Monday, January 16, 2012

Ed Crane's Remarkable Hit Piece on Ron Paul

By Joseph T. Salerno

The Wall Street Journal published a remarkable hit piece on Ron Paul two weeks ago entitled “Why Ron Paul Matters.” It is remarkable because while purporting to be a defense of Ron Paul’s ideas, it subtly portrays Ron Paul the real candidate as unelectable while distorting or dismissing outright some of his most important positions.

The author of the article, Ed Crane, begins with a solemn expression of regret over the hoary and irrelevant newsletters of yore to “which Paul lent his name” and which contained allegedly “bigoted” and “intolerant” material. Crane concedes that the objectionable ideas expressed in the newsletters are not consistent with what he knows of Ron Paul’s current views and, moreover, that Paul “disavows supporting them.” And yet Crane makes sure that the reader knows that Paul “refuses to repudiate” his association with the “likely source” of this secular sin of intolerant speech. Crane has somehow divined that this cardinal sinner against the official State creed of political correctness is none other than Lew Rockwell—who just happens to be the leading critic of neoconservatism and of its offshoot Big Government libertarianism that Crane’s Cato Institute promotes so zealously. So by the end of the first paragraph we know exactly where all this is heading—and exactly why the neocon Wall Street Journal published it.

In case the reader does not get it, however, Crane continues to prattle on for another paragraph about these “unsavory writings.” He dredges up a recent editorial by the New York Times that absurdly claims that the newsletters will leave an indelible stain on the libertarian movement. The editorial, Crane opines, “adds to the background noise surrounding Mr. Paul’s candidacy, obscuring the real libertarian policy initiatives . . .” But Crane’s handwringing is disingenuous. For when has the Times editorial staff ever cared a whit about the fate of libertarianism? Furthermore, one has to be political naive—which Crane surely is not—to truly believe that the opinions expressed in New York Times editorials matter any longer to most American citizens not comfortably ensconced within the Beltway or Manhattan’s Upper East Side.

What is Crane’s purpose, then, in obsessing about the newsletters? His purpose is two-fold: first, to portray Ron Paul as a tainted and dubious, and ultimately unelectable, candidate; and, second, to “co-opt” Paul’s consistent and radical libertarian ideology. Crane seeks to court and bask in the increasing popular appeal of Paul’s ideology by presenting it as a disjointed series of “libertarian policy initiatives” that are palatable to the neocon Right, which still maintains a tenuous hold on the Republican Party.

Thus Crane achieves his first goal by insinuating that Ron Paul’s moral judgment is at best suspect for remaining loyal to a friend and associate whom, Crane asseverates—without a shred of hard evidence—decades ago violated the sacred canons of the American Welfare-Warfare State’s official speech code. Crane next busies himself contorting Paul’s ideology to suit his own Big Government libertarian (BGL) agenda. He describes, via school-boy bullet points so beloved by policy wonks, the four “messages” of the Paul campaign that “Americans respond to” and of which he, Crane, approves.

Three of the four points that Crane lists accurately reflect Ron Paul’s positions. And Crane does manage to take a mild swipe at “so many neoconservatives” who want the U.S. “to be the world’s policeman.” Crane here hopes to establish his credibility as an anti-interventionist. Evidently, he has finally realized that Ron Paul’s hardcore, Old Right anti-interventionist stance has struck a responsive chord with an American public seething with frustration over the seemingly endless wars in the Middle East. These U.S. military adventures have succeeded only in wasting enormous amounts of blood and treasure while transforming practically the entire Muslim world into an implacable enemy. This is somewhat inconsistent with Crane and Cato’s earlier ambivalence toward the U.S. invasion of Iraq. Although Cato formally opposed it, a staff member traveled to Iraq twice in 2004-2005 to advise the Iraqi puppet government and other U.S. approved Iraqi organizations on the virtues of constitutions, limited government, and religious tolerance. In a surreal spectacle the Cato staff member handed out pocket size copies of the U.S. constitution to a civilian populace whose city had been bombed and invaded by U.S. troops less than a year earlier. In 2005, the quarterly Cato’s Letter ( ) called for the suppression of the spreading Iraqi insurgency against the U.S. occupation, while most libertarians were clamoring for an immediate withdrawal of all U.S. troops.

The fourth bullet point labeled “Austrian economics,” however, wildly misrepresents Paul’s views while conflating Austrian economics and monetarism. Crane asserts, “Mr. Paul, like Austrian school economists, understands that we would be better off with a gold standard, competing currencies or a monetary rule than with the arbitrary and discretionary powers of our out-of-control Federal Reserve.” Now Crane carefully avoids mentioning the position and slogan that is most popularly associated with Ron Paul’s campaign: “End the Fed.” In fact all three monetary reforms that Crane attributes to Ron Paul are consistent with the continued existence of the Fed. After all, the gold standard, to its great detriment, operated under Fed control, from 1913 to 1931and from 1946 to 1971. “Competing currencies” could mean simply permitting U.S. citizens to choose to make their monetary transactions in checking deposits denominated in foreign currencies and commodities like gold and silver, while the Fed continues to operate and crank out fiat dollars. Yet Ron Paul has repeatedly and explicitly stated that he favors the abolition of the Fed and it legal monopoly of the issue of fiat dollars and the restoration of a gold standard in which the dollar is once again legally defined as a specific weight of gold. It is true that he also favors the repeal of legal tender laws and all other laws and regulations impeding American citizens from using any type of commodity or foreign currency in their monetary transactions. In this latter sense, he does support “competing currencies” as a necessary preliminary step toward, but not a permanent alternative to, abolishing the Fed and restoring a completely unregulated and private gold standard.

Furthermore, Crane’s suggestion that Ron Paul, let alone Austrian economists, ever did or would view a monetary rule as even a tiny step in the direction of monetary reform is simply ludicrous. A formal rule that would limit the Fed to issuing fiat money according to some pseudo-scientific and arbitrary criterion, e.g., the Friedmanite quantity rule, the Taylor rule, a nominal income target, etc., only serves to more deeply entrench the Fed in the American economy and disguise its inherently inflationary proclivities.

Now Ed Crane is a smart, if not a notably erudite, man who surely knows that Ron Paul does not espouse a monetary policy rule as a viable alternative to the abolition of the Fed and the return to a gold dollar.
He also knows that it is primarily monetarists and the more conservative of some of their New Keynesian offspring who advocate such policy rules and that Austrian economists favor the abolition of monetary policy altogether rather than its formalization in a rule. So why would he say otherwise? This takes us back to the fact that Crane and the Institute he presides over promote Big Government libertarianism in all areas. In the monetary area this is manifested in the roster of participants at the Cato Institute’s prestigious annual conference on monetary policy. This roster routinely includes many high profile monetarists and Fed insiders. For example, at the last two conferences alone, participants included four current or former Federal Reserve Bank presidents, three high officials of foreign central banks, and the president of the World Bank. Indeed, both Alan Greenspan and Ben Bernanke spoke at earlier Cato monetary conferences while each was a sitting Fed chairman. Additionally, a former president of the Federal Reserve Bank of St. Louis is currently listed as a senior fellow of the Cato Institute. None of this implies that central bankers or monetarists should be unwelcome at conferences run by libertarian institutes. But it surely suggests a strong motive for Crane’s gross misrepresentation of Ron Paul’s views on the Fed and monetary reform.

Crane magnanimously credits Ron Paul "for his efforts to promote these ideas and other libertarian policies," that is, those that do not conflict with Cato's BGL policy agenda. But Crane then gratuitously comments: "He'd [Paul would] be the first to admit he's not the most erudite candidate to make the case, but surely part of his appeal is his very genuine persona.". Really? Which candidate (or former candidate) has displayed greater erudition than Ron Paul in making the libertarian case for sound money, economic freedom and a noninterventionist foreign policy? BGL favorite Gary Johnson? Or maybe imploded Tea Party stars like Michele Bachman or Herman Cain? Using Miriam Webster’s definition of “erudite,” we may also ask which of any of the Republican candidates currently in the race has shown more knowledge gained from studying economics and political philosophy than Ron Paul? As an Austrian economist and long time libertarian who has heard him speak on many occasions and who has conversed with him on a few, I am deeply impressed with the breadth and depth of Ron Paul’s knowledge of the works of Mises, Hayek, Hazlitt, Rand and Rothbard. Crane would be better served by immersing himself in these works rather than obsessively perusing old newsletters. Then, maybe, he would be able to formulate “policy initiatives” founded on sound economics and a coherent libertarian ideology—and not confuse Austrian economics with monetarism.

Crane’s crypto-Paul bashing also rears its head in his denial that “Mr. Paul is always in sync with mainstream libertarians.” Here “mainstream” refers to libertarians of the BGL variety who are mainly denizens of Beltway think tanks and a few academic outposts in the hinterland. Crane excommunicates Ron Paul from “mainstream” libertarianism for his heretical positions on three issues.

First is Paul’s “seeming indifference to attempts to prevent Iran from obtaining nuclear weapons.” But Paul has stated again and again in public forums that he is against Iran obtaining nuclear weapons and, as President, would use all diplomatic means at his disposal to prevent such an outcome. For Crane then, Ron Paul’s “seeming indifference” boils down to the fact that Paul has stated without reservation that he would not abuse his executive power to launch an unconstitutional war on Iran to achieve this result. We might turn this issue around and ask Crane if his BGL “libertarian policy initiatives” include an unconstitutional invasion of Iran to pre-empt its development of nuclear weapons. We might also query Crane about his seeming indifference to his own affirmation of Paul’s anti-interventionist foreign policy earlier in the same article. I suspect Crane’s anti-interventionism only extends to the point just short of which it would bring the wrath of the neocons down upon his head.

The second issue that offends Crane’s BGL sensibilities is Paul’s “support for a constitutional amendment to deny birthright citizenship to children of illegal aliens.” Here again Crane’s ignorance, willful or otherwise, of libertarian political philosophy and ideology is his undoing. For libertarian philosophy maintains that purely political “rights” involving citizenship, voting,eligibility requirements for appointed or elective office, etc. are not absolute and inviolable rights on a par with rights to one’s person and property and to speak and worship freely and exchange with anyone of one’s choosing. Thus libertarians can certainly have legitimate disagreements over whether, under prevailing concrete circumstances, it is prudent to support the expansion,
restriction, or outright denial of certain political “rights.”

Now Ron Paul has stated publically that he is against both federal financing of building a wall on the southwestern border of the U.S. and a concerted Federal campaign to round up and deport illegal aliens already in the U.S. This seems to be at odds with his support for the constitutional amendment denying birthright citizenship to the children of illegal aliens. But this inconsistency is only superficial. For Paul’s positions on all these issues cut against an increase in the size and scope of the Federal government financed by the siphoning off of resources from the private sector. This is obvious in Paul’s opposition to the absurd plans to wall off the U.S. from Mexico and to conduct a mass deportation of illegal aliens. But it also should be evident in his support for making citizenship more restrictive. U.S. “citizenship” is the open sesame to all the goodies dispensed by the Federal government including welfare payments, Social Security benefits, unemployment insurance, Medicare and Medicaid, affirmative action programs, higher education grants, military pensions, and so on. Until the American Welfare State is dismantled, leaving peaceful and self-supporting illegal immigrants unmolested while restricting citizenship is both a prudent and a reasonable libertarian policy. The knee-jerk BGL policy of defending expansive citizenship under all circumstances is neither.

Crane’s third reason for banishing Ron Paul from mainstream libertarianism is Paul’s “opposition to the Nafta and Cafta free trade agreements.” Crane is here employing a sophomoric semantic trick to imply that Paul is against free trade because he opposed NAFTA,which stands for North American Free Trade Agreement. This is like saying that someone is against a republican form of government because he opposes the government of the Democratic People’s Republic of Korea. In fact just as the North Korean government is not in reality a republican government but a brutal and repressive dictatorship, so NAFTA is not a “free trade agreement,” as Crane claims, but in reality a managed trade agreement. As such the NAFTA treaty comprises hundreds of pages of restrictive and regulatory provisions that benefit the governments and the corporate and organized labor interests of the U.S. and other signatory countries. Ron Paul opposes NAFTA and CAFTA because he favors genuine free trade, Crane’s silly argument to the contrary notwithstanding.

Now Crane might respond that opposition to these treaties on “purist” ideological grounds ignores the fact that they are practical, incremental steps in the direction of extending free trade. But I would demur. NAFTA and CAFTA are a step backwards in practice. Unifying and incorporating restrictions and regulations on foreign trade in complex, multilateral trade agreements make them that much harder to get rid of. More important, these agreements further conceal the domestic beneficiaries of these trade barriers under an added layer of impenetrable legalistic jargon. It is better to allow tariffs and quotas to stand alone and be seen as the naked rip off of consumers by special interests that they really are.

At the conclusion of his article Crane returns to the issue of the newsletters, like a dog compulsively worrying a favorite bone. Crane quotes a paragraph from a three year-old blog written by a Cato subordinate in which libertarians are earnestly exhorted to “make it clear that the people who wrote those things are not our comrades, not part of our movement.” So there we have it. Crane himself does not trust his substantive arguments and his Big Government libertarian agenda to inspire the growing number of real libertarians leading real lives outside the Beltway to forsake Ron Paul’s “purist” libertarian ideology. Hence Crane’s desperate attempt to smear and excommunicate his opponents within the libertarian movement. But his shameful tactics only prove that Crane understands one thing for sure: Ron Paul matters—and Ed Crane does not.

Dr. Joseph T. Salerno is Professor of Economics, Lubin School of Business, Pace University, New York, New York and Academic Vice President, Ludwig von Mises Institute.


  1. They're trying their best to co-opt the movement in the likely case that Paul doesn't win Republican nomination. Very insightful piece by Salerno.

  2. A most helpful refutation, Doc. Thanks!

  3. I used to support the Cato Institute. Crane's hatchet job in the WSJ is another example of why I no longer do.


    Ron paul smacks down Foxnews over defense vs military spending tonight! Great clip and we should make it go viral so people understand the difference!