Lew Rockwell Institute

With today, April 30, 2025, being the 50th anniversary of North Vietnam’s defeat of the United States in the Vietnam War, it is worth revisiting the role that the U.S. national-security establishment’s assassination of President Kennedy played in that war.

The story begins with the war between JFK and the U.S. national-security establishment that broke out after the Bay of Pigs disaster soon after Kennedy assumed the presidency. The CIA was hoping to manipulate Kennedy into providing air support for the operation, but the scheme failed. Realizing what the CIA had done, Kennedy vowed to “splinter the CIA into a thousand pieces and scatter it to the winds.” For it’s part, the CIA was livid over what it believed was Kennedy’s cowardice, weakness, and incompetence for failing to come to the assistance of the Cuban exiles, all of whom were killed or captured by Cuba’s communist forces while invading the island.

Afterwards, the Pentagon began pressuring Kennedy into ordering a full-scale military invasion of Cuba. That’s what the Pentagon’s infamous false-flag Operation Northwoods was all about, which Kennedy, to his everlasting credit, rejected.

Then came the Cuban Missile Crisis, which Kennedy settled by committing that the U.S. would not invade Cuba — in return for the Russians removing their nuclear missiles from the island. That meant that Cuba would remain permanently under communist control, which the Pentagon and the CIA were convinced was a grave threat to “national security.” Kennedy was, once again, considered a weak, incompetent, and cowardly president who had now placed the United States in grave jeopardy of being taken over by the Reds. A member of the Joint Chiefs of Staff compared Kennedy’s agreement with the Russians to Neville Chamberlain’s appeasement of Hitler at Munich. Another said that the deal was “the greatest defeat in our history.”

It was the Cuban Missile Crisis that caused JFK to achieve a “breakthrough,” one that enabled him to see that the national-security establishment’s “Cold War” against Russia was one great big deadly, dangerous, and destructive racket. It was at that point that Kennedy decided to bring the racket to an end.

In June 1963, Kennedy delivered his famous Peace Speech at American University. It was essentially a declaration of war against the national-security establishment. In the speech, Kennedy made it clear that America was now moving in a totally different direction — one that was based on peace and mutual cooperation with the communist world, including Russia.

Kennedy then secured the approval of the Nuclear Test Ban Treaty, over the vehement objections of the Pentagon and the CIA.

And then he ordered a withdrawal of U.S. troops from Vietnam, which, in the eyes of the national-security establishment, meant that the dominoes would start falling to the communists, with the final domino being the United States.

Given that the next presidential election wasn’t until late 1964 and given that JFK stood a good chance of winning reelection, the national-security establishment knew that it had to act now in order to save America. Kennedy’s assassination on November 22, 1963, on the streets of Dallas elevated Vice-President Lyndon Johnson to the presidency. Since Johnson was on the same page as the national-security establishment, he immediately reversed the direction that Kennedy was taking America and restored the old Cold War racket of the U.S. national-security establishment.

While the national-security establishment wanted Johnson to invade Cuba, he refused to do so. While a full-scale invasion would easily have been successful in achieving regime change in Cuba, Johnson knew that the Russians could retaliate by taking West Berlin, which necessarily would have required a U.S. response. Thus, Johnson wisely refused to succumb to the Pentagon/CIA pressure to invade Cuba.

However, reversing JFK’s order to withdraw U.S. troops from Vietnam, Johnson decided to throw an anti-communist bone to the national-security establishment by giving it the war it wanted against the Reds in Vietnam. Soon after Johnson won election in 1964, he and the national-security establishment concocted the fake North Vietnamese attack on U.S. forces in the Gulf of Tonkin. That enabled them to secure the Gulf of Tonkin Resolution from Congress, which ultimately led to the needless sacrifice of more than 58,000 American soldiers, not to mention the killing of more than a million Vietnamese.

Since Johnson died in 1973, unfortunately he didn’t get to witness U.S. officials on April 30, 1975, on the roof of the U.S. Embassy in Saigon scrambling to get on U.S. military helicopters in the hope of avoiding capture by the victorious North Vietnamese forces.

See FFF’s book JFK’s War with the National Security Establishment: Why Kennedy Was Assassinated by Douglas Horne, who served on the staff of the Assassination Records Review Board in the 1990s.

Reprinted with permission from The Future of Freedom Foundation.

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Does anybody in the hierarchy still believe that not all dogs and people go to Heaven…at least immediately?

Following the announcement of John Paul II’s death, apparently all Holy Fathers now go directly by courtesy line to “the home of the Father.” And there have already been murmurings of “santo subito” about Francis. In his funeral homily, Cardinal Re asked Francis to “bless the whole world from Heaven” (emphasis added), while Cardinal Parolin assured congregants April 27 that “Pope Francis extends his embrace from Heaven.”

Would it not be more truthful to say “X has died,” “X has gone to God,” or that “X has gone to the Judgment Seat of God?” without necessarily presaging the outcome? Hebrews 9:27 says, “it is appointed for men once to die, and after death the judgment.” It does not say, “it is appointed for men once to die and then Heaven!”

Many popes have warned about a “loss of the sense of sin.” Our current ways of speaking eschatologically arguably prove that. Yes, Scripture assures us of a loving God. It also assures us, “it is a fearful thing to fall into the hands of the living God” (Hebrews 10:31)—and not just if you are Hitler or Stalin.

When he saw God, Isaiah’s first reaction was to think himself “doomed” because of his sins, until his lips and heart are cleansed by the ember-bearing angel (Isaiah 6:1-7). Genuine sanctity does not stoke presumption. The greatest saints had the most refined sense of sin—not because they were scrupulous but because the nearer they approached being “perfect as your heavenly Father is perfect” (Matthew 5:48), the more they recognized how imperfect they were. That is the true humility of which saints are made.

I mention Isaiah because the episode of his prophetic vocation has been bowdlerized by Dan Schutte and sung with gusto Sundays at lots of Catholic parishes. Apart from the arrogance of singing in God’s name (the verses are all God speaking), the refrain selectively leaves Isaiah 6:1-7 on the cutting room floor, picking up at verse 8b: “Here I am, Lord!” In other words, “I’m ready and waiting!” omitting the sense of unworthiness before divine holiness.

Catholic eschatology recognizes that one must be “spotless and blameless” (2 Peter 3:14) to appear before the living God. We should be honest enough at least to give lip service to the confession we are all sinners (Romans 3:23). How one squares that admission with instant Beatific Vision remains unexplained.

Again, we hope all men are saved. But as we cannot be sure of that, our expressions ought not to suggest that.

We used to enumerate the “four last things always to be remembered” as death, judgment, Heaven, and Hell. It seems judgment now receives passing reflection from short-term memory, while Hell clearly succumbed to amnesia.

And there’s no doubt these issues work together. The rise in practical universalism—“we ‘hope’ (wink, wink) all men will be saved”—is not the result of enormous popularity of the thought of Hans Urs von Balthasar or Wacław Hryniewicz. It is very much the new ecclesial “party line,” one advanced not so much by promotion as by omission, what’s not said when speaking of the “Global Entry” line to the “home of the Father.”

Such approaches betray evangelization, ostensibly the mission and task of the Church in contemporary times. Jesus’ Gospel does not promise a celestial rose garden. It repeatedly warns of judgment, of separation of grain from chaff, wheat from tares, fruitful fig trees from barren ones. The Last Day is not presented as a universal victory celebration but as a time of definitive division, when some “will go to eternal punishment, but the righteous to eternal life” (Matthew 25:46). And Jesus warns against presuming we’re on the “right” side, because it is those on the left who are surprised their self-assessed goodness does not tally with the Lord’s assize.

Again, we hope all men are saved. But as we cannot be sure of that, our expressions ought not to suggest that.

We used to enumerate the “four last things always to be remembered” as death, judgment, Heaven, and Hell. It seems judgment now receives passing reflection from short-term memory, while Hell clearly succumbed to amnesia.

And there’s no doubt these issues work together. The rise in practical universalism—“we ‘hope’ (wink, wink) all men will be saved”—is not the result of enormous popularity of the thought of Hans Urs von Balthasar or Wacław Hryniewicz. It is very much the new ecclesial “party line,” one advanced not so much by promotion as by omission, what’s not said when speaking of the “Global Entry” line to the “home of the Father.”

Such approaches betray evangelization, ostensibly the mission and task of the Church in contemporary times. Jesus’ Gospel does not promise a celestial rose garden. It repeatedly warns of judgment, of separation of grain from chaff, wheat from tares, fruitful fig trees from barren ones. The Last Day is not presented as a universal victory celebration but as a time of definitive division, when some “will go to eternal punishment, but the righteous to eternal life” (Matthew 25:46). And Jesus warns against presuming we’re on the “right” side, because it is those on the left who are surprised their self-assessed goodness does not tally with the Lord’s assize.

Read the Whole Article

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[Editor’s Note: This month marks the 250th anniversary of the beginning of the American Revolutionary War at Lexington and Concord. This selection is taken from Murray Rothbard’s extensive five-volume work on the American Revolution: from Conceived in Liberty, volume 3, part 69, “The Shot Heard Round the World: The Final Conflict Begins.”]

Despite the mounting tension in the South, the main focus of potential revolutionary conflict was still Massachusetts. The British authorities, ever more attracted to a hard line, were becoming increasingly disenchanted with the timorousness and caution of General Gage, who had actually asked for heavy reinforcements when everyone knew that the scurvy Americans could be routed by a mere show of force from the superb British army. Four hundred Royal Marines and several new regiments were sent to Gage, but the king, one of the leaders of coercion sentiment, seriously considered removing Gage from command.

There were a few voices of reason in the British government, but they were not listened to. The Whiggish secretary of war, Lord Barrington, urged reliance on the cheap and efficient method of naval blockade rather than on a land war in the large expanse and forests of America. And General Edward Harvey warned of any attempt to conquer America by a land army. But the cabinet was convinced that ten thousand British regulars, assisted by American Tories, could crush any conceivable American resistance. Underlying this conviction—and consequent British eagerness to wield armed force—was a chauvinist and quasi-racist contempt for the Americans. Thus, General James Grant sneered at the “skulking peasants” who dared to resist the Crown. Major John Pitcairn, stationed at Boston, was sure that “if he drew his sword but half out of the scabbard, the whole banditti of Massachusetts Bay would flee before him.” Particularly important was the speech in Parliament of the powerful Bedfordite, the Earl of Sandwich, first lord of the Admiralty, who sneeringly asked:

Suppose the colonies do abound in men, what does that signify? They are raw, undisciplined, cowardly men. I wish instead of…fifty thousand of these brave fellows, they would produce in the field at least two hundred thousand; the more the better; the easier would be the conquest…the very sound of a cannon would carry them off…as fast as their feet could carry them.

There was another reason, it should be noted, for Sandwich’s reluctance to use the fleet rather than the army against the enemy. While the army was to dispatch the Americans, Sandwich wished to use the fleet against France, with which he hoped and expected to be soon at war.

Accordingly, the Crown sent secret orders to Gage, reaching him on April 14. The Earl of Dartmouth rebuked Gage for being too moderate. The decision had been made; since the people of New England were clearly committed to “open rebellion” and independence of Britain, maximum and decisive force must be slammed down hard upon the Americans—immediately. While reinforcements were under way, it was important for the British troops to launch a preventive strike, by moving hard before an American revolution could be organized. Therefore, Gage decided to arrest the leaders of the Massachusetts provincial congress, especially Hancock and Sam Adams. As in so many other “preventive” first strikes in history, Great Britain itself precipitated the one thing it wished most to avoid: a successful revolution. Interestingly enough, the Massachusetts radicals were at the same time rejecting hotheaded plans for a first strike by rebel forces, who would thus be throwing away the hard-forged unity of the American colonists.

Adams and Hancock were out of town and out of reach, near Concord; so Gage decided to kill two birds with one stone by sending a military expedition to Concord to seize the large stores of rebel military supplies and to arrest the radical leaders. Gage determined to send out the force secretly, to catch the Americans by surprise; that way if armed conflict broke out, the onus for initiating the fray could be laid on the Americans. Gage also used a traitor high up in radical ranks. Dr. Benjamin Church, of Boston, whom the British supplied with funds to maintain an expensive mistress, informed on the location of the supplies and the rebel leaders. (Church’s perfidy remained undetected for many more months.) Gage learned from Church, furthermore, that the provincial congress, under the prodding of the frightened Joseph Hawley, had resolved on March 30 not to fight any armed British expedition unless it should also bring artillery. By not sending out artillery, Gage figured that the Americans would not resist the expedition.1

Gage, however, immediately encountered what would prove a major difficulty in fighting a counterinsurgency war by a minority ruling army against insurgent forces backed by the vast majority of the people. He found that, surrounded by a sullen and hostile people, he could not keep any of his troop or fleet movements hidden. The rebels would quickly discover these movements and spread the news.

On April 15, the day after receiving his orders, Gage relieved his best troops of duty, gathered his boats, and on the night of April 18 shipped seven hundred under Lieutenant Colonel Francis Smith to the mainland, from which they began to march northwest to Lexington and Concord. But the Americans quickly discovered what was happening. Someone, perhaps Dr. Joseph Warren, sent Paul Revere to Lexington to warn Adams and Hancock. Hancock, emotional, wanted to join the minutemen, springing to arms; but the sober intelligence of Sam Adams reminded Hancock of his revolutionary duty as a top leader of the American forces, and they both fled to safety. Revere was soon captured, but Dr. Samuel Prescott was able to speed to Concord and bring the news that the British were coming.

As news of the British march reached the Americans, the Lexington minutemen gathered under the command of Captain John Parker. Rather absurdly, Parker drew up his handful of seventy men in open formation across the British path. When Major Pitcairn, in charge of six companies of the British advance guard, came up to confront the militia, Pitcairn brusquely ordered the Americans to lay down their arms and disperse. Parker, seeing his error, was more than willing to disperse but not to disarm. In the midst of this tense confrontation, shots rang out. No one knows who fired first; the important thing is that the British, despite Pitcairn’s orders to stop, fired far longer and more heavily than necessary, mercilessly shooting at the fleeing Americans so long as they remained within range. Eight Americans were killed in the massacre (including the brave but foolish Parker, who refused to flee), and eight wounded, whereas only one British soldier was slightly wounded. The exuberant and trigger-happy British troops cheered their victory; but the victory at Lexington would prove Pyrrhic indeed. The blood shed at Lexington made the restraining resolution of Joseph Hawley obsolete. The Revolutionary War had begun! Sam Adams, upon hearing the shooting from some distance away, at once realized that the fact of the open clash was more significant than who would win the skirmish. Aware that the showdown had at last arrived, Adams exclaimed, “Oh! What a glorious morning is this!”

The British troops marched happily on to Concord. This time the Americans did not try any foolhardy open confrontation with the British forces. Instead, an infinitely wiser strategy was employed. In the first place, part of the military stores were carried off by the Americans. Second, no resistance was offered to the British entry into Concord, thus lulling the troops into a further sense of security. While the British were destroying the remaining stores, three to four hundred militiamen gathered at the bridge into Concord and advanced upon the British rear guard. The British shot first, but were forced to retreat across the bridge, having suffered three killed and nine wounded. The despised Americans were beginning to make up for the massacre at Lexington.

Heedless of the ominous signs of the gathering storm, Colonel Smith, commanding the expedition, kept his men around Concord for hours before beginning to march back to Boston. That march was to become one of the most famous in the annals of America. Along the way, beginning a mile out of Concord, at Meriam’s Corner, the embattled and neighboring farmers and militiamen employed the tactics of guerrilla warfare to devastating effect. Knowing their home terrain intimately, these undisciplined and individualistic Americans subjected the proud British troops to a continuous withering and overpowering fire from behind trees, walls, and houses. The march back soon became a nightmare of destruction for the buoyant British; their intended victory march, a headlong flight through a gauntlet. Colonel Smith was wounded and Pitcairn unhorsed. The British were saved from decimation only by a relief brigade of twelve hundred men under Earl Percy that reached them at Lexington. Still, Americans continued to join the fray and fire at the troops, despite heavy losses imposed by British flanking parties.

Despite the British reinforcements, the Americans might have slaughtered and conquered the British force if (a) they had not suffered from shortages of ammunition, (b) the British had not swerved into Charlestown and embarked for Boston under the protecting guns of the British fleet, and (c) excessive caution had not held the Americans back from a final blow at the troops on the road to Charlestown. Even so, the deadly march back to Boston was a glorious victory, physically and psychologically, for the Americans. Of some fifteen to eighteen hundred redcoats, ninety-nine were killed and missing, and 174 wounded. The exultant Americans, who numbered about four thousand irregular individuals that day, suffered ninety-three casualties. Insofar as these individuals were led that day, it was by Dr. Joseph Warren and William Heath, appointed a general by the Massachusetts provincial congress.

Events could not have gone better for the American cause: initial aggression and massacre by the arrogant redcoats, then turned to utter rout by the aroused and angry people of Massachusetts. It was truly a tale for song and story. As Willard Wallace writes,

Even now, the significance of Lexington and Concord awakens a response in Americans that goes far beyond the details of the day or the identity of the foe. An unmilitary people, at first overrun by trained might, had eventually risen in their wrath and won a hard but splendid triumph.2

Above all, as Sam Adams was quick to realize, the stirring events of April 19, 1775, touched off a general armed conflict: the American Revolution. In the immortal lines of Emerson, penned for the fiftieth anniversary of that day:

By the rude bridge that arched the flood
Their flag to April’s breeze unfurled,
Here once the embattled farmers stood
And fired the shot heard round the world.

—

1Knollenberg, Growth of the American Revolution, pp. 182, 190.

2Willard M. Wallace, Appeal to Arms: A Military History of the American Revolution (Chicago: Quadrangle Books, 1964), p. 26.

The post Refusing to Disarm: The Battle of Lexington and Concord appeared first on LewRockwell.

Republican Reps. Thomas Massie of Kentucky and Eric Burlison of Missouri broke with their party and voted against revenge porn legislation backed by First Lady Melania Trump.

The Take It Down Act criminalizes the promulgation of non-consensual sexual imagery on the internet, including AI-generated “deepfakes.” Now, while I certainly oppose porn, revenge porn, sexual imagery, and deepfakes, it is simply not the job of the federal government to concern itself with these things. And as Massie said: “I feel this is a slippery slope, ripe for abuse, with unintended consequences.”

The bill was introduced by Texas Sen. Ted Cruz. The vote was by Unanimous Consent in the Senate so no record of individual votes was taken.

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Conservative writer David Horowitz died yesterday after a battle with cancer. He was 86.

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Andy Thomas wrote:

Vox Popoli

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Thanks, Gail Appel.

Aish.com

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Gail Appel wrote:

Spot on!

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Gail Appel wrote:

It’s a very real , long time in the making plan.

The Post-1984 Brave New World

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Thanks, John Frahm. 

Technocracy News

The post REAL ID: Ron Paul Gets Authoritarianism, Misses Technocracy appeared first on LewRockwell.

David Martin wrote:

James Forrestal, was president of Dillon, Read & Co. Inc. who later became the first Secretary of Defense under Harry Truman. He was assassinated by his enemies.

Fitts, as Burris notes, also worked for Dillon, Read. 

Book Review: The Assassination of James Forrestal by David Martin | Solari Report

Tucker Carlson – Catherine Fitts: Bankers vs. the West, Secret Underground Bases, and the Oncoming Extinction Event

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Click Here:

Eugyppius

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Thanks, Jesse Trentadue.

Headline USA

The post Judge Orders FBI to Produce 2,000 Pages of OKC Bomb Records Per Month appeared first on LewRockwell.

Thanks, John Smith. 

The Grayzone

The post “The masters of the universe are Jews,” former Senator declares in Israel appeared first on LewRockwell.

Thanks, John Smith. 

Palestine Chronicle

The post ‘Weaponizing’ Food – Over 65,000 Gaza Children Hospitalized for Malnutrition appeared first on LewRockwell.

Thanks, John Smith. 

The New Arab

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The post “Demoralize the Enemy From Within by Surprise, Terror, Sabotage, Assassination. This is the War of the Future.” Adolf Hitler appeared first on LewRockwell.

Donald Trump’s War on America’s $5.4 trillion of two-way trade with the rest of the planet is surely one of the most senseless acts of state aggression in modern times, if ever. That’s because its predicate—that America’s giant, unsustainable trade deficits are owing to unfair trade—is dead wrong.

And we do mean wrong—as in completely, unequivocally and with no if, ands or buts. Indeed, Trump thinks large trade deficits are prima facie evidence of cheating by our trading partners, yet the evidence debunks that primitive axiom with such alacrity as to literally shutdown the argument.

For instance, the Donald never stops bragging about his negotiating the USMCA in late 2018, which he claims was a vast improvement upon the existing three-way free trade arrangement between the US, Mexico and Canada known as NAFTA. In truth, of course, it was mainly a name change with some sops to the UAW and other American unions, which provided more stringent wage standards in Mexico. But the core feature—zero tariff trade between the three countries—was maintained.

Here’s the thing, however. During 2017—before the Donald’s new and improved USMCA— the US trade deficit with Mexico and Canada was -$65 billion, representing a modest 5.0% of total two-way trade of $1.298 trillion between the US and its two NAFTA partners. Self-evidently, that deficit was not caused by tariff barriers because, by definition, there weren’t any.

2017 NAFTA Trade:

• US Exports To NAFTA: $616 billion.
• US Imports From NAFTA: $681 billion.
• Trade Deficit With NAFTA: -$65 billion.
• Total Two-Way Trade: $1,298 billion.
• NAFTA deficit as % Of Two-Way Trade: 0%.

Fast forward to 2024 and you will see that the US combined deficit with Mexico and Canada has soared to $235 billion, and actually represented 14.6% of two-way trade which totaled $1.6 trillion with the two USMCA partners. So in a structural sense, the US trade deficit with its partners to the north and south significantly deteriorated.

That’s right. The Donald’s new and improved USMCA deal extended the zero-tariff approach of NAFTA and also added some additional features designed to remove so-called NTBs (nontariff barriers) by ensuring that Mexico’s labor and environmental standards didn’t give it any unfair trade advantages. In the case of wages, in fact, the USMCA’s Annex 23-A required Mexico to eliminate company controlled unions and raise wages by $4 to $6/hour by 2024.

Still, what happened on a completely level playing field over that seven year period is that US exports to the USMCA partners rose by 11% but imports soared by 35%, causing the trade deficit to expand by nearly four-fold. So either the Donald scored an own goal or this huge deficit with Mexico and Canada was caused by factors other than trade barriers and cheating partners.

2024 USMCA Trade:

• US Exports: $683 billion.
• US Imports: $919 billion.
• Trade Deficit With USMCA: –$235 billion.
• Total Two-Way Trade: $1,602 billion.
• USMCA Deficit as % of Total Trade: 6%.

What didn’t remain level, of course, was the wage gap—especially as between US and Mexican manufacturing wages. Not surprisingly, the US trade deficit with Mexico alone rose from -$63 billion in 2016 to -$172 billion in 2024.

As shown in the table below, in fact, average hourly US manufacturing wages including payroll taxes, health care, pension funding and other fringes rose from $27.50 per hour in 2016 to $37.32 per hour in 2024. In turn, the wage gap with far lower hourly pay levels in Mexico increased from $23.90 in 2016 t0 $29.91.

So there is now a $30 per hour wage difference on either side of the Rio Grande. Accordingly, the Fed should have been deflating the US economy in recent years, attempting to wring out decades of cumulative inflation that was making US industry increasingly uncompetitive in global markets. The Donald was having none of that, however, given that he spent most of his first term berating the Fed for being too tight, and then demanded that it unleash the inflationary cyclone that hit the economy after he shut it down and then pumped households full of trillions of free stuff in 2020.

As it happened, therefore, the Fed’s dunderheaded pro-inflation policies caused average fully loaded manufacturing wages in the US to rise by nearly +36% during that eight year period, albeit to hardly any advantage at all to US factory workers. When adjusted for the rise in the CPI, average 2024 manufacturing wages of $24.55 per hour in base pay plus $12.77 per hour in payroll taxes and fringe benefits or $37.32 per hour total were only 4% higher than they had been in 2016.

Fully Loaded Manufacturing Hourly Wage Table (2016–2024)

Needless to say, the USMCA story is not an aberration or exception; it’s actually the rule. Take the case of South Korea, which entered into a bilateral free trade agreement with the US in 2012 requiring the phase out of all industrial and agricultural tariffs over the next eight years. By 2020, therefore, tw0-way trade with South Korea was tariff-free with upwards of $200 billion of trade now crossing the borders of both sides without any import duties.

Yet in 2023, the US trade deficit with South Korea was huge, amounting to 27% of the total bilateral volume of imports and exports.

US/South Korea Trade In 2023:

• US Exports to South Korea: $66.6 billion.
• US Imports from South Korea: $116.0 billion.
• US Balance with Korea: -$49.4 billion.
• Trade Deficit as % of Two-Way Volume: 27.1%.

Again, the explanation for the huge US trade deficit is production costs, not tariffs or other trade barriers. During that 12 year interval fully loaded US hourly wages rose by 46%, while those for South Korea rose by nearly the same ratio, ticking higher by 45%. But it terms of dollars and cents on the cost sheet, the wage gap widened from $6.23 per hour when the South Korean free trade deal was signed in 2012 to $7.21 per hour when it became fully effective in 2020 to $9.21 per hour in 2024.

The Donald is always berating his predecessors for allegedly making bad trade deals, claiming that they have stupidly sent money and jobs abroad. Yet here is a solid free trade deal that produced one of the largest US bilateral trade deficits because all the while the Fed was inflating wages and costs in the US economy to increasingly uncompetitive levels.

Again, the Fed pro-inflation stance did precious little for the purchasing power of the workers’ paychecks. The 2024 US wage cost in inflation-adjusted dollars was up by only 3.4% from 2012 levels.

And that’s not the half of it. It turns out that nearly all of the real US labor cost gain during that period was due to payroll taxes and fringe benefit cost. The base hourly wage rate in worker pay envelopes, in fact, was $24.45 per hour in 2012 (2024 $) and $24.55 per hour in 2024. So the average US manufacturing worker gained just one thin dime per hour in real purchasing power over more than a decade!

Table: Fully Loaded Manufacturing Wage Costs (U.S. and South Korea)

To complete the story, the table below shows 2023 results for America’s Big Five Asian trading partners—China, South Korea, Taiwan, India and Vietnam— which account for the preponderant share of the America’s global trade deficit, and which bilateral balances are all heavily tilted in favor of imports.

But here’s the thing. In 2023, the average tariff on US exports to these five countries was 6.2%, while US tariffs on imports from the five averaged 10.6%, including 19.3% on goods purchased from China per the Donald first term tariffs. In dollar term, these five trading partners collected a modest $19 billion in duties from US shippers, while Washington collected $88 billion in tariffs on goods arriving from them at US ports.

In short, when it comes to monetary trade barriers Washington was the culprit, levying far more onerous duties on its partners than they levied on US exports. And yet and yet: The US trade deficit with these five leading Asian exporters was massive. The combined deficit of $522 billion in 2023 amounted to nearly 46% of the $1.143 trillion of two-way trade with these countries.

US Trade With Big Five Asian Exporters in 2023:

• US Exports: $311 billion.
• US Imports: $833 billion.
• Trade Deficit: -$522 billion.
• Total two-way volume: $1.143 trillion.
• Trade deficit % of two-way trade: 7%.

Next, consider the US trade balance with the EU-27 versus that for the UK. As it happens, tariff levels on both sides of the equation are low and essentially close enough to even for government work . In the case of the EU-27, the latter’s weighted average tariff on US exports is 2.7% while the US tariff on imports from the EU-27 is 2.0%. Likewise, the UK tariff on American exports is 3.8% versus the US average tariff of 2.0% on imports from the UK.

Then again, the trade balance outcomes are wholly dissimilar. In 2023, the US had a modest $3.3 billion surplus on combined two-way trade of $138 billion with the UK, whereas it ran a huge $221 billion deficit with the EU-27 on $931 billion of two-way trade. That is to say, when similar tariff policies are correlated with drastically opposite results on the Donald’s winners and losers scoreboard, the validity of the entire deficits-prove-unfair-trade axiom is surely called into question.

Needless to say, even when you include the EU-27 and the USMCA countries and all other significant trading partners from Brazil to Pakistan, Indonesia, Singapore and Saudi Arabia, the story is consistently the same. There are no tariff barriers to US trade that explain the massive deficits which now materialize year after year.

Below is the aggregated data for the 51 top US trading partners in 2023, which accounts for more than 90% of US global volume. But again, the average US tariff of 3.9% was considerably higher than the 2.1% average tariff levied by these 51 partners on US exports. For want of doubt, in fact, it might be noted that the US collected $112 billion in tariff revenue for these 51 nations compared to just $40 billion of duties levied on US exports to their markets.

Alas, America’s higher tariffs did not deliver a “win” on the Donald’s trade scoreboard. Far from it. The combined trade deficit with the top 51 US trading partners was a staggering $1.145 trillion!

You read that right. America’s $2.862 trillion of imports from these countries was 66% larger than its $1.717 trillion of exports to them. That is to say, the combined deficit was equal to fully 25% of two-way volume with countries that account for the preponderant share of world trade.

US Trade With Top 51 Global Trading Partners In 2023:

• US Exports:$1.717 trillion.
• US Imports: $2.862 trillion.
• Trade Balance: -$1.145 trillion.
• Total Two-Way Volume: $4.579 trillion.
• Deficit % Of Two-Way Volume: 0%.

Accordingly, tariff barriers have absolutely nothing to do with America’s giant trade deficits. And as we have indicated in previous posts, the claim that massive US deficits are actually due to non-monetary trade barriers and related cheating, or what are known as NTBs, is equally bogus. But, again, for want of doubt we went straight to the mother load of the NTB (nontariff barrier) case—-the claim that China’s red capitalists are the world champion NTB trade cheats.

To be clear, we eliminate from this analysis the whining from Wall Street and the Fortune 500 about allegedly onerous Chinese treatment of their direct investments and operations on the territory of the Red Ponzi itself. We are referring to items like forced partnerships with local Chinese companies involving technology sharing arrangements or sharp limitations on repatriation of profits.

Actually, there is a very simple answer to that complaint that does not require a global trade war or imposing hundreds of billions of tariff-taxes on domestic consumers and importers. To wit, don’t invest in China!

All of these supposedly onerous conditions for doing business in China are by no means secret or surprises after the fact. To the contrary, US companies invest in China because the think they can make money or that its serves larger global strategies.

Either way, Washington should not function as their concierge. Or, as the man famously said, capital should go where it is appreciated. And, besides, these issues have virtually nothing to do with the giant trade deficits that the Donald claims to be attempting to eliminate.

Instead, the claim is that one way or another foreign economies are rigged in favor of exports and local producers—to the detriment of US based competitors. The implication is that domestic macroeconomic policies are inherently unfair and are the real reason why expedients like the Donald’s Reciprocal Tariffs are needed to level the playing field.

In this respect, Treasury Secretary Bessent was loudly making this case during the past week. At at recent international forum he claimed effectively that China produces too much and consumes too little. That is to say, its core macroeconomic policies allegedly violate the maxim of Professor J.M Keynes that governments everywhere and always need to be stimulating consumption and spending because otherwise people will save their way into depression and poverty!

To be sure, we thought way back in 1981 that the Reagan Revolution had purged Keynes’ demand side fixation from at least the economic policy lexicon on the GOP side of the aisle. But, no, this latest wet-behind-the-ears Wall Streeter to stumble into the Treasury

Building is not missing a beat in championing the Keynesian gospel that is resident in its permanent bureaucracy.

“China’s current economic model is built on exporting its way out of its economic troubles. It’s an unsustainable model that is not only harming China, but the entire world. China needs to change. The country knows it needs to change.”

In fact, this is just plain malarkey—the same thing Ben Bernanke was peddling two decades ago when he bailed out Wall Street. It only has an air of faint plausibility because the standard national income and product accounts (NIPA) imply that China has a savings rate which dwarfs that of the US, and that somehow this communistic practice of saving too much accounts for the massive US trade deficits with China.

The real cause, of course, is the inflated production costs and wage levels in the US versus the dollar equivalent in China. As we demonstrated last week, since 1992 when Mr. Deng declared it glorious to be rich the US price level has risen by 131%. Not surprisingly, the American market soon became flooded with labor-intensive Chinese shirts, shoes, sheets, toys and furniture at first; and then electronics, iPads, iPhones and computers in an even greater flood as time went on and Chinese manufacturing moved up the value chain.

As we also indicated previously, the nominal wage gap in USD was already large in 1992, but has steadily expanded ever since. In fact, in nominal USD terms the US/China manufacturing wage gap of $16.50 per hour in 1992 has more than doubled to $34.25. The figures below for both countries were supplied by Grok 3 and include both hourly pay plus full-loaded benefits absorbed by employers.

Hourly Wages: US-China=Labor Gap:

• 1992: $16.80-$0.33=$16.50.
• 2007: $29.81-$1.36=$28.45.
• 2024: $43.46-9.35=$34.14

In short, the Fed has inflated its way into a flood of imports from China due to the $34/hour wage gap, not trade barriers or intellectual property theft or Secretary Bessent’s risible claim that 18-year old Chinese girls working their fingers to the bone in a Foxconn iPhone plant save too much!

For avoidance of doubt, we have enlisted Grok 3 in the dis-aggregation of the standard NIPA accounts for both countries. While these NIPA accounts have an inherent Keynesian bias, we have been able to separate the statistical wheat from the chaff in a way that clarifies exactly where China’s great big “savings rate” comes from, and that it has virtually no bearing on the bilateral trade deficit with the US.

The latter is a matter of the vast wage and cost gap shown above. Pure and simple. End of story.

To summarize Grok 3’s prodigious digging and sorting, we can say that 90% of the savings gap shown at the bottom of the table—savings of 6.4% of GDP for the US and 26.9% of GDP for China—is owing to factors that have virtually no bearing on trade. These include the following items in terms of basis points relative to the total 2,050 basis point difference in the aggregate savings rates of the two countries indicated at the bottom of the chart:

• Bigger US fiscal deficits: 200 basis points in favor of China because the commie government doesn’t borrow enough.
• More China central bank money printing: 550 basis points owing to the Keynesian delusion that central bank fiat credit amounts to “savings”.
• China’s current account surplus versus US deficit: 330 basis point owing to the fact that Bessent et. al. implicitly claim the cause and the effect are one and the same.
• Shadow savings in the form of illegal off-shoring of China business profits: 300 basis points owing to Chinese entrepreneurs attempting to stealthily protect their wealth from the long arm of Beijing.
• Apple Inc etc. repatriation of profits: 40 basis points of savings when Apple Inc. brings its sweatshop profits home.
• Phantom economic growth in China thru government fiddling with GDP data: 160 basis points.
• Higher errors and omissions in China NIPA accounts: 270 basis points or the equivalent of 42% of the US savings rate is attributable to the admitted errors and omissions in the China NIPA accounts.
• Subtotal, all of above items: 1,850 basis points.
• % of Total Savings Gap: 90%

In order to further debunk the myth that 18-year olds working 12 hour shifts in Apple’s Foxconn factories save too much, we also dis-aggregated the data on the household sector per se. The latter is always waived around by protectionist who suggest that Chinese workers are both underpaid and then forced to put all of their meager earnings into a saving accounts.

Actually, the household data is heavily distorted by the US Welfare State, which provides a population of 335 million about $4 trillion per year in transfer payments, ranging from social security to foods stamps and subsidized housing. This compares to just $1.7 trillion provided to a population of 1.41 billion by the Chicoms in Beijing. In per capita terms, the comparison is $12,000 in the US versus $1,200 per capita in China.

Communist China’s more impecunious approach to welfare, of course, is a matter of government policy and can hardly be said to be a sinister plot to cheat on trade with the US. But it does tend to distort the household savings statistics because transfer payment recipients in both countries tend to live hand-t0-mouth and do not have the luxury to “save”.

The same distortion results from the inclusion of “imputed rent” in the income and spending statistics. The convention is that homeowners pay rent to themselves—with the payment charged to PCE (personal consumption expenditure) and the rental income allocated to interest income of households. However, since the two figures are a wash, the implicit savings rate is zero on what amounts to $1.8 trillion of US household “income” per year. By contrast, this phantom housing expense and income in the China NIPA statistics is only $200 billion per year.

In any event to get to an apples-to-apples comparison, we took the zero savings income and expense pairs for both transfer payments and imputed housing rent out of the data. That’s because they wash to zero anyway—even though in the case of the US household income statistics these two items total $5.8 trillion of “income”, which by definition can’t be saved because it is 100% off-set by expense.

The bottom line is clear: The true comparison of the household savings rate between the US and China is 7.3% of GDP for the former versus 11.9% for the latter per the first line of the table below. That 460 basis point difference is both minor in the great scheme of a $30 trillion versus $18 trillion economy, but is readily explained by the fact capitalist America has a prodigious Welfare State and Communist China does not.

So households save modestly more in China because they know the government isn’t doing it for them with a massive social insurance Ponzi Scheme like America’s soon to be bankrupt Social Security system. And yet, Secy Bessent says that its China that is cheating?!

In short, the “excess savings” canard is just beltway bullshit. It’s the go-to excuse of protectionists, and the hoary myth invented by Bubbles Ben Bernanke himself to obfuscate the trade disaster that the Fed has brought down upon America’s industrial economy.

And now the Donald and his clueless Treasury Secretary have apparently embraced this nonsense hook, line and sinker. Then again, when the entire case for “big beautiful tariffs” is 100% bogus, it’s not surprising that its advocates have become a fount of pure humbug.

Breakdown of US Versus China Savings Rate In 2023 By Major Component:

Table Notes:

US.:

• Household savings: $2.05T (7.3%), excludes transfers ($3.99T) and imputed housing ($1.8T), aligning with cash-flow focus.
• Residual: $168B (0.6%), includes informal economy ($28B), small due to BEA transparency.

China:

• Household savings: $2.179T (11.9%), excludes transfers ($1.7T) and imputed housing ($0.2T), closer to Rhodium’s ~14% discretionary savings.
• Residual: $615B (3.3%, errors $300B, untracked $315B), reduced by $300B phantom growth bias (1.6%, GDP/investment overstatement).

Reprinted with permission from David Stockton’s Contra Corner.

The post American Capitalism’s Worst Nightmare appeared first on LewRockwell.

Governments regularly claim that they favour tax reform. When this claim has been repeated so many times that virtually no one believes them anymore, they announce a tax reform, to show that they really mean it. They then reshuffle the existing taxes to give the appearance that taxation will actually be lowered.

When it becomes apparent that the reform is a sham, they often pull a rabbit out of a hat in the form of a “temporary” tax, that’s pre-legislated to end sometime in the future.

Sounds promising.

So, let’s have a look at one such temporary tax and see how things worked out.

The US government introduced the War Revenue Act of 1898—a tax on telephone use—under the claim that it was necessary to pay for the Spanish American War.

In what way does telephone use pertain to a government invading another country? Well, actually, one has nothing to do with the other. But, let’s leave that discussion for another day and see how this temporary tax played out.

The Act was repealed in 1902 but was reinstated, this time as the Emergency Internal Revenue Tax Act of 1914. The justification then given was that another war was on the way and increased taxation to pay for it couldn’t begin too soon. Telephone users needed to cough up.

It was decided by both parties to increase the tax on telephones and the War Revenue Act of 1917 was created. It hadn’t passed the debate stage until the war was over, but they decided that they’d implement it anyway, as the work had already been done. In the bargain, they introduced not only increased rates, but graduated rates.

This act was also repealed, in 1924, but was reinstated with the Revenue Act of 1932. Since that date, it has been reauthorised 29 times.

In 1941, an increase was put in place to pay for (you guessed it) another war—World War II. This was increased again in 1943, but people complained and the new law contained a provision that the increased rates would end six months after “the date of termination of hostilities in the present war.” However, the Excise Tax Act of 1947 was passed to assure that the tax would continue indefinitely.

Over the subsequent years, periodic changes were made. Although the rates went up and down like a bride’s nightie, most, not surprisingly, were upward.

As further (undeclared) wars came and went, taxation on telephone calls repeatedly needed to be increased and, regardless of the party in power, increases continued.

At long last, on 14 September, 2000, the House of Representatives took up legislation which included the repeal of the telephone excise tax. This measure passed both houses, but the fix was in. President Clinton vetoed the repeal. (The legislative branch and the executive branch have to take turns playing the bad cop, but the outcome is the same: increased taxation.)

Then, in 2006, a case was made (in the words of the Treasury Secretary), to amend the Internal Revenue Code “of an outdated, antiquated tax that has survived a century beyond its original purpose, and by now should have been ancient history.”

Finally, American citizens could wash their hands of a one-hundred-year theft of their earnings that, even at the start, was based upon a ludicrous concept.

Unfortunately… it didn’t happen.

The repeal was never enacted and Americans continue to pay for the Spanish American War today.

So, what’s the takeaway here?

Well, first off, this little history serves as a reminder that there’s nothing so permanent as a temporary government measure.

Second, although not a month goes by without one politician or another, from one party or the other, rising up in righteous indignation that a new tax or an expanded tax is absolutely necessary to continue the welfare of the American people, there is, in truth, no sincerity in their claim. They simply want more money.

Third, no amount of money is ever enough. Even if Washington, D.C., is the only part of the US that is enjoying prosperity, even if no congressman leaves office without more zeroes behind his net worth than when he went in, virtually every legislator will vote for increases in taxation.

And, fourth, there’s no such thing as tax reform. From time to time, legislators will need to trot out the idea of tax reform, and be seen to be arguing over the details, but will ultimately always do the same: the deck will be reshuffled, but somehow, taxes will rise once again.

But the overall lesson to be learned is that Government is, and has always been, a shell game. Its purpose is not to serve the electorate; it is to separate them from the fruits of their labours.

Full stop.

As former US Chief Justice John Marshall stated,

The power to tax involves the power to destroy.

More recently, Ron Holland offered the following:

Since the beginning of recorded history, the business of government has been wealth confiscation.

However, both these individuals were conservatives, and it would only be fair to ask for commentary from the liberal side. One such liberal political leader is none other than Vladimir Lenin, who stated,

The way to crush the bourgeoisie is to grind them between the millstones of taxation and inflation.

Of course, the reader may wish to consider relocating to a jurisdiction where the taxation is far lower, but if he chooses to remain in the US, EU, Canada, or other jurisdiction where the tax level is already oppressive, his plans should include temporary taxes that are unlikely to end in his lifetime.

Reprinted with permission from International Man.

The post The Endlessness of a Temporary Tax appeared first on LewRockwell.