעמוד בתקנים המקובלים. המאמץ אכן הביא לשיפור מסוים, אך הבשר עדיין היה רחוק מהסף הנדרש להבטחת בריאות הציבור. הפלסטינים אף אמרו במהלך השיחות שאינם מוכנים לקבל תכתיבים תברואתיים מישראל, וסירבו לחתום על הטפסים ברשויות הבינלאומיות המסדירות סחר במוצרים מן החי. באפריל 2014, למשל, כתב כהן ש”הרשות הווטרינרית ברש”פ עדיין אינה עומדת באמות המידה הנדרשות להסמכה על פי התקנים בינלאומיים. יש צורך בתקופת זמן נוספת להביא לשיפור משמעותי בפיקוח הווטרינרי ברש”פ”. 

עם כניסתם למשרד החקלאות למדו השר אריאל והמנכ”ל שלמה בן-אליהו ש”השירות הווטרינרי ומשרד הבריאות לא מרוצים” מההסכמות בעניין ייבוא הבשר, וש”מבחינה מקצועית אין מקום לאפשר את הכנסת המוצרים, וההסכמה ניתנה עקב פניית גורמים מדיניים” – כך נכתב במסמך מאוגוסט 2015. בהנחיית אריאל נבחן הנושא מחדש, ובמהלך הבדיקה הגיעו למשרד החקלאות פניות חוזרות ונשנות של האמריקאים ושל מתאם פעולות הממשלה בשטחים, אלוף יואב (פולי) מרדכי, להמשיך להתיר את העברת הבשר למזרח ירושלים, אף שלא עמד בתקינה הנדרשת. 

בשלושה מכתבים ששיגר האלוף מרדכי בחודש שעבר למשרד החקלאות הוא ביקש להמשיך להתיר את שיווק הבשר בנימוקים מדיניים, ובראשם החשש שהרשות הפלסטינית תחרים את ישראל. בתגובה כתב לו המנכ”ל בן-אליהו: “פגיעה בריאותית באזרחי ישראל מול הטיעון שהרש”פ תחרים אותנו בלתי מתקבלת על הדעת. מערכת ההסכמים בין הצדדים מאפשרת לישראל למנוע סכנה בריאותית, ובמכתבך אין מועד ברור ותוכנית עבודה שתביא לתוצאה של עמידה בתקנים”. הוא הבהיר כי לנוכח הכשל הווטרינרי, לא תותר עוד הכנסת הבשר הפלסטיני לישראל למרות הלחצים הכבדים. 

נוסף ללחצים של אלוף מרדכי, גם הממשל האמריקאי דרש כאמור מישראל להמשיך בהכנסת הבשר לתחומי המדינה. הנושא עלה בהרחבה בחודש שעבר בפגישה בין הנספח הכלכלי של ארה”ב בישראל ובין צמרת משרד החקלאות. חמישה מנציגי השגרירות השתתפו בפגישה, שנמשכה שעתיים וחצי ורובה הוקדש לעניין הבשר הפלסטיני.

השר אריאל חשף אתמול בריאיון בגלי צה”ל קורטוב מהלחצים שספג. לדבריו, הוא אמר “לנציג של מעצמה גדולה מאוד” ש”כשאתם תהיו מוכנים להכניס את הבשר הזה לוושינגטון, אנחנו נסכים להכניס אותו לתל-אביב”. 

משגרירות ארצות הברית בישראל נמסר אמש בתגובה: כי “השגרירות לא לחצה על איש בסוגיה”. מלשכת מתאם הפעולות בשטחים נמסר כי אנשים “פועלים עם משרד החקלאות למול נציגי הרשות הפלסטינית על מנת להסדיר את התקינה והסטנדרטים הנדרשים על פי משרד החקלאות. כל ניסיון לטעון אחרת הינו מופרך מהייסוד”.

מאתר מקור ראשון, כאן.

Greedy Government Gezel (Robbery)

A Tale about Taxes

The other day I met a friend who is a large stockholder in General Motors, and he told me a story. A few weeks before, his son had used somewhat excessive strength on the mixing valve in his bathroom and broke the handle off. The local plumber couldn’t repair it, so he ordered and installed a new valve. The valve turned out to cost $22.50. The installation, at $4 an hour, brought the total up to $100.

That sounded steep enough; but it was not until my friend had made some mental calculations that he realized how steep it really was. His income falls into the 90 percent tax bracket. So he figured that in order to acquire the $100 with which to pay this plumber’s bill, he had to receive $1,000 in dividends from General Motors. (For the benefit of the non-mathematical, $1,000 in dividends minus $900 in taxes on them leaves $100 to pay a plumber’s bill.)

But this is only the beginning. In order to pay $1,000 in dividends, General Motors has to earn more than $4,000 before taxes. (General Motors earned $1,502,000,000 before payment of taxes in 1952. It had to pay $943,000,000 in taxes, leaving it $559,000,000 in net income, out of which it paid $362,000,000 in dividends. So for every $1,000 it paid out in dividends, it had to earn $4,149 before taxes.)

But in order to earn $4,149 before taxes, General Motors had to sell $21,570 worth of cars—say eighteen Chevrolets—to its dealers. (GM total sales and income in 1952 amounted to $7,645,000,000.) To sum up, because of cost and tax erosion, in order for my stock-holding friend to replace a bathroom valve, General Motors had to make and sell eighteen Chevrolets.

“So what?” some reader may ask. “If this fellow pays a 90 percent income tax, he must be rolling in it. Don’t expect me to weep.”

The point of the story is not that anyone should stop to weep, but that a few of us should stop to think. The question is not what our incredible burden of taxation is doing to this rich individual or that, but what effect is going to have in the long run on our whole economy—on productivity, wages, and employment.

Obviously a continuation of this rate and kind of taxation must undermine incentives, discourage new business ventures, and even prevent the formation of new capital for such ventures. For every dollar that General Motors paid to stockholders last year, it had to pay $3 to the government (not counting what it collected and paid in excise and sales taxes). The case of General Motors, in this respect, is not exceptional. The Department of Commerce estimates that corporate profits before taxes in 1952 were $39,700,000,000; that out of this the corporations had to pay $22,600,000,000 in taxes, and that they paid out $9,100,000,000 in dividends. In other words, the government took an average of 57 percent of all the earnings of the corporations. And for every dollar that the corporate stockholders got in dividends, the government got $2.48.

Even this does not tell us what the stockholders were able to keep in dividends after paying personal income taxes. A stockholder whose income gets into the top tax bracket of 92 percent can keep only 8 cents out of each dollar of dividends. The government gets the other 92 cents. Adding this to the $2.48 that it has already taken from the corporation gives the government $3.40. In other words, the government gets 42 times as much out of the average corporation as the investor in the top income-tax bracket is allowed to get and keep.

This may seem like a wonderful racket for the government while it lasts. But Congress should not be entirely astonished if it wakes up one day to discover—we hope not too late—that this division of the profits does not furnish the highest incentives for private investment in new enterprises; and that new venture capital has been drying up, with unpleasant effects on wages, employment, and production, and even on government revenues themselves. If we do not want to repeat the present predicament of England, we should not imitate the policies that brought her to it.

[Originally printed in Newsweek on March 30, 1953. Available in Business Tides: The Newsweek Era of Henry Hazlitt.]

From Mises.org, here.

The ‘One Percent/Ninety Nine Percent’ Wealth Difference

Economic Inequality Is Not Increasing. Propaganda Is.

Gary North – April 08, 2016

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It never ends. We are besieged by articles on today’s increasing economic inequality. These articles have three things in common:

1. Each one has a favorite explanation/boogeyman.
2. Each one calls for political reforms to make things more equal.
3. Each one fails to mention Pareto’s 20/80 law.

Here is the main problem with these articles: economic inequality has not increased since at least 1897 — the year that Vilfredo Pareto published his discovery: about 20% of the people in every European nation he studied owned about 80% of the wealth.

Every year, when about 1,500 of the richest people in the world meet at Davos, Switzerland to attend the World Economic Forum, a Left-wing group called Oxfam issues a report. The group rewrites the annual report and the accompanying press release, but it is always conveys the same message: about 1% of the rich own 50% of the world’s wealth. I wrote a response to Oxfam and its report in 2014: “Envy Never Sleeps: Attacking the Rich.” I did this again in 2015: “Pareto Statistic: The Wealthiest 1% Will Soon Own 50% of the World’s Wealth.”

The Right also indulges in similar expressions of outrage. Here is an example.

A PARETO PYRAMID

This was offered by Charles Hugh Smith. I like it because it includes a pair of graphics. Both of them are tied to the underlying image of a pyramid: straight sides, with the same angle all the way up, from base to capstone. The image is pure Pareto.

http://www.oftwominds.com/blogapr16/centralized-money4-16.html
We are supposed to be aghast.

I am not.

The Pareto law is a power law. The same 20/80 rule applies all the way up. This is why it is a pyramid.

1. 20% of the population owns 80% of the wealth.
2. 4% (.2 x 20%) of the population owns 64% (.8 x 80%) of the wealth.
3. 0.8% (.2 x 4%) of the population owns 51% (.8 x 64%) of the wealth.

Smith’s pyramid shows that 0.7% of the population owns 45% of the wealth.

This sounds about right. As we say, it’s close enough for government work.

Smith blames this pyramid on the Federal Reserve System.

His explanation makes sense to all of us anti-central bank fanatics with respect to which groups are at the top. It makes no sense with respect to the existence of the pyramid. That’s because nothing makes sense with respect to the existence of the pyramid.

We do not know what causes it. We only know that it is as close to universal as any outcome in history.

Taking Smith at his word, the Federal Reserve is the cause of this pyramid. But it isn’t. It is merely the cause of who gets into the top of the pyramid — maybe.

To understand who gets in and who is shoved out, and why, we first need to know the law governing the structure of the pyramid. Sadly, no one has proposed a plausible explanation.

Smith resurrects his graphics in an April 6, 2016 article.

Smith is a well-meaning author. He just doesn’t understand the presence of Pareto’s law. He never mentions it.

REFORM!

Because critics of this or that institution of modern capitalism want to pillory this institution for inequality, they resurrect this pyramid of ownership. They cry out: “Shame! Shame!” Then they cry out: “Reform! Reform!”

The favorite boogeyman may well be the cause of which group gets into the top. But readers should never forget this rule of analysis: this does not explain the perpetual nature of the 20/80 pattern.

Here is the problem: the pattern will persist in the post-reform period. Then new groups can bring their accusations of unfair political system-rigging against whichever group is now in the top 1% (actually 0.8%).

There will be debate about how people get into the top group. There will be debate about exactly who has squeezed his way in. But of this we can be sure: the pyramid will be there, just as Cheops’ pyramid is. All the other seven wonders of the ancient world have disappeared, but this one remains, oblivious to change. No one knows how the Egyptians built it, just as no one knows why Pareto’s pyramid persists.

The reformers just do not get it: the Pareto pyramid is found everywhere, no matter which reform group won the most recent reform.

This does not just apply to wealth. It applies across the board in institution after institution. No one knows why, but it does.

Richard Koch has created a personal publishing cottage industry by writing books on Pareto in business. They are good books. I assign two of them to my Business I students in the Ron Paul Curriculum.

The Pareto curve is a huge grab bag of instant outrage for authors who need something to write about, either for or against a particular reform.

It really is a shame that no one can explain it.

CONCLUSION

The Pareto law is not only widespread, it is convenient for all economic reformers. All they need to do is this, when writing their justifications for reform:

1. Plug in the latest statistics on wealth distribution.
2. Create a pyramid graphic.
3. Offer an explanation as to how a group has politically rigged the economy to favor itself.
4. Call for reform.

All this requires the following:

5. A refusal to mention that the latest distribution deviates only slightly from a universal pattern.

From Gary North, here.