"Corruption American Style"

The point Stiglitz makes is that our system is so corrupt that judges and officials, politicians and law enforcement folks don't have to be obviously on the take. The system rewards them for going along with the program and punishes them for doing the right thing.

Fielding Candidates

Mayday US is suggesting a:

"plan to elect a reform minded Congress by 2016, please consider being a Congressional candidate yourself.

I suggest folks also consider forming groups, like my "Maryland Green Democrats" Group to find and support such candidates. Not all of us would make great congressmen, but we also need I think we need to build a support infrastructure as well because without that candidates will never get elected. We need a plank (best to base it on E. Warren or Bernie Sander's list with some additions). And sometimes we need to find candidates other than ourselves. The big problem with American Politics is the focus on "fearless leaders". We need a bench; County Officers, local government, and State officers. Even so he's right when he says:

This suggestion is not so ridiculous as you may think.

What we can do is:

"Internet Volunteer Activity"
"General Exception"
"An uncompensated individual or group of uncompensated individuals may engage in certain voluntary Internet activities for the purpose of influencing a federal election without restriction. These exempted Internet activities would not result in a contribution or an expenditure under the Act and would not trigger any registration or reporting requirements with the FEC. This exemption applies to individuals acting with or without the knowledge or consent of a campaign or a political party committee. 100.94 and 100.155. Exempted Internet activities include, but are not limited to, sending or forwarding electronic mail, providing a hyperlink to a website, creating, maintaining or hosting a website and paying a nominal fee for the use of a website."

We can fight for change by running an insurgency within the Democratic Party.

A Common Plank:

Note: Bolded Are Bernie Sander's plank ideas, "EW" is for Elizabeth Warren's 8 points (mapped to Bernies)

Rebuilding Our Roads [and Infrastructure]

 

EW: "Investing in roads, bridges, power grids, education and research to create good jobs in the short run and help build new opportunities over the long run

Threshold: Repair and upgrade our current Infrastructure

Create a distributed and robust networked infrastructure.

Reversing Climate Change

Creating Jobs

Protecting Unions

EW: "Supporting the right for workers to bargain together

EW: "Enforcing labor laws so workers get overtime pay and pensions that are fully funded

EW: "Giving equal pay for equal work

Raising the Wage

EW: "Raising the minimum wage so no one should work full-time and still live in poverty

Pay Equity

All Candidates must support the Lily Ledbetter fair pay act and it's enforcement, threshold=objective.

Making Trade Work for Workers

Cutting College Costs

Breaking Up Big Banks

Threshold: http://holtesthoughts.blogspot.com/2014/12/support-dodd-frank-at-minimum-or-not.html

Objective: Reorganize the Federal Reserve to be less oppressive and reforming the banking system to eliminate bank control over money supply.

Bringing Health Care to All

Ending Poverty

Threshold: EW: "Protecting Social Security, Medicare and pensions

Stopping Tax Dodging Corporations

EW: "Making sure all Americans and corporations pay a fair share to build a future for all

EW: "Having trade policies and tax codes to strengthen the American economy, raise living standards and create jobs."

 

Further Reading:

 

http://holtesthoughts.blogspot.com/2014/12/demanding-infrastructure-spending.html

http://maydaysupporters.blogspot.com/2015/04/you-be-congressional-candidate.html?showComment=1429921884434#c4797943486474255128

How the Fed Reserve was corrupted:

http://just3rdway.blogspot.com/2015/04/power-follows-property.html

Hamilton on Free Trade

Alexander Hamilton was a proponent of free trade. But what he meant by "Free Trade" and what is sold as free trade now, are two different things!

In 1795 writing as Secretary of Commer, In No. Xxvi (From The Minerva.) he writes of the difficulties presented by our treaty with Great Britain, and of the evils of monopolistic Colonial trade. But then he notes:

"Several circumstances calculated to give our trade with Asia an advantage against foreign competition, and a preference to our trade with Europe, are deserving of attention." Alexander Hamilton, The Works of Alexander Hamilton, (Federal Edition), vol. 6 [1795] [http://oll.libertyfund.org/title/1383]

He then goes on to list what made our ability to trade with foreign countries superior to that of the Colonial Powers (he mainly was referring to Britain, but he includes other countries too). The first advantage being our ability to trade directly with East Asia and not have to ship to London and then to our country anymore. And:

"Second.—The difference between the duties on Asiatic goods imported in American bottoms direct from Asia, and the duties imposed on the same goods in foreign bottoms from Asia or from Europe; being on all articles a favorable discrimination, and in the articles of teas, the duties on those imported in foreign bottoms being fifty per cent. higher than on those imported in American bottoms." Alexander Hamilton, The Works of Alexander Hamilton, (Federal Edition), vol. 6 [1795] [http://oll.libertyfund.org/title/1383]

Free Trade requires Individual not Corporate Enterprise!

For Hamilton and our sane founders, "free trade" didn't mean freedom from duties or the freedom for Giant Foreign Conglomerates to corner our markets. It meant the right to individual enterprise. And his third reason why we had the advantage is telling on this:

"Third.—The European intercourse with Asia is, in most cases, conducted by corporations or exclusive companies, and all experience has proved that in every species of business (that of banking and a few analogous employments excepted), in conducting of which a competition shall exist between individuals and corporations, the superior economy, enterprise, zeal, and perseverance of the former will make them an overmatch for the latter; and that while individuals acquire riches, corporations engaged in the same business often sink their capital and become bankrupt." Alexander Hamilton, The Works of Alexander Hamilton, (Federal Edition), vol. 6 [1795] [http://oll.libertyfund.org/title/1383]

Note, free enterprise doesn't mean treating "corporations as people" it means the right of individuals to participate in markets. There is no free enterprise in monopolies or conglomerates. The Freedom comes from individual freedom within the context of commonwealth. I think he would be aghast at the degree that East India style companies have taken over our country. We've given away our freedom to conglomerates.

No Saint

Free Enterprise benefits from natural advantages from differences of climate, resources and cultural ability. Hamilton finishes his paragraph saying:

"The British East India Company are, moreover, burdened with various terms and conditions, which they are required to observe in their Asiatic trade, and which operate as so many advantages in favor of their rivals in the supply of foreign markets. The company, for example, are obliged annually to invest a large capital in the purchase of British manufactures, to be exported and sold by them in India; the loss on these investments is considerable every year, as few of the manufactures which they are obliged to purchase will sell in India for their cost and charges; besides, from the policy of protecting the home manufactures, the Company are, in a great measure, shut out from supplying India goods for the home consumption of Great Britain. Most of the goods which they import from India are re-exported with additional charges, incurred by the regulations of the Company, to foreign markets, in supplying of which we shall be their rivals, as, from the information of intelligent merchants, it is a fact that Asiatic goods, including the teas of China, are [on an average] cheaper within the United States than in Great Britain." Alexander Hamilton, The Works of Alexander Hamilton, (Federal Edition), vol. 6 [1795] [http://oll.libertyfund.org/title/1383]

He would have been happy with importing cheap manufactures from China and India, as long as they weren't competing unfairly with US manufacturers. And his fourth point was how cheap Asian Manufactures were compared to European Manufactures.

"Fourth.—The manufactures of Asia are not only cheaper here than in Europe, but in general they are cheaper than goods of equal quality of European manufacture. So long as from the cheapness of subsistence and the immense population of India (the inhabitants of the British territories alone being estimated at forty millions) the labor of a manufacturer can be procured from two to three pence sterling per day, the similar manufactures of Europe, aided with all their ingenious machinery, are likely, on a fair competition, in almost every instance, to be excluded by those of India. So apprehensive have the British Government been of endangering their home manufactures by the permission of Asiatic goods to be consumed in Great Britain, that they have imposed eighteen per cent. duties on the gross sales of all India muslins, which is equal to twenty-two per cent. on their prime cost. The duties on coarser India goods are still higher, and a long catalogue of Asiatic articles, including all stained and printed goods, is prohibited from being consumed in Great Britain." Alexander Hamilton, The Works of Alexander Hamilton, (Federal Edition), vol. 6 [1795] [http://oll.libertyfund.org/title/1383]

Hamilton described the then superiority of Indian (and Chinese) manufactures to European ones, even as late as 1795. It took concerted effort to reduce India and China to the basket cases they were under colonial oppression. What they are doing now is to regain ground they lost, not acting in some kind of vacuum.

"The British manufacturers were not satisfied even with this prohibitory system; and on the late renewal of the Company’s charter, they urged the total exclusion from British consumption of all India goods, and, moreover, proposed that the Company should be held to import annually from India a large amount of raw materials, and particularly cotton, for the supply of the British manufacturers." Alexander Hamilton, The Works of Alexander Hamilton, (Federal Edition), vol. 6 [1795] [http://oll.libertyfund.org/title/1383]

It is policy that drives poverty. Free markets mean free access to markets for individuals. Not a system where giant companies exercise monopolies.

"Those facts are noticed to show the advantages to be derived from a free access to the India market, from whence we may obtain those goods which would be extensively consumed even in the first manufacturing nations of Europe, did not the security of their manufactories require their exclusion." Alexander Hamilton, The Works of Alexander Hamilton, (Federal Edition), vol. 6 [1795] [http://oll.libertyfund.org/title/1383]

It makes you wonder how much Hamilton really was a protectionist, or if he saw the advantages of genuine free trade, meaning genuine individual enterprise. He certainly saw the risks of corporations and not protecting industry at home. But I think this article shows he knew the risk of overprotecting markets. We don't have free trade we have giant Conglomerates, more like the East India Company than what we had in 1795.

Further Reading

Alexander Hamilton, The Works of Alexander Hamilton, (Federal Edition), vol. 6 [1795] [http://oll.libertyfund.org/title/1383]

Libertarians versus Henry George and Marx

Recently, Fred E. Foldvary, a guy I respect, wrote an essay in which he tried to find points of commonality between the Libertarian movement and those Georgists he leads. In his article "Austrian Economics Explained" [http://www.progress.org/views/2015-04-12/austrian-economics-explained] The top caption states:

"Why It Matters, The Austrian School of economic thought is often misunderstood." [http://www.progress.org/views/2015-04-12/austrian-economics-explained]

...which kind of is either an understatement, or some kind of twisted humor in my mind, because to me the Austrian School has been a source of evil second only to the evil created by that other progeny of Austria...He's got a nice graphic (I'm using a link because it's too nice to merely copy:

Poor misunderstood Austrian School. I've blogged a number of times about Hayek and Von Mises. But I've pretty much left the others alone, though I've read about them and read as much of their writings, or at least summaries of their work, as I could. As usual I'm not totally done. Fred tries to explain the common threads of the Austrian School, but myself, I found that they were no more alike than any other collection of college professors or theoreticians. Still he explains their points of comparison. Rather than reprising them I'm listing and summarizing Fred's points in my own words:

1. Praxeology; They, or at least Von Mises, claimed that through "Axiomatic-deductive reasoning" they could establish "a pure universal economic theory". Von Mises called this "praxeology", I suppose to differentiate his version of the term from the one used by the Marxists (Praxis). Like Marxism the Austrian School, or at least Von Mises' subschool and it's disciples, is highly deductive. The Austrian thinkers deduced principles from elements of action and derived their theory from these.
2. "Marginal Analysis". Carl Menger developed the theory of Marginal Utility which has proven useful in price theory.
3. "Methodological individualism" is the notion that one should focus on individuals, and ignores or deprecates the collective behavior of markets as "holism"
4. Austrians argue that "capital investment does not simply add to production in a general way but rather is embodied in concrete capital items." [Hayek]
5. "Interpretive understanding:" Human behavior is too complex in their view to be subjected to social science.
6. "Subjective values: all values are subjective, based on individual beliefs, interests, and preferences."
Source: [http://www.progress.org/views/2015-04-12/austrian-economics-explained]

Fred then goes on to summarize the subjects that are most common among Austrian School Teachers:

a) entrepreneurship;

b) money and banking;

c) the time structure of capital goods;

d) the business cycle;

e) the dynamics of markets and spontaneous orders;

f) critiques of governmental intervention and planning;

g) knowledge as decentralized and unknowable to central planners.

Looking at the list one can see that the Austrian School is the anti Marxism school. If the Marxists make one set of erroneous structures and focus on the collective. The Austrian School focuses on the individual and rejects social science. Looking at their history they've been preoccupied with "refuting" Marxism for more than a century. This shows in their assumptions:

"Austrian economists tend to believe that markets work well. Austrian theory concludes that interventions as taxes, subsidies, mandates, and prohibitions, which interfere with peaceful and honest human action, reduce the productivity of economies and human well-being." [http://www.progress.org/views/2015-04-12/austrian-economics-explained]

Two sets of faulty assumptions, both erroneous, both leading to diametrically opposite conclusions. Where Marxism sees grand movements of "history" the Austrians see the efficiency of markets and the virtue of self interest. Where Keynesians, Georgists and Marxists see flaws in human virtue, they praise it. In hindsight both Marxism and the Austrians have too rosy a view of human virtue. "Honest human action" in the jaded reporting of Marx is a joke. The notion that Collective behavior can be predicted in the selfish ideology of the Austrians is equally a joke. Both are using deductive methods to try to understand the world. And both seem to ignore the test results of their theories. Later he Fred notes:

"Austrian economists have been the leading theorists of “free banking,” the replacement of central-banking controls with a free-market setting of interest rates and the money supply, an application of the Austrian critique of central planning." [http://www.progress.org/views/2015-04-12/austrian-economics-explained]

My friend Rick DeMare shares

"there are some similarities between the two systems, but so-called "free banking" should be an absolute deal-breaker for Georgists, and Georgists should not get hung up on trying to reconcile Austrian free banking with Georgism." [https://www.facebook.com/groups/CommonWealthTax/ April 13 at 7:27am]

I agree. And Rick quotes del Mar's "The Science of Money":

"When money shall be recognized in the law, when it is defined, when its volume, magnitude, dimensions, limits are set forth as precisely, fixed as unchangeably, and protected as securely from alteration, as are now the dimensions of the yard-stick, the pint-pot, and the pound-weight, then, and only then, will money perfectly resemble other measures; for then only will it become a concrete thing of known dimensions. When this comes to pass, Aristotle's definition of its function will resume its original correctness, and money will be as fit in fact, as it is now only in theory, to measure the relation called value." pg. 58" [https://www.facebook.com/groups/CommonWealthTax/ April 13 at 7:27am]

I may have more to say. But that's enough for this post. I've already talked about Faulty Assumptions.

Previous entries on Hayek and Von Mises:

Starve the Beast, Destroy Democracy: [http://holtesthoughts.blogspot.com/2012/07/starve-beast-destroy-democracy.html]

Mt. Pelarin and Milton Friedman -- fighting to make the world safe for Oligarchy since the 1940's [http://holtesthoughts.blogspot.com/2014/04/mt-pelarin-and-milton-friedman-fighting.htm]

Reading David Stockman's Deformations [http://holtesthoughts.blogspot.com/2014/09/reading-david-stockmans-deformations.html]

Holte's law applied to Rothbard [http://holtesthoughts.blogspot.com/2015/04/holtes-law-applied-to-rothbard-on-lvt.html]

Faulty Assumptions and Verification [http://holtesthoughts.blogspot.com/2013/10/faulty-assumptions-and-verification.html]

Examining Bad Economic Theories (Von Mises) [http://fraughtwithperil.com/cholte/2011/02/22/examining-bad-economic-theories/]

Sources:

http://www.progress.org/views/2015-04-12/austrian-economics-explained

More on Hayek's view: http://fee.org/freeman/detail/austrian-capital-theory-why-it-matters

The Science of Money [https://archive.org/details/sciencemoney00margoog]

Privateering and Multifarious other Swindles

Max Keiser has been documenting the subtle and not so subtle ways that British Economic Royalists steal from their citizens. I was watching this program [http://rt.com/shows/keiser-report/250677-episode-max-keiser/] and I recognized the game. I don't know if the Brits are imitating the USA or if the USA imitated the Brits, or it's just that the same international firms are driving corruption in the USA and around the world. When I was working in DC I noticed some strange things in government contracting, but it wasn't until recently that I realized that I was witnessing the perfectly legal swindles by which the 1% con the rest of us into supporting them. I suggest you listen to him describe how the Tories and Labor party swindled the British Medical System out of millions.

[http://rt.com/shows/keiser-report/250677-episode-max-keiser/]

A clever DA could probably find a way to charge these people with committing fraud, but probably not. One the DA would be arrested himself. And Two, it's not even on the radar. Keiser is showing some of the manifold ways the "monied men" take public money, entrusted to their care, give it to themselves, loan it back to the public and then pretend that they are doing the public a favor. Sadly all that is not only legal, but people who are supposed to be on our side will betray us for some "trickle down" from the fraudsters!

There is no transcript for the Keiser report so I looked up some articles to explain how "Private Finance Initiatives" work. They gave me some information such as the following:

"[W]hy did hospitals at Barking, which has had to find £50m on its private finance initiative (PFI) deal and is heading for a £50m loss, be allowed to go on despite years of red ink?" [http://www.theguardian.com/society/2012/jun/26/andrew-lansley-nhs-crackdown-product-pfi]

Essentially the British Government contracted these "Private Finance Initiatives" to build hospitals, schools and other institutions and lease them back to the Government. The Government would pay them back for their costs, including the private finance costs through these 'mortgages'. But here's the rub. If a Central Government borrows money it can borrow at very low interest (almost no interest if it uses sovereign notes) and thus it's finance costs are minimal and the investment is virtually all capital investment. But when done through private financing, the PFI's borrow at interests and those interests are built into the costs of their construction and into the eventual "mortgages" (really rent) they charge the government for having built the Hospitals, Schools, etc... This is a great deal for investors. They can create a company. Pay themselves a fee for running it. Loan it money at high interest. Pay themselves rents and "pay back" the loans, and get the General public to pick up the tab.

The reality is that the Brits aren't the only one doing this.

Privatization works by building in costs to a project, hiding those costs to the public. Pretending the costs will be lower while selling the project. Kicking back advertizing to reporters and "donations" to politicians. And thus filling pockets all over the place with taxpayer money. All the while setting the stage for the failure of the public projects and public good associated with them.

And the beauty is that all this theft can be blamed on "Socialism"

I worked in Government buildings that had private owners when I worked in DC. I saw how contracting was used to both hide and pad expenses all around me. There are other schemes besides Private Financing Initiatives. But we all should learn to beware of the power of privateers to steal from government. And beware of people working in Government preaching the evils of Government. They can only know those things from experience or intention.

The vicious and War

War attracts the virtuous.

it also attacks the vicious.

Eagles and Vultures fighting over carrion,

and gnawing the bones of fallen heros.

Indeed the corrupt are jealous of the virtuous.

The vicious find a way to fell them,

and tie them to a tree,

to eat their livers and laugh at their plight.

 

But which would you rather be?

virtuous or vicious?

Is it really worth it to be mean?

How is it noble to be so classless?

Is the brief joy of strutting on top of a pyramid

worth being sacrificed at the end of the season?

 

Our best warriors know how to wage peace.

They prefer keeping the killing to the minimum,

and avoid corrupt grease.

 

Christopher Holte

Washington's Advice still applies

Before they went insane after 9/11, some conservatives I knew used to quote Washington's Farewell Speech to me. It was a good speech. Of course they saw it as recommending no UN, complete isolationism, and no "entangling alliances." It seemed good advice to me, and the denouement of recent events recommends his word anymore. Which I suppose is why I haven't heard a conservative quoting it to me in a long time.

Good Faith and Justice

Washington's advice seems especially cogent now, in the face of the subversion, sedition and sabotage we are seeing in the Senate against efforts by the Obama administration to work with the Security Council nations to negotiate a Nuclear Arms agreement with the Iranians. Washington would have been fine with such treaties, as long as we weren't getting in bed with any particular country! He admonished that we should:

(From: http://avalon.law.yale.edu/18th_century/washing.asp)

"Observe good faith and justice towards all nations; cultivate peace and harmony with all. Religion and morality enjoin this conduct; and can it be, that good policy does not equally enjoin it - It will be worthy of a free, enlightened, and at no distant period, a great nation, to give to mankind the magnanimous and too novel example of a people always guided by an exalted justice and benevolence."

When T.R. Roosevelt negotiated the Russo-Japanese peace treaty, Franklin Delano Roosevelt created the UN, or Truman went ahead and recognized Israel, they were guided by the principle that US Foreign Policy should be magnanimous, just and that benevolence is, in the long run, more profitable than greed. I believe that Obama's negotiations with Iran are guided by a similar approach. Something that doesn't sit well with the privateers and free booters who think they own our foreign policy and see any other approach as idiocy and usurpation. Yet Washington's guidance was wise and prescient:

Paragraph Continued:

"Who can doubt that, in the course of time and things, the fruits of such a plan would richly repay any temporary advantages which might be lost by a steady adherence to it ? Can it be that Providence has not connected the permanent felicity of a nation with its virtue ? The experiment, at least, is recommended by every sentiment which ennobles human nature. Alas! is it rendered impossible by its vices?" [Washington's Farewell Address]

The root of viciousness is "vice" and our foreign policy, while occasionally following Washington's admonitions has been more often vicious, greedy, self serving and even violent. For every Portsmouth Treaty (TR's negotiation), there was a land grab or selfish intervention like that of the Panama Canal. And if we've removed tyrants, we've also installed them. And our rationale has been often, petty self interest of a minority of our officials, or of our entangled allies:

"the main beef with the Iranian Prime Minister was that, in May of 1951, he had nationalized the oil fields controlled by the Anglo Iranian Oil Company, the precursor to BP. From the perspective of Washington, though, as the newly released documents confirm, Mossadegh’s biggest sin was his flirtation with the Soviet Union, which, like Britain, had colonial ties to Iran." [http://www.newyorker.com/news/john-cassidy/the-lessons-of-classified-information-from-mossadegh-to-snowden]

And that action back in 1953 is still bearing bitter fruit. If our GOP Cons are upset that Iran might get Bombs, the Iranians still have a grudge about that coup.

Permanent Friendships or Permanent Antipathies

Washington next gave this piece of advise:

"In the execution of such a plan, nothing is more essential than that permanent, inveterate antipathies against particular nations, and passionate attachments for others, should be excluded; and that, in place of them, just and amicable feelings towards all should be cultivated."

Just and Amicable, or Exxon and Mobile

Now note, it's not enough that we should avoid too much friendship, or too much enmity, we need to cultivate "just and amicable feelings". This is what the purpose of the "League of Nations" was intended to be, and of the United Nations. That it hasn't always worked that way is because we have not cultivated justice but have violated these principles. And that excessive zeal for "special relationships" has plagued our country.

Paragraph continued....

"The nation which indulges towards another a habitual hatred or a habitual fondness is in some degree a slave. It is a slave to its animosity or to its affection, either of which is sufficient to lead it astray from its duty and its interest."

Shortly after Washington left office we started to have a "Quasi-war" with France. It was never declared, but the Federalist Faction wanted war with France and Spain while the Republican faction wanted peace. We had been too attached to the French, and already the Brits were working their diplomacy on us to reverse that attachment by recruiting ex-tories and Anglophiles. Later we would be forced to war with the Brits. Once there is a war among our neighbors, it is difficult to stay out of them. The Brits too have a motto "no permanent friends, no permanent allies", which they violate with impunity too.

Trying to play both sides.

Though it may seem to be neutral to "play both sides". I don't think Washington was talking about that kind of "neutrality." One reason for both the Quasi-War and the War of 1812 is that our merchants were smuggling arms and materiel to both sides of their conflict with each other. When we sent more goods to the Brits and the French thought they had the power to stop us, the French attacked. Later when the French lost control over the seas and we continued to sell goods to them, the Brits started attacking our ships. Washington's advice wasn't always easy to follow.

"Antipathy in one nation against another disposes each more readily to offer insult and injury, to lay hold of slight causes of umbrage, and to be haughty and intractable, when accidental or trifling occasions of dispute occur. Hence, frequent collisions, obstinate, envenomed, and bloody contests."

We had an embargo on Cuba for more than 50 years, which was useless in stopping Human Rights Violations, and mainly hurt the families of Cuban refugees who's anger drove the antipathy. And similar ill will drives the efforts of Senators to sabotage Obama's negotiations with Iran. Instead of listening to Washington.

He continues:

Power of Outside influence from "Pernicious" Forces

"The nation, prompted by ill-will and resentment, sometimes impels to war the government, contrary to the best calculations of policy. The government sometimes participates in the national propensity, and adopts through passion what reason would reject; at other times it makes the animosity of the nation subservient to projects of hostility instigated by pride, ambition, and other sinister and pernicious motives. The peace often, sometimes perhaps the liberty, of nations, has been the victim." [FA]

Not to mention the opportunism of privateers, smugglers and arms salesmen. It turns out that hostilities towards nations, peoples (or internal minorities) is profitable. Sometimes the folks pushing war have "pernicious motives" as is the case of folks like Senator Cotton who were paid by Israeli Lobbyists to try to sabotage our peace treaty with Iran. I've found evidence that the folks pushing to scuttle talks want us to be at odds because it marks up the value of their smuggling. Which is exactly what the next passage in George Washington's Speech was referring to:

"Most Favored Nation"

"So likewise, a passionate attachment of one nation for another produces a variety of evils. Sympathy for the favorite nation, facilitating the illusion of an imaginary common interest in cases where no real common interest exists, and infusing into one the enmities of the other, betrays the former into a participation in the quarrels and wars of the latter without adequate inducement or justification."

Which is exactly what has been happening with our "special relations" with France and Britain, where we were duped into supporting French interests in Vietnam or British influences in Iran, on the false fear of "communism." Our special relationships with European Countries also led to us supporting European banks in oppressing Central and South America, and latter letting the former Colonial powers try to "take back" properties they'd invaded and conquered as colonial subjects once before. Much of our fear of Communism was exaggerated fear of revolutions that were as much a reaction to colonialism and tyranny as a result of the spread of Bolshevik ideas. And this also has led to us supporting bad trade treaties like the Trans Pacific Partnership which try to overrule even our own laws:

"It leads also to concessions to the favorite nation of privileges denied to others which is apt doubly to injure the nation making the concessions; by unnecessarily parting with what ought to have been retained, and by exciting jealousy, ill-will, and a disposition to retaliate, in the parties from whom equal privileges are withheld."

A lot of our conflicts have been the result of other countries perceiving that we are in league with their enemies. Not just between countries, but even within them. When our country serves the interests of the wealthy, or of the giant multinational countries, we are creating blowback.

"And it gives to ambitious, corrupted, or deluded citizens (who devote themselves to the favorite nation), facility to betray or sacrifice the interests of their own country, without odium, sometimes even with popularity; gilding, with the appearances of a virtuous sense of obligation, a commendable deference for public opinion, or a laudable zeal for public good, the base or foolish compliances of ambition, corruption, or infatuation." [FA]

Entangling Alliances

One of our biggest problems for us started was when we let the British and French convince us to take their side in World War I, and also after World War II when we joined our intelligence services. This has led to a CIA with purported or actual factions, ever since. And it has led to some countries having legal access to our intelligence information, which gives them a massive advantage in manipulating us. The British, Australian, Canadian, New Zealand governments, for example, signed an intelligence sharing agreement with us called the 5 Eyes, which gets advertized as the agreement that makes it unnecessary for us to spy on each other. But what it has actually done was to set it up so we could form a condominium so our governments could mutually spy on our citizens without taking credit for it. This excessive friendship harms both the USA and the other four countries. Similarly our "special relationships" with Israel, Japan, South Korea and other countries, have often caused us more trouble than they've been worth. It's not that we shouldn't be friendly towards these countries but that Washington's words on too much "friendship were never more cogent:

"As avenues to foreign influence in innumerable ways, such attachments are particularly alarming to the truly enlightened and independent patriot. How many opportunities do they afford to tamper with domestic factions, to practice the arts of seduction, to mislead public opinion, to influence or awe the public councils. Such an attachment of a small or weak towards a great and powerful nation dooms the former to be the satellite of the latter." [FA]

Unity

It is fortunate that we listened to Washington during our early years -- and that we preserved our Union. The European powers at various times had designs on Texas (Prussia) California (Britain) NW (Britain/Russia) and our own South only could have won the Civil war by becoming a satellite of either France or Britain.

"Against the insidious wiles of foreign influence (I conjure you to believe me, fellow-citizens) the jealousy of a free people ought to be constantly awake, since history and experience prove that foreign influence is one of the most baneful foes of republican government. But that jealousy to be useful must be impartial; else it becomes the instrument of the very influence to be avoided, instead of a defense against it. Excessive partiality for one foreign nation and excessive dislike of another cause those whom they actuate to see danger only on one side, and serve to veil and even second the arts of influence on the other. Real patriots who may resist the intrigues of the favorite are liable to become suspected and odious, while its tools and dupes usurp the applause and confidence of the people, to surrender their interests." [FA]

Antipathy

We should be as careful in dealing with the Brits and French as we are with the Germans or the Ukrainians, and with them as we are with the Russians. And we should be careful with all of them. Not over-enthusiastic. Nor doing the "1984" equivalent of hating on the "enemy of the week." It's as much to protect us against home-based demagogues as to protect against the Foreign intrigues of a Rupert Murdoch or some other foreigner.

"The great rule of conduct for us in regard to foreign nations is in extending our commercial relations, to have with them as little political connection as possible. So far as we have already formed engagements, let them be fulfilled with perfect good faith. Here let us stop. Europe has a set of primary interests which to us have none; or a very remote relation. Hence she must be engaged in frequent controversies, the causes of which are essentially foreign to our concerns. Hence, therefore, it must be unwise in us to implicate ourselves by artificial ties in the ordinary vicissitudes of her politics, or the ordinary combinations and collisions of her friendships or enmities." [FA]

Taking this seriously, we should not be creating special Admiralty style Courts to give private separate advantage to external investments as we have been doing with our TPP negotiations and the ISDS provisions. Washington was also counselling Union. Modern seditious, subversive and centrifugal folks would disrupt our Union, but it's been our unity that has allowed us to survive:

A vision of the USA as a Powerful Neutral Force for Good

"Our detached and distant situation invites and enables us to pursue a different course. If we remain one people under an efficient government. the period is not far off when we may defy material injury from external annoyance; when we may take such an attitude as will cause the neutrality we may at any time resolve upon to be scrupulously respected; when belligerent nations, under the impossibility of making acquisitions upon us, will not lightly hazard the giving us provocation; when we may choose peace or war, as our interest, guided by justice, shall counsel." [FA]

Had we split up, our country would resemble El Salvador, Honduras, or at best Brazil; with an even more bloody history of repression and poverty. We'd still have rich people, but our industry or middle class would never have been allowed to develop. And part of the reason we've avoided such breakups is that we haven't played favorite. Even when factions wanted us too.

"Why forego the advantages of so peculiar a situation? Why quit our own to stand upon foreign ground? Why, by interweaving our destiny with that of any part of Europe, entangle our peace and prosperity in the toils of European ambition, rivalship, interest, humor or caprice?" [FA]

UN and Entangling Alliances

The key is to understand what Washington was talking about when he said the following:

"It is our true policy to steer clear of permanent alliances with any portion of the foreign world; so far, I mean, as we are now at liberty to do it; for let me not be understood as capable of patronizing infidelity to existing engagements. I hold the maxim no less applicable to public than to private affairs, that honesty is always the best policy. I repeat it, therefore, let those engagements be observed in their genuine sense. But, in my opinion, it is unnecessary and would be unwise to extend them." [FA]

In other words we need to be friendly to all, but not subject to any. I think the UN, in it's best sense might be an exception, because it isn't any "portion" and at it's best is a forum for communications, cultivating "good faith and justice, peace and harmony" towards all nations than the kind of "entanglement" he's warning about. Even so I think those who've read Washington would see he was warning even about relying too much on the UN.

"Taking care always to keep ourselves by suitable establishments on a respectable defensive posture, we may safely trust to temporary alliances for extraordinary emergencies." [FA]

We have violated this principle since the beginning of the 20th century. Mostly by going from a defensive posture to an offensive one.

"Harmony, liberal intercourse with all nations, are recommended by policy, humanity, and interest. But even our commercial policy should hold an equal and impartial hand; neither seeking nor granting exclusive favors or preferences; consulting the natural course of things; diffusing and diversifying by gentle means the streams of commerce, but forcing nothing; establishing (with powers so disposed, in order to give trade a stable course, to define the rights of our merchants, and to enable the government to support them) conventional rules of intercourse, the best that present circumstances and mutual opinion will permit, but temporary, and liable to be from time to time abandoned or varied, as experience and circumstances shall dictate; constantly keeping in view that it is folly in one nation to look for disinterested favors from another; that it must pay with a portion of its independence for whatever it may accept under that character; that, by such acceptance, it may place itself in the condition of having given equivalents for nominal favors, and yet of being reproached with ingratitude for not giving more. There can be no greater error than to expect or calculate upon real favors from nation to nation. It is an illusion, which experience must cure, which a just pride ought to discard." [FA]

Ironically our treaties with countries like China or South Korea grant them "most favored nation" status. Pretty much sticking a finger in Washington's statue's eye. And treaties like TPP pretty much ignore him.

Sources and Further Reading

Source: Wasington's Fairwell Address [http://avalon.law.yale.edu/18th_century/washing.asp]

TR & Russo-Japanese War: [https://history.state.gov/milestones/1899-1913/portsmouth-treaty]

FDR & UNhttp://globalsolutions.org/blog/2010/04/FDR-and-United-Nations-Enduring-Legacy#.VSsCWPnF9Ag

Mossadegh:

Britannica on Mossadegh: http://www.britannica.com/EBchecked/topic/393304/Mohammad-Mosaddeq

Mosaddeq's overthrow: http://www.newyorker.com/news/john-cassidy/the-lessons-of-classified-information-from-mossadegh-to-snowden

http://www.pbs.org/newshour/rundown/an-exclusive-club-the-five-countries-that-dont-spy-on-each-other/