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Posts Tagged ‘Interventionism’

Latin America’s Descent into Interventionism Continues | Mises Wire

Posted by M. C. on December 31, 2022

Why would “populist” governments impose policies that perpetuate poverty and hurt the people? Interventionism does not aim to increase prosperity but take full control of a nation. The three mentioned policies are aimed at grasping full control of a country and make the population dependent, not deliver growth and improve social conditions.

Daniel Lacalle

The latest estimates from consensus for the main Latin American economies show a continent facing a lost decade. The region GDP growth has been downgraded yet again to a modest 1.1% for 2023, with rising inflation and weakening gross fixed investment. Considering that the region was already recovering at a slower pace than other emerging markets, the outlook is exceedingly worrying.

The poor growth and high inflation expectations are even worse when we consider that consensus estimates still consider a tailwind coming from rising commodity prices and more exports due to the China re-opening.

How can a region with such high potential as Latin America be condemned to stagflation? The answer is simple. The rise of populist governments in Colombia, Chile and Brazil have increased the concerns about investor security, property rights and monetary discipline.

Argentina is expected to post a modest 0.2% GDP growth in 2023 with 95% inflation and a debt to GDP of 72%. Years of monetary and fiscal excess have destroyed the purchasing power of the local currency and dilapidated the prospect of real growth. In Argentina, poverty has escalated to 36.5% of the population and the government policies double down on interventionism, price controls and higher taxes with the expected negative result. Despite the tailwind of high demand for soja and cereals globally, Argentina dives deeper into Venezuela territory, where consensus expects another year of weak 3% bounce after destroying 80% of the output in a decade, with enormous inflation, 132%.

The problem? The new governments in Chile and Colombia are announcing policies that resemble those of the “Peronist left” in Argentina and the Fernandez government in Argentina is looking more like Maduro’s Venezuela each day.

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Pelosi’s Taiwan Trip Exposes Foolishness of Interventionism

Posted by M. C. on August 9, 2022

By Ron Paul, MD

Ron Paul Institute

The US fighting a proxy war with Russia through Ukraine and Nancy Pelosi provoking China nearly to the point of war over Taiwan is meant to show the world how tough we are. In reality, it demonstrates the opposite. The drunken man in a bar challenging everyone to a fight is not tough. He’s foolish.

House Speaker Nancy Pelosi’s “surprise” trip to Taiwan last week should be “Exhibit A” as to why interventionism is dangerous, deadly, and dumb. Though she claimed her visit won some sort of victory for democracy over autocracy, the stopover achieved nothing of the sort. It was a pointless gesture that brought us closer to military conflict with zero benefits.

As Col. Doug Macgregor said of Pelosi’s trip on a recent episode of Tucker Carlson Tonight, “statesmanship involves advancing American interests at the least cost to the American people. None of that is in play here. … Posturing is not statesmanship.”

Pelosi’s trip was no outlier. Such counterproductive posturing is much celebrated by both parties in Washington. Neoconservative Senators Bob Menendez and Lindsey Graham were thrilled with Pelosi’s stop in Taipei and used it as a springboard to push for new legislation that would essentially declare war on China by declaring Taiwan a “major non-NATO ally.”

The “one China” policy that, while perhaps not perfect, has kept the peace for more than 40 years is to be scrapped and replaced with one sure to provoke a war. Who benefits?

Foolishly taking the US to the brink of war with Russia over Ukraine is evidently not enough for Washington’s bipartisan warmongering class. Risking a nuclear war on two fronts, with both Russia and China, is apparently the only way for Washington to show the rest of the world it’s serious.

The Washington Post’s neoconservative columnist Josh Rogin accurately captures the mindset in Washington DC with a recent article titled, “The skeptics are wrong: The US can confront both China and Russia.”

For Washington’s foreign policy “experts,” those of us who don’t believe a war with both Russia and China is a great idea are written off as “skeptics.” Count me as one of the skeptics!

During the Cold War there were times of heightened tension, but even in the darkest days the idea that nuclear war with China and the Soviet Union could be a solution was held only by only a few madmen. Now, with the ideological struggles of the Cold War a decades-old memory, such an argument makes even less sense. Yet this is what Washington is selling.

The US fighting a proxy war with Russia through Ukraine and Nancy Pelosi provoking China nearly to the point of war over Taiwan is meant to show the world how tough we are. In reality, it demonstrates the opposite. The drunken man in a bar challenging everyone to a fight is not tough. He’s foolish. He has nothing to gain and everything to lose from his display of bravado.

That is interventionism at its core: a foolish policy that provokes nothing but anger overseas, benefits no one in the US except the special interests, and leaves the rest of us much poorer and worse off.

There may be plenty to criticize about China’s government and policies. They are far from perfect, particularly in protection of civil liberties. But have we already forgotten that our own government shut down the country for two years over a virus, and then forced a huge number of Americans to take an experimental shot that is proving to be as worthless as it is dangerous? Let’s look at the log in our own eye before we start lobbing missiles overseas.

Copyright © 2022 by RonPaul Institute. Permission to reprint in whole or in part is gladly granted, provided full credit and a live link are given.
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How Albright’s ‘Munich mindset’ turned into uninhibited interventionism

Posted by M. C. on March 25, 2022

In response to a question about the reported deaths of hundreds of thousands of Iraqi children as a result of sanctions, Albright said, “I think this is a very hard choice, but the price–we think the price is worth it.”

Written by
Daniel Larison

She was a refugee who rose to the highest levels of government and became a well-positioned advocate of American exceptionalism.

Madeleine Albright, the first female U.S. Secretary of State, a prominent liberal interventionist, and promoter of NATO expansion, died on Wednesday from cancer at the age of 84.

Born in Prague on the eve of the Second World War, Albright came to the United States with her family as refugees and rose to the highest levels of government service. A scholar of international relations and a professor at Georgetown University, she entered public service as ambassador to the United Nations in Bill Clinton’s first term, and then was nominated to lead the State Department in the second. 

Albright was a major influence on the Clinton administration’s foreign policy and consistently pushed for a more hawkish and interventionist line in response to foreign crises and conflicts. Her foreign policy worldview was rooted in the history of a Europe ravaged by total war, but this also served to distort her understanding of international problems and encouraged her to favor military options too often. She was a significant influence on the increasingly combative approach at the end of Clinton’s presidency, and her role in building support for U.S./NATO military intervention in Kosovo was her legacy.

“My mindset is Munich,” she would often say as an explanation of how she saw the world, and like generations of Europeans and Americans haunted by WWII she made the mistake of seeing new Munichs around every corner. As Owen Harries observed a quarter-century ago when Albright was nominated to lead the State Department, “she epitomizes a belief in the virtue of uninhibited American interventionism.” Entering government service in the 1990s when U.S. power was at its apex, Albright was well-positioned to advocate for that uninhibited interventionism. Especially in the Balkans, she succeeded in making that official policy.

Albright has long served as the exemplar of overreaching American interventionism in the 1990s. According to a famous anecdote, she berated Colin Powell, then Chairman of the Joint Chiefs, “What’s the point of having this superb military you’re always talking about if we can’t use it?” 

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Ukraine Crisis: A Nightmare Caused by US Interventionism

Posted by M. C. on February 15, 2022

What the US media will not report is that this entire crisis – and the threat of a serious war – has all been brought about by US interference in the internal affairs of Ukraine, specifically the US-backed coup that overthrew an elected government in 2014. Every bit of unrest in Ukraine proceeded from that single foolish and immoral act by the Obama Administration.

Written by Ron Paul

Over the weekend we heard that the US is evacuating its embassy in Kiev for fear of a Russian invasion. We also heard that Russia is evacuating its embassy in Kiev for fear of a US-backed provocation in eastern Ukraine that may lead to a Russian military response.

We are in “uncharted territory” the media tells us. Yes, that is true. But it is uncharted because no one had ever imagined in the past that the US government would be so foolish to risk a thermonuclear war over the borders of a country – Ukraine – that have changed so many times over the past century.

An urgent Biden-Putin phone call on Saturday did not lead to any breakthrough – as if anyone thought it would. Instead, it provided cover for Biden Administration hawks to claim they tried every diplomatic approach, but war seems to be the only option.

But this whole thing is a farce. As I see it, here is the Ukraine crisis in a nutshell:

Biden to Putin: “Don’t invade Ukraine.”

Putin to Biden: “We have no intention of invading Ukraine.”

Biden to the US media: “Putin is about to invade Ukraine!”

Then Biden’s top officials proceed to embarrass themselves by warning that the invasion was imminent. Or it’s coming next Tuesday, or Wednesday, or surely before the end of the Olympics. Does anyone think they have any credibility left with their constant hysterical warnings?

Meanwhile “US intelligence” continues to leak incendiary information – likely self-serving – to a US media that has lost any interest in skepticism toward any “scoop” handed down by US government officials.

What the US media will not report is that this entire crisis – and the threat of a serious war – has all been brought about by US interference in the internal affairs of Ukraine, specifically the US-backed coup that overthrew an elected government in 2014. Every bit of unrest in Ukraine proceeded from that single foolish and immoral act by the Obama Administration.

That is why we are non-interventionist. The philosophy of non-interventionism is one very good piece of insurance protecting us from needless war. If you don’t meddle in the affairs of foreign countries, there is less chance of being dragged into an unnecessary war.

Ukraine is a great example of why non-interventionism is the only pro-America foreign policy. We are risking nuclear war with Russia over what? Ukraine’s borders? Surely most Americans see how idiotic this is.

The Biden Administration is at present shell-shocked that the Russian government did not back down over plans to expand NATO to Ukraine. Russia understandably views NATO membership for Ukraine -with its Article 5 guarantees – to be an unacceptable threat considering the ongoing border disputes.

This is not our fight, yet Biden’s foreign policy team has decided it’s a great time to kick the hornet’s nest.

Is it all about Biden’s dismal approval ratings? What a sick thing to risk a major war over. We need to stand up and say “enough.” Before it’s too late.

Copyright © 2022 by RonPaul Institute. Permission to reprint in whole or in part is gladly granted, provided full credit and a live link are given.
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The Middle of the Road Leads to Socialism

Posted by M. C. on October 30, 2021

Ludwig von Mises

PDF iconmiddle_of_the_road_leads_to_socialism_mises.pdf

The fundamental dogma of all brands of socialism and communism is that the market economy or capitalism is a system that hurts the vital interests of the immense majority of people for the sole benefit of a small minority of rugged individualists. It condemns the masses to progressing impoverishment. It brings about misery, slavery, oppression, degradation and exploitation of the working men, while it enriches a class of idle and useless parasites.

This doctrine was not the work of Karl Marx. It had been developed long before Marx entered the scene. Its most successful propagators were not the Marxian authors, but such men as Carlyle and Ruskin, the British Fabians, the German professors, and the American Institutionalists. And it is a very significant fact that the correctness of this dogma was contested only by a few economists who were very soon silenced and barred from access to the universities, the press, the leadership of political parties and, first of all, public office. Public opinion by and large accepted the condemnation of capitalism without any reservation.

1. Socialism

But, of course, the practical political conclusions which people drew from this dogma were not uniform. One group declared that there is but one way to wipe out these evils, namely to abolish capitalism entirely. They advocate the substitution of public control of the means of production for private control. They aim at the establishment of what is called socialism, communism, planning, or state capitalism. All these terms signify the same thing. No longer should the consumers, by their buying and abstention from buying, determine what should be produced, in what quantity and of what quality. Henceforth a central authority alone should direct all production activities.

2. Interventionism, Allegedly a Middle-of-the-Road Policy

A second group seems to be less radical. They reject socialism no less than capitalism. They recommend a third system, which, as they say, is as far from capitalism as it is from socialism, which as a third system of society’s economic organization, stands midway between the two other systems, and while retaining the advantages of both, avoids the disadvantages inherent in each. This third system is known as the system of interventionism. In the terminology of American politics it is often referred to as the middle-of-the-road policy.

What makes this third system popular with many people is the particular way they choose to look upon the problems involved. As they see it, two classes, the capitalists and entrepreneurs on the one hand and the wage earners on the other hand, are arguing about the distribution of the yield of capital and entrepreneurial activities. Both parties are claiming the whole cake for themselves. Now, suggest these mediators, let us make peace by splitting the disputed value equally between the two classes. The State as an impartial arbiter should interfere, and should curb the greed of the capitalists and assign a part of the profits to the working classes. Thus it will be possible to dethrone the moloch capitalism without enthroning the moloch of totalitarian socialism.

Yet this mode of judging the issue is entirely fallacious. The antagonism between capitalism and socialism is not a dispute about the distribution of booty. It is a controversy about which two schemes for society’s economic organization, capitalism or socialism, is conducive to the better attainment of those ends which all people consider as the ultimate aim of activities commonly called economic, viz., the best possible supply of useful commodities and services. Capitalism wants to attain these ends by private enterprise and initiative, subject to the supremacy of the public’s buying and abstention from buying on the market. The socialists want to substitute the unique plan of a central authority for the plans of the various individuals. They want to put in place of what Marx called the “anarchy of production” the exclusive monopoly of the government. The antagonism does not refer to the mode of distributing a fixed amount of amenities. It refers to the mode of producing all those goods which people want to enjoy.

The conflict of the two principles is irreconcilable and does not allow for any compromise. Control is indivisible. Either the consumers’ demand as manifested on the market decides for what purposes and how the factors of production should be employed, or the government takes care of these matters. There is nothing that could mitigate the opposition between these two contradictory principles. They preclude each other. Interventionism is not a golden mean between capitalism and socialism. It is the design of a third system of society’s economic organization and must be appreciated as such.

3. How Interventionism Works

It is not the task of today’s discussion to raise any questions about the merits either of capitalism or of socialism. I am dealing today with interventionism alone. And I do not intend to enter into an arbitrary evaluation of interventionism from any preconceived point of view. My only concern is to show how interventionism works and whether or not it can be considered as a pattern of a permanent system for society’s economic organization.

The interventionists emphasize that they plan to retain private ownership of the means of production, entrepreneurship and market exchange. But, they go on to say, it is peremptory to prevent these capitalist institutions from spreading havoc and unfairly exploiting the majority of people. It is the duty of government to restrain, by orders and prohibitions, the greed of the propertied classes lest their acquisitiveness harm the poorer classes. Unhampered or laissez-faire capitalism is an evil. But in order to eliminate its evils, there is no need to abolish capitalism entirely. It is possible to improve the capitalist system by government interference with the actions of the capitalists and entrepreneurs. Such government regulation and regimentation of business is the only method to keep off totalitarian socialism and to salvage those features of capitalism which are worth preserving. On the ground of this philosophy, the interventionists advocate a galaxy of various measures. Let us pick out one of them, the very popular scheme of price control.

4. How Price Control Leads to Socialism

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Ludwig von Mises

Ludwig von Mises was the acknowledged leader of the Austrian school of economic thought, a prodigious originator in economic theory, and a prolific author. Mises’s writings and lectures encompassed economic theory, history, epistemology, government, and political philosophy. His contributions to economic theory include important clarifications on the quantity theory of money, the theory of the trade cycle, the integration of monetary theory with economic theory in general, and a demonstration that socialism must fail because it cannot solve the problem of economic calculation. Mises was the first scholar to recognize that economics is part of a larger science in human action, a science that he called praxeology.

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Woodrow Wilson’s “Second Personality” | Mises Institute

Posted by M. C. on July 10, 2021

One of the original Progressives

In April, 1914, a group of American sailors landed their ship in Tampico without permission of the authorities and were arrested. As soon as the Mexican commander heard of the incident, he had the Americans released and sent a personal apology. That would have been the end of the affair “had not the Washington administration been looking for an excuse to provoke a fight,” in order to benefit the side Wilson favored in the civil war.

Ralph Raico

Wherever blame for the war might lie, for the immense majority of Americans in 1914 it was just another of the European horrors from which our policy of neutrality, set forth by the Founding Fathers of the Republic, had kept us free. Pašić, Sazonov, Conrad, Poincaré, Moltke, Edward Grey, and the rest—these were the men our Fathers had warned us against. No conceivable outcome of the war could threaten an invasion of our vast and solid continental base. We should thank a merciful Providence, which gave us this blessed land and impregnable fortress, that America, at least, would not be drawn into the senseless butchery of the Old World. That was unthinkable.

However, in 1914 the president of the United States was Thomas Woodrow Wilson.

The term most frequently applied to Woodrow Wilson nowadays is “idealist.” In contrast, the expression “power-hungry” is rarely used. Yet a scholar not unfriendly to him has written of Wilson that “he loved, craved, and in a sense glorified power.” Musing on the character of the US government while he was still an academic, Wilson wrote: “I cannot imagine power as a thing negative and not positive.”1 Even before he entered politics, he was fascinated by the power of the presidency and how it could be augmented by meddling in foreign affairs and dominating overseas territories. The war with Spain and the American acquisition of colonies in the Caribbean and across the Pacific were welcomed by Wilson as productive of salutary changes in our federal system. “The plunge into international politics and into the administration of distant dependencies” had already resulted in “the greatly increased power and opportunity for constructive statesmanship given the President.”

When foreign affairs play a prominent part in the politics and policy of a nation, its Executive must of necessity be its guide: must utter every initial judgment, take every first step of action, supply the information upon which it is to act, suggest and in large measure control its conduct. The President of the United States is now [in 1900], as of course, at the front of affairs…. There is no trouble now about getting the President’s speeches printed and read, every word…. The government of dependencies must be largely in his hands. Interesting things may come of this singular change.

Wilson looked forward to an enduring “new leadership of the Executive,” with even the heads of Cabinet departments exercising “a new influence upon the action of Congress.”2

In large part Wilson’s reputation as an idealist is traceable to his incessantly professed love of peace. Yet as soon as he became president, prior to leading the country into the First World War, his actions in Latin America were anything but pacific. Even Arthur S. Link (whom Walter Karp referred to as the keeper of the Wilsonian flame) wrote, of Mexico, Central America, and the Caribbean: “the years from 1913 to 1921 [Wilson’s years in office] witnessed intervention by the State Department and the navy on a scale that had never before been contemplated, even by such alleged imperialists as Theodore Roosevelt and William Howard Taft.” The protectorate extended over Nicaragua, the military occupation of the Dominican Republic, the invasion and subjugation of Haiti (which cost the lives of some 2,000 Haitians) were landmarks of Wilson’s policy.3 All was enveloped in the haze of his patented rhetoric of freedom, democracy, and the rights of small nations. The Pan-American Pact which Wilson proposed to our southern neighbors guaranteed the “territorial integrity and political independence” of all the signatories. Considering Wilson’s persistent interference in the affairs of Mexico and other Latin states, this was hypocrisy in the grand style.4

The most egregious example of Wilson’s bellicose interventionism before the European war was in Mexico. Here his attempt to manipulate the course of a civil war lead to the fiascoes of Tampico and Vera Cruz.

In April, 1914, a group of American sailors landed their ship in Tampico without permission of the authorities and were arrested. As soon as the Mexican commander heard of the incident, he had the Americans released and sent a personal apology. That would have been the end of the affair “had not the Washington administration been looking for an excuse to provoke a fight,” in order to benefit the side Wilson favored in the civil war. The American admiral in charge demanded from the Mexicans a 21-gun salute to the American flag; Washington backed him up, issuing an ultimatum insisting on the salute, on pain of dire consequences. Naval units were ordered to seize Vera Cruz. The Mexicans resisted, 126 Mexicans were killed, close to 200 wounded (according to the US figures), and, on the American side, 19 were killed and 71 wounded. In Washington, plans were being made for a full-scale war against Mexico, where in the meantime both sides in the civil war denounced Yanqui aggression. Finally, mediation was accepted; in the end, Wilson lost his bid to control Mexican politics.5

Two weeks before the assassination of the archduke, Wilson delivered an address on Flag Day. His remarks did not bode well for American abstention in the coming war. Asking what the flag would stand for in the future, Wilson replied: “for the just use of undisputed national power … for self-possession, for dignity, for the assertion of the right of one nation to serve the other nations of the world.” As president, he would “assert the rights of mankind wherever this flag is unfurled.”6

Wilson’s alter ego, a major figure in bringing the United States into the European War, was Edward Mandell House. House, who bore the honorific title of “Colonel,” was regarded as something of a “Man of Mystery” by his contemporaries. Never elected to public office, he nonetheless became the second most powerful man in the country in domestic and especially foreign affairs until virtually the end of Wilson’s administration. House began as a businessman in Texas, rose to leadership in the Democratic politics of that state, and then on the national stage. In 1911, he attached himself to Wilson, then Governor of New Jersey and an aspiring candidate for president. The two became the closest of collaborators, Wilson going so far as to make the bizarre public statement that: “Mr. House is my second personality. He is my independent self. His thoughts and mine are one.”7

Light is cast on the mentality of this “man of mystery” by a futuristic political novel House published in 1912, Philip Dru: Administrator. It is a work that contains odd anticipations of the role the Colonel would help Wilson play.8 In this peculiar production, the title hero leads a crusade to overthrow the reactionary and oppressive money-power that rules the United States. Dru is a veritable messiah-figure: “He comes panoplied in justice and with the light of reason in his eyes. He comes as the advocate of equal opportunity and he comes with the power to enforce his will.” Assembling a great army, Dru confronts the massed forces of evil in a titanic battle (close to Buffalo, New York): “human liberty has never more surely hung upon the outcome of any conflict than it does upon this.” Naturally, Dru triumphs, and becomes “the Administrator of the Republic,” assuming “the powers of a dictator.” So unquestionably pure is his cause that any attempt to “foster” the reactionary policies of the previous government “would be considered seditious and would be punished by death.” Besides fashioning a new Constitution for the United States and creating a welfare state, Dru joins with leaders of the other great powers to remake the world order, bringing freedom, peace, and justice to all mankind.9 A peculiar production, suggestive of a very peculiar man, the second most important man in the country.

Wilson utilized House as his personal confidant, advisor, and emissary, bypassing his own appointed and congressionally scrutinized officials. It was somewhat similar to the position that Harry Hopkins would fill for Franklin Roosevelt some 20 years later.

When the war broke out, Wilson implored his fellow citizens to remain neutral even in word and thought. This was somewhat disingenuous, considering that his whole administration, except for the poor baffled secretary of state, William Jennings Bryan, was pro-Allied from the start. The president and most of his chief subordinates were dyed-in-the-wool Anglophiles. Love of England and all things English was an intrinsic part of their sense of identity. With England threatened, even the chief justice of the United States Supreme Court, Edward D. White, voiced the impulse to leave for Canada to volunteer for the British armed forces. By September 1914, the British ambassador in Washington, Cecil Spring-Rice, was able to assure Edward Grey, that Wilson had an “understanding heart” for England’s problems and difficult position.10

This ingrained bias of the American political class and social elite was galvanized by British propaganda. On August 5, 1914, the Royal Navy cut the cables linking the United States and Germany. Now news for America had to be funneled through London, where the censors shaped and trimmed reports for the benefit of their government. Eventually, the British propaganda apparatus in the First World War became the greatest the world had seen to that time; later it was a model for the Nazi Propaganda Minster Josef Goebbels. Philip Knightley noted:

British efforts to bring the United States into the war on the Allied side penetrated every phase of American life…. It was one of the major propaganda efforts of history, and it was conducted so well and so secretly that little about it emerged until the eve of the Second World War, and the full story is yet to be told.

Already in the first weeks of the war, stories were spread of the ghastly “atrocities” the Germans were committing in Belgium.11 But the Hun, in the view of American supporters of England’s cause, was to show his most hideous face at sea.

Excerpted from Great Wars and Great Leaders: A Libertarian Rebuttal (2010).

  • 1. Walter A. McDougall, Promised Land, Crusader State: The American Encounter with the World since 1776 (Boston/New York: Houghton Mifflin, 1997), pp. 126, 128.
  • 2. Woodrow Wilson, Congressional Government: A Study in American Politics (Gloucester, Mass.: Peter Smith, 1973 [1885]), pp. 22–23. These statements date from 1900. Wilson also assailed the Constitutional system of checks and balances as interfering with effective government, pp. 186–87.
  • 3. Arthur S. Link, Woodrow Wilson and the Progressive Era, 1910–1917 (New York: Harper and Brothers, 1954), pp. 92–106.
  • 4. Even Link, Woodrow Wilson, p. 106, stated that Wilson and his colleagues were only paying “lip service” to the principle they put forward, and were not prepared to abide by it.
  • 5. Link, Woodrow Wilson, pp. 122–28; and Michael C. Meyer and William L. Sherman, The Course of Mexican History, 5th ed. (New York: Oxford University Press, 1995), pp. 531–34.
  • 6. The Papers of Woodrow Wilson, Arthur S. Link, ed. (Princeton, N.J.: Princeton University Press, 1979), vol. 30, pp. 184–86. Wilson’s gift of self-deception was already evident. “I sometimes wonder why men even now take this flag and flaunt it. If I am respected, I do not have to demand respect,” he declared. Apparently the Tampico incident of two months earlier had vanished from his mind.
  • 7. Seymour, The Intimate Papers of Colonel House, vol. 1, pp. 6, 114.
  • 8. dward M. House, Philip Dru: Administrator. A Story of Tomorrow, 1920–1935 (New York: B. W. Huebsch, 1920 [1912]).
  • 9. Ibid., pp. 93, 130, 150, 152, and passim.
  • 10. Charles Callan Tansill, America Goes to War (Gloucester, Mass.: Peter Smith, 1963 [1938]), pp. 26–28. Cf. the comment by Peterson, Propaganda for War, p. 10: “The American aristocracy was distinctly Anglophile.”
  • 11. Philip Knightley, The First Casualty (New York: Harcourt Brace Jovanovich, 1975), pp. 82, 120–21; Peterson, Propaganda for War; John Morgan Read, Atrocity Propaganda, 1914–1919 (New Haven, Co.: Yale University Press, 1941); and the classic by Arthur Ponsonby, Falsehood in Wartime (New York: E. P. Dutton, 1928). That unflagging apologist for global interventionism, Robert H. Ferrell, in American Diplomacy: A History, 3rd ed. (New York: W. W. Norton, 1975), pp. 470–71, could find nothing to object to in the secret propaganda effort to embroil the United States in a world war. It was simply part of “the arts of peaceful persuasion,” of “Public Relations,” he claimed to believe, since “there is nothing wrong with one country representing its cause to another country.” One wonders what Ferrell would have said to a similar campaign by Nazi Germany or the Soviet Union.


Ralph Raico

Ralph Raico (1936–2016) was professor emeritus in European history at Buffalo State College and a senior fellow of the Mises Institute. He was a specialist on the history of liberty, the liberal tradition in Europe, and the relationship between war and the rise of the state. He is the author of The Place of Religion in the Liberal Philosophy of Constant, Tocqueville, and Lord Acton.

A bibliography of Ralph Raico’s work, compiled by Tyler Kubik, is found here.

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Interventionism Turns Crisis into Depression | Mises Wire

Posted by M. C. on June 29, 2021

The reason that interventionism does not work is that it misallocates more resources in the economy. More importantly, it disturbs, distorts, and destroys the corrective process whereby entrepreneurs, the price system, and the bankruptcy and foreclosure procedures do their jobs in reallocating resources and prices back into a sustainable framework.

Austrian economists have a well-developed theory that explains the boom, bubble, bust, and recovery. A good introduction to the Austrian theory of the business cycle can be found in Larry Sechrest’s article “Explaining Malinvestment and Overinvestment.” Larry wrote the article to provide a pedagogical device for economics students, but academic economists will probably be able to understand it as well.

Here we examine the case of business cycles where instead of recovery, the economy enters a prolonged economic depression or recession. The types of intervention that cause business cycles are restricted to money and credit. The types of intervention that cause depressions can be of a monetary, fiscal, or regulatory nature. Even moral suasion can contribute to the making of a depression, as was the case with Herbert Hoover.

The most effective depression-producing program would include a variety of interventions. The only necessary requirement is that the interventions help to forestall the correction process and that the interventions collectively undermine the ability of the price system and the system of profit and loss to properly reallocate resources. Austrians find that the cycle is the result of monetary intervention and that depressions emerge as the result of subsequent interventions designed to forestall the corrective processes of the bust.

Among all business cycles, few have degenerated into prolonged depressions or recessions. Most business cycles come and go so quickly that received wisdom recommends that the government do nothing except for minor adjustments to monetary and fiscal policy along with so-called “automatic stabilizers.” The exceptions to this rule include the Great Depression, the stagflation of the 1970s, Japan’s Lost Decade, and possibly the [Great Recession].

What makes the difference between the ordinary business cycle and an extraordinary depression? The one factor that is consistent in all four of the major crises is massive government intervention to address the initial economic crisis. In all four cases, the government responded not in the traditional laissez-faire manner of leaving things alone but instead with policies that attempted to reverse the economic crisis.

In the first three major depressions, governments consistently intervened in the economy and made long-term institutional changes in the economy. In the case of the stagflation of the 1970s, the government met the initial crisis with comprehensive wage and price controls and the closing of the gold window, along with a loose monetary policy, deficit spending, and bailouts. The Japanese bubble-bust was also met with intervention on a massive scale, including bailouts, zero-percent interest rates, public-works spending, and huge budget deficits. Even Paul Krugman was impressed with Japan’s efforts:

Think of it as the W.P.A. on steroids. Over the past decade Japan has used enormous public works projects as a way to create jobs and pump money into the economy. The statistics are awesome. In 1996 Japan’s public works spending, as a share of G.D.P., was more than four times that of the United States. Japan poured as much concrete as we did, though it has a little less than half our population and 4 percent of our land area. One Japanese worker in 10 was employed in the construction industry, far more than in other advanced countries. (Krugman 2001)

Unfortunately it did not work, the stagnation continued, and all that deficit spending has left Japan with a staggering national debt.

The reason that interventionism does not work is that it misallocates more resources in the economy. More importantly, it disturbs, distorts, and destroys the corrective process whereby entrepreneurs, the price system, and the bankruptcy and foreclosure procedures do their jobs in reallocating resources and prices back into a sustainable framework.

In dealing with economic crisis, one prominent weapon in the arsenal of interventionist economic policy is a loose money and credit policy. This policy has the defect of preventing, or at least stalling and distorting, the process of deflation that provides the cleansing and rebalancing effect on the economy where resources can be reallocated to more valuable and sustainable uses. Loose monetary policy also sets up expectations for a more restrictive monetary policy in the future, while its low interest rates discourage savings and future growth. Loose monetary policy in the 1970s (United States), 1990s (Japan), and today (globally) have produced no curative effect; and notice that most economists consider Paul Volcker’s restrictive monetary policy in the early 1980s a success.

Public-works spending, stimulus packages, and deficit spending are also (wrongly) considered important policies to address economic contractions. The idea is that government spending replaces declining private-sector spending in order to maintain the level of GDP.

However, it is easy to recognize that such policies also stifle the reallocation of resources that are called for in any type of correction process. Government spending is determined politically and bureaucratically, so there will inevitably be mismatches in resources in the economy. As government spends it creates relative scarcities in resources like cement and bulldozers and relative abundances in resources like golf carts and electrical engineers.

Such micromisalignments create new roadblocks on the path to economic recovery. In the short-run, such policies produce less than a dollar’s worth of bang for the buck (even if it does increase GDP by a dollar). In the longer term, this approach increases the government debt and tax burdens on the economy.

The evidence from the Great Depression, the stagflation of the 1970s, and the Japanese malaise clearly suggests that the government-spending approach has more of a debilitating than a remedial effect. In the [Great Recession], the stimulus package of $787 billion has failed by a wide margin to meet projections of the Obama administration of containing the unemployment rate at less than 8 percent.7

Bailouts are simply a hidden form of discretionary protectionism and should be the poster child for the ill effects of interventionism. Instead of allowing for entrepreneurial-driven change (restructuring, downsizing, outsourcing, takeovers, mergers, etc.), bankruptcy and foreclosure, and other forms of adjustment to take place, bailouts forestall the adjustment process, engender rent-seeking, and create a moral hazard.

In the absence of bailouts, there are myriad ways in which individuals adjust to economic downturns that are largely “unseen” by politicians and bureaucrats but are nonetheless the basic elements of the corrective process. The presence of bailouts turns the attention of entrepreneurs away from such adjustments and toward the acquisition of bailouts and other rent-seeking and nonproductive activities.

Bailouts also set a precedent and thereby create a moral hazard that destabilizes rather than stabilizes the economy. In the [Great Recession] we [saw] everything from bailouts for banks that are “too big to fail,” to the takeovers of AIG, GM, Fannie Mae, and Freddie Mac, and forbearance laws and policies that prevent foreclosure on homeowners who are delinquent on their mortgages. Many of the same effects caused by protectionist trade policies also apply to bailouts.

There is yet another negative effect from interventionist policies that is important to consider. The combination of interventionist policies, quickly conceived, implemented, and often altered, fosters an environment of “regime uncertainty.” Higgs (1997) described this concept as entrepreneurial uncertainty brought about by uncertainty regarding the future of economic policy, or simply policy that threatens entrepreneurs and investors.

You might imagine the entrepreneur who is trying to digest several policy changes being told that there is a crisis and that policy X will save him, only to learn that policy X has failed and will be replaced by policy Y, which will save the day, only to learn that policy Y has not worked but that policy Z will get the job done.

All of this confusion causes entrepreneurs to suffer from “regime uncertainty,” which in turn reduces investment and the hiring of labor. As the fog clears, entrepreneurs realize that the general economic environment has changed. New entry and profit opportunities for entrepreneurs have been reduced while at the same time economic policy is delaying the exit of firms suffering large economic losses. In other words, the price system is hampered and the economy is no longer competitive. It would be hard to disagree with Ben Powell (2009, p. 20) who characterizes the current political environment as one of “regime worsening.”

[This article is a selection from “Hoover, Bush, and Great Depressions” in the Quarterly Journal of Austrian Economics, vol. 13, no. 3, pp. 86–100 (2010).] Author:

Contact Mark Thornton

Mark Thornton is a Senior Fellow at the Mises Institute and the book review editor of the Quarterly Journal of Austrian Economics. He has authored seven books and is a frequent guest on national radio shows.

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[Essay] The Old Normal, by Andrew J. Bacevich | Harper’s Magazine

Posted by M. C. on July 8, 2020

For the United States today, the problem turns out to be similar to the one that beset the nation during the period leading up to World War II: not isolationism but overstretch, compounded by indolence. The present-day disparities between our aspirations, commitments, and capacities to act are enormous.

The core questions, submerged today as they were on the eve of U.S. entry into World War II, are these: What does freedom require? How much will it cost? And who will pay?

Why we can’t beat our addiction to war


Addressing the graduating cadets at West Point in May 1942, General George C. Marshall, then the Army chief of staff, reduced the nation’s purpose in the global war it had recently joined to a single emphatic sentence. “We are determined,” he remarked, “that before the sun sets on this terrible struggle, our flag will be recognized throughout the world as a symbol of freedom on the one hand and of overwhelming force on the other.”

At the time Marshall spoke, mere months after the Japanese attack on Pearl Harbor, U.S. forces had sustained a string of painful setbacks and had yet to win a major battle. Eventual victory over Japan and Germany seemed anything but assured. Yet Marshall was already looking beyond the immediate challenges to define what that victory, when ultimately— and, in his view, inevitably—achieved, was going to signify.

This second world war of the twentieth century, Marshall understood, was going to be immense and immensely destructive. But if vast in scope, it would be limited in duration. The sun would set; the war would end. Today no such expectation exists. Marshall’s successors have come to view armed conflict as an open-ended proposition. The alarming turn in U.S.–Iranian relations is another reminder that war has become normal for the United States.

The address at West Point was not some frothy stump speech by a hack politician. Marshall was a deliberate man who chose his words carefully. His intent was to make a specific point: the United States was fighting not to restore peace—a word notably absent from his remarks—nor merely to eliminate an isolated threat. The overarching American aim was preeminence, both ideological and military: as a consequence of the ongoing war, America was henceforth to represent freedom and power—not in any particular region or hemisphere but throughout the world. Here, conveyed with crisp military candor, was an authoritative reframing of the nation’s strategic ambitions.1

Marshall’s statement captured the essence of what was to remain America’s purpose for decades to come, until the presidential election of 2016 signaled its rejection. That year an eminently qualified candidate who embodied a notably bellicose variant of the Marshall tradition lost to an opponent who openly mocked that tradition while possessing no qualifications for high office whatsoever.

Determined to treat Donald Trump as an unfortunate but correctable aberration, the foreign-policy establishment remains intent on salvaging the tradition that Marshall inaugurated back in 1942. The effort is misguided and will likely prove futile. For anyone concerned about American statecraft in recent years, the more pressing questions are these: first, whether an establishment deeply imbued with Marshall’s maxim can even acknowledge the magnitude of the repudiation it sustained at the hands of Trump and those who voted him into office (a repudiation that is not lessened by Trump’s failure to meet his promises to those voters); and second, whether this establishment can muster the imagination to devise an alternative tradition better suited to existing conditions while commanding the support of the American people. On neither score does the outlook appear promising.

General George C. Marshall at the headquarters of the War Department, 1943 © Bettmann/Getty Images

General Marshall delivered his remarks at West Point in a singular context. Marshall gingerly referred to a “nationwide debate” that was complicating his efforts to raise what he called “a great citizen-army.” The debate was the controversy over whether the United States should intervene in the ongoing European war. To proponents of intervention, the issue at hand during the period of 1939 to 1941 was the need to confront the evil of Nazism. Opponents of intervention argued in the terms of a quite different question: whether or not to resume an expansionist project dating from the founding of the Republic. This dispute and its apparent resolution, misunderstood and misconstrued at the time, have been sources of confusion ever since.

Even today, most Americans are only dimly aware of the scope—one might even say the grandeur—of our expansionist project, which stands alongside racial oppression as an abiding theme of the American story. As far back as the 1780s, the Northwest Ordinances, which created the mechanism to incorporate the present-day Midwest into the Union, had made it clear that the United States had no intention of confining its reach to the territory encompassed within the boundaries of the original thirteen states. And while nineteenth-century presidents did not adhere to a consistent grand plan, they did pursue a de facto strategy of opportunistic expansion. Although the United States encountered resistance during the course of this remarkable ascent, virtually all of it was defeated. With the notable exception of the failed attempt to annex Canada during the War of 1812, expansionist efforts succeeded spectacularly and at a remarkably modest cost to the nation. By midcentury, the United States stretched from sea to shining sea.

Generations of Americans chose to enshrine this story of westward expansion as a heroic tale of advancing liberty, democracy, and civilization. Although that story certainly did include heroism, it also featured brute force, crafty maneuvering, and a knack for striking a bargain when the occasion presented itself.

In the popular imagination, the narrative of “how the West was won” to which I was introduced as a youngster has today lost much of its moral luster. Yet the country’s belated pangs of conscience have not induced any inclination to reapportion the spoils. While the idea of offering reparations to the offspring of former slaves may receive polite attention, no one proposes returning Florida to Spain, Tennessee and Georgia to the Cherokees, or California to Mexico. Properties seized, finagled, extorted, or paid for with cold, hard cash remain American in perpetuity.

Battlefield memorial for a dead U.S. soldier, Normandy, France, 1944 (detail)

Back in 1899, the naturalist, historian, politician, sometime soldier, and future president Theodore Roosevelt neatly summarized the events of the century then drawing to a close: “Of course our whole national history has been one of expansion.” When T.R. uttered this truth, a fresh round of expansionism was under way, this time reaching beyond the fastness of North America into the surrounding seas and oceans. The United States was joining with Europeans in a profit-motivated intercontinental imperialism.

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David Petraeus and the Art of Staying the Same | The American Conservative

Posted by M. C. on February 28, 2020

But what was really accomplished here? Frankly, having Petraeus speak laid down some simple but important markers. He was never a man of “big ideas,” just a man with political survival instincts who always said exactly what people wanted to hear. But I think we saw his limits here.

David Petraeus hasn’t changed a bit.

There was some vexation over his invitation to speak at today’s Quincy Institute/Foreign Policy conference, considering the event, entitled, “A New Vision for America in the World” was widely seen as a coming out of sorts for the ascendent restrainers and non-interventionist movement in Washington. Quincy, having brought together the powerhouse backers of both the Koch and Soros orbits, is in a way a manifestation of this moment, and a real Left-Right alignment against the old world order.

In response to some of the negative Petraeus buzz, some suggested that his presence might indicate that he is “coming around” to the new foreign policy approach, that the place to be right now is among a growing consensus against endless, expeditionary wars, and for rethinking our role in the world.

His remarks Wednesday, however, put that rosy notion to rest, quick.

In short, the “sycophant savior” believes the U.S. still needs to be deployed abroad (including Afghanistan) to control terrorism; we “almost always have to lead,” and yes, this “campaign” can be forever, as long as we are willing to spend the blood and treasure to sustain it.

And he really, really doesn’t like the word “interventionism.”

“Are we ‘intervening’ by having 30,000 troops in Korea? What do you mean by intervention?” he quipped to Jonathan Tepperman, editor of Foreign Policy, who had gently raised the idea that the American public was ripe for new non-interventionist approaches. It was Petraeus’s first flash of real personality in the 30-minute exchange, but it came off a bit testy. He ticked off a few other “endless” (and ultimately positive) U.S. occupations, including Germany and Japan. The usual jive, and a non-starter with this crowd—they’d heard that tune before.

Plus, wasn’t this supposed to be about a “new vision for America in the world”? The problem with Petraeus, a former general and CIA director who spent years around yes-men and failed up into a lucrative consulting career for the military industrial complex, is that he hasn’t had to be “new” at anything. Like Wednesday, he sprinkles a few anecdotes about being “downrange” in the last six years of his military career, and how “nobody wants to end endless wars more than those who have been fighting endless wars,” before offering assessments and solutions that are barely distinguishable from what he has prescribed for audiences over the last decade. More importantly, there is no sense of enlightenment or growth. Just a stubborn adherence to the status quo.

His “big ideas” amount to the same old dogma. If we leave Afghanistan it will create a haven for terrorists. Like Iraq. Then we’ll have to do something about it. “The problems just don’t go away.”

“Generally the U.S. has to lead,” he said, because we spend more and have superior capability than anyone else in the world. He talked about global drone surveillance, like a paternalistic watchman in the sky. “Having said that, we have to have allies, coalitions… And we want Muslim coalitions. This is a fight for the heart of the Muslim world, this is an existential struggle.”

And, “you cannot counter terrorists with just counterterrorism operations.” There has to be a “comprehensive civilian-military campaign,” although “host nations” will be doing all the fighting and negotiating. In other words, we’ll continue to put our troops and contractors in vulnerable positions in places where really angry people want to kill us, begetting more angry people who want to kill us the longer we have a presence there, while pouring all of our resources down an interminable black hole. But if we don’t lose a lot of guys and no one feels the pinch in the pocketbook, “then people will regard it like the long commitment we’ve had in Korea.”

Was he so elevated at the end of his career, so disconnected that he did not see the devastating toll the multiple deployments had taken on our armed forces? Does he not acknowledge the PTSD, the toxic exposures, the brain injuries? The painful family separations? Sure the military has “sustained” its tempo over the years, but at what cost to the rank-and-file?

“I was wondering when he was going to say something ‘new,’ something we haven’t heard in the last 20 years,” charged Rep. Ro Khanna, D-Calif., who spoke after Petraeus had made a beeline for the door, no time for questions from the audience. Khanna, unlike the man once referred to as “King David,” has only grown in stature as he has found common ground with other restrainers across the spectrum over the last two years. He even spoke at TAC’s foreign policy conference in 2018. And he stayed for questions.

There seems to be no other explanation for Petraeus’s presence here other than he provided a good foil for the non-interventionists who followed—Khanna, Will Ruger, Mark Perry, and others. We suppose someone thought he added a sheen to the proceedings, though there was really no opportunity for a “debate” as suggested. His appearance took place in a carefully controlled format—a “conversation” opposite a sympathetic host (Tepperman) who actually spent time afterwards “clarifying” some the ex-general’s comments for the audience (he’s a general, “not a politician”). Cue laugh track.

But what was really accomplished here? Frankly, having Petraeus speak laid down some simple but important markers. He was never a man of “big ideas,” just a man with political survival instincts who always said exactly what people wanted to hear. But I think we saw his limits here. He knew what we wanted to hear, and he couldn’t say it. It will take a very long time for someone like him to come over to our way of thinking (if ever) because his very identity, his livelihood, is tied to the old order and any new approach that would cut off lifeblood to his world is a threat.

There are countless men and women just like Petraeus in Washington. Quincy will have a hard time winning them over. And maybe that doesn’t matter, just as long as they know, at some point, that a new vision, is winning. His hasty exit today suggests that at some level, he knows that already.

UPDATE 2/27 : This Free Beacon article notes that Petraeus’s remarks drew serious fire from members of the Quincy Institute as well, and appears to confirm my own suspicions, that the ex-general was brought in by the Foreign Policy magazine partner, not Quincy.

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Brain Injuries from Interventionism – The Future of Freedom Foundation

Posted by M. C. on February 15, 2020

One thing is for certain: If those U.S. troops were not in Iraq and were
instead here at home, where they belong, they would not be suffering
from those brain injuries. They suffered those brain injuries because
they were over there occupying a foreign country, where they don’t

Notice how over 100 soldiers with brain trauma went unnoticed until someone decided an attack by Iran that produced no injuries was traumatic?

Imagine how bad the injuries would have been if there had not been several hours notice and no bunkers to hunker in?


The number of U.S. soldiers who have suffered traumatic brain injuries from the Iranian missile attack last month in Iraq has now risen to more than 100. The injuries demonstrate the sheer inanity of foreign interventionism.

The Austrian economist Ludwig von Mises pointed out that when a government intervenes in economic affairs, the intervention inevitably produces a bad result, which then requires another intervention to fix the problem. But then that intervention causes even more problems, which then necessitates more interventions. By the time the process is over, the interventions have led to a government takeover of that part of the economy, along with the destruction of liberty in the process.

While Mises was referring to economic policies, the principle he enunciated applies equally well in foreign policy. The federal government’s history with Iran is a classic example of this phenomenon. And those U.S. soldiers who suffered those brain injuries are only the latest group of soldiers who are paying the price for U.S. interventionism against Iran.

The interventionist process with Iran began in 1953, when the CIA initiated a coup in Iran that succeeded in ousting the democratically elected prime minister of the country, a man named Mohammad Mossadegh, from his position and restoring the omnipotent, unelected dictatorship of the Shah of Iran.

The purpose of the CIA’s intervention? Mossadegh had nationalized British oil interests in the country and had thrown British officials out of the country. The British Empire did not take kindly to that type of treatment. It sought the help of the CIA, which tied Mossadegh to the supposed worldwide communist conspiracy to take over the world during the Cold War.

That intervention led to another intervention. To ensure that the Iranian people could not succeed in restoring their experiment with democracy, the CIA helped the Shah to establish a domestic police force called the SAVAK, which was a combination Pentagon, CIA, NSA, and FBI. The CIA then proceeded to train SAVAK agents in the arts of torture, indefinite detention, secret surveillance, and other dark-side practices to ensure that no one could resist the oppressive tyranny of the Shah.

In 1979, the Iranian people revolted against the CIA’s dictatorship by forcibly ousting the Shah from power. Fearful that the CIA would restore the Shah to power, the revolutionaries took U.S. diplomats hostage to make sure that that wouldn’t happen.

Unfortunately, the Iranian revolution was unsuccessful in restoring its experiment with democracy that the CIA had destroyed some 26 years before. They ended up with a theocracy that turned out to be every bit as tyrannical as the regime of the Shah.

The Iranian revolution led to more U.S. interventions. One big one was when Iraq’s dictator Saddam Hussein initiated a war against Iran. The U.S. national-security establishment came to his assistance and helped him kill, injure, and maim tens of thousands of Iranian soldiers.

After Iran defeated Iraq in their 8-year war, the U.S. government turned on its old partner and ally Saddam Hussein by intervening in the Persian Gulf War in 1991. That intervention, however, failed to oust Saddam from power. That led to more interventions, such as 11 years of economic sanctions that contributed to the deaths of hundreds of thousands of Iraqi children. Other interventions included so-called no-fly zones, stationing of U.S. troops on Islamic holy lands, and unconditional support of the Israeli government.

Those interventions produced  deep anger and hatred for the United States in the Middle East, which led to anti-American terrorism, including the 1993 attack on the World Trade Center, the attack on the USS Cole, the attacks on the U.S. embassies in East Africa, the 9/11 attacks, the Fort Hood attacks, and more.

The 9/11 attacks, which U.S. officials blamed on hatred for America’s “freedom and values,”
led, not surprisingly, to even more U.S. interventionism, including the U.S. invasion and long-term occupation of Iraq, which ended up, ironically enough, with a regime that is more closely aligned with Iran than with the United States.

That intervention led to the rise of ISIS, which U.S. officials maintained was a grave threat to U.S. “national security,” even though ISIS was not threatening to invade and occupy the United States.

In the meantime, U.S. relations with Iran led to more U.S. interventions, including economic sanctions that target the Iranian populace with death and impoverishment as well as the recent assassination of an Iranian major general who was visiting Iraq with the consent of the Iraqi regime. Ironically, and less noticed but no less important, U.S. officials assassinated an Iraqi official at the same time.

The assassination of that Iranian official is what motivated Iran to fire missiles at the military base in Iraq where those U.S. soldiers were stationed.

One thing is for certain: If those U.S. troops were not in Iraq and were instead here at home, where they belong, they would not be suffering from those brain injuries. They suffered those brain injuries because they were over there occupying a foreign country, where they don’t belong. They are only the latest example of the destructive consequences of foreign interventionism.



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