Ron Paul Interviews Nassim Taleb: “We'll Destroy What Needs To Be Destroyed”
Why do career bureaucrats in Washington keep pushing military interventionism and irresponsible monetary policies? Because they face zero risk from the consequences of their decisions, said Nassim Nicholas Taleb during an appearance on the Liberty Report with former Texas Congressman Dr. Ron Paul and his co-host Daniel McAdams.
The conversation focused on some of the themes from Taleb’s upcoming book, “Skin in the Game,” which will be out later this year, including how the homogenous intellectual elite who shape American foreign policy have managed to stay in power despite decades of persistently advancing foolish interventionist policies.
Taleb even offered this colorful comparison:
“Let’s imagine you have pilots who were absolutely unharmed by crashes. People are stupid enough to put them back on planes. Then they would crash a plane, kill all passenger and continue. Well, that system would lead to complete systemic destruction.”
“And that’s what we have now with our foreign policy.”
Since World War II, the U.S. has embarked on military interventions in Vietnam, Iraq, Libya, Syria that have led to hundreds of thousands of unnecessary deaths. Even President Trump, who at one point promised an “America First” foreign policy of nonintervention, instead launched 59 tomahawk missiles at Syria based on unsubstantiated intelligence reports that the Syrian Army used chemical weapons against civilians in the country’s north.
Just how homogenous is the U.S. foreign policy elite? Remember that through the end of Hillary Clinton’s tenure as Secretary of State in 2013, either a Bush or a Clinton held one of the three highest offices in the U.S. – the presidency, vice presidency or secretary of state – for eight straight terms.
Another reason why interventionist foreign policy often fails is because federal-government bureaucrats and other outsiders don’t have “skin in the game” – an entrenched interest, financial or of another sort, in the conflict – and therefore, are incapable of achieving a comprehensive understanding of the situation. That goes for both elected leaders, beauracrats, and the media.
“We have today so many people sitting in the New York Times Washington office, in an air conditioned office, who can dictate foreign policy with zero risk.”
Dr. Paul seized the opportunity to criticize the “Chickenhawks” who advocate interventionism, but avoided serving in the military during Vietnam.
“I don’t fault them for trying to avoid the war, but I fault them for advocating war,” Paul said.
Many still haven’t internalized the lesson of the 2007-2008 economic crash and how the monetary policy missteps made by former Fed Chairman Alan Greenspan helped cause the crash. As a result, throughout human history, “we’ve never had so many people transferring risk to others,” Taleb asserts.
One reason these actors have been allowed to remain in power is that it’s difficult to assign blame to individuals when you’re dealing with “macro” conflicts like the Syrian conflict that involve many different state actors. This is one reason the policy elite at the State Department – whom Taleb compared to doctors from ancient times, who inflicted more harm than healing on their patients – have managed to stay in power, while a modern-day doctor who was causing an unusual number of patient deaths would quickly be barred from practicing.
Turning the conversation toward the asset bubbles that have continued growing since the last crisis, Taleb explained how Greenspan’s discovery that he could stabilize markets by slashing interest rates has led to our current struggle with unprecedented debt creation and a belief in “perpetual wealth and perpetual growth.”
“Lowering rates in such a manner leads to distortions. If we didn’t have a Fed, we’d be better off because the price of money would be negotiated between people.”
Since the crash, the Fed, by cutting interest rates to zero and embarking on a regime of unprecedented money creation, has succeeded only in “injecting novocaine” into the financial system.
“Now we’re inheriting a situation with $20 trillion in debt and we have interest rates at zero – you can’t intervene when you need them. And the people in Washington who got us here have no skin in the game.”
The Fed’s monetary policy missteps have also helped create the unprecedented economic inequality that exists in the world today, which has bred unprecedented dissatisfaction with the status quo.
Even in France, “Marine Le Pen got a lot of votes,” a sign that her defeat wasn’t an unmitigated victory for the establishment like some in the media reported.
Whatever happens to the Federal Reserve -if it’s allowed to continue monetizing debt or not – it may not matter. Because digital currencies like bitcoin, which are quickly growing in popularity and value, could one day supplant the use of fiat currencies altogether, Taleb said.
During the last U.S. election, people showed that they aren’t “victims of the New York Times.” Moreover, Twitter has helped upend the media power structure in favor of the people and independent thought.
“Trump was elected in spite of 264 top newspapers wanting him to lose,” Taleb noted, adding that he believes the future will be “a libertarian dream.”
“We will destroy what needs to be destroyed, and build what needs to be built,” he said.