Donald Trump recently gave a speech on foreign policy.  It has received a little bit of praise and a lot of criticism.  But the criticism has been coming from both ends.

The entire establishment – which is made up entirely of war hawks – has been extremely critical of Trump.  They absolutely hate him.  It is for many reasons.  He can’t be bought, and he doesn’t go along with the rigged game.  But most of all, he has dared to question the U.S. empire overseas.

Knowing that the establishment hates him this much, it should tell us that he can’t be all that bad.  At worst, he would be as bad as the establishment.

There is much debate within the libertarian community on Trump.  I have already written that I am rooting Trump on, but not endorsing him.  If he does become president, I will probably oppose most of what he does, yet remain hopeful that some sanity returns in the realm of foreign policy.

Justin Raimondo wrote about Trump’s foreign policy speech.  While there were certainly parts he didn’t care for, he was optimistic overall.

Scott Horton, whom I also respect, was interviewed by Tom Woods on Woods’ podcast.  Scott Horton absolutely blasted Trump.

Also on the anti-Trump side is Ron Paul.  You can just tell that he can’t stand Trump.  I haven’t disagreed with Ron Paul much in terms of his criticisms of Trump.  It is just that he hasn’t pointed out the positive things that Trump has said, especially when it comes to getting along with Russia and criticizing the wars.

Ron Paul may just dislike Trump because Trump squashed his son, Rand Paul, like a little bug.  Rand Paul was supposed to be the anti-establishment candidate, but he blew it.  Trump criticized the Iraq War while Rand was too busy trying to appease both sides of the fence.

Even if Rand Paul weren’t a factor, I can still see where Ron Paul would dislike Trump.  Trump has an alpha male personality.  He talks tough and he isn’t afraid to get down in the mud and throw punches.  Ron Paul is far more conservative (personality wise).  He probably doesn’t care too much for Trump’s brashness.

I don’t think we have to take a hard stand one way or the other in terms of Trump’s views on foreign policy.  He gets some things right.  He gets some things wrong.  He is unclear on some things.  He is inconsistent on many things.

The thing is, I will take Trump’s inconsistency on foreign policy.  It is better than the consistency of Ted Cruz and Hillary Clinton, who both have a proven track record of supporting war and intervention. It is their default position.  They are absolutely horrible people.  At least with Trump, there is some hope for sanity.

Trump may be exactly what this country needs to get back to a sane and non-interventionist foreign policy.  Ron Paul was consistent and principled, but he was criticized for coming across too weak.  Trump talks a tough game, while still presenting a less interventionist policy.

This is in no way a criticism of Ron Paul.  It is a criticism of the American people for not following his lead.  They couldn’t just accept a new policy that is more rational.  They need things wrapped up with a bow on them.  Trump maintains that we are tough and strong, but at the same time manages to criticize the war making.

On the other hand, I wouldn’t be completely surprised if Trump won the presidency and then ended up just as bad as the most recent presidents.  It will depend a lot on his pick for running mate and who he surrounds himself with.

Most politicians running for office end up being worse than how they campaigned.  Bush ran on bringing a more humble foreign policy in 2000.  Obama ran as the peace candidate in 2008.  Once in office, the worst usually comes out in people.

This was part of Scott Horton’s point.  He thinks Trump will not do all of the good things he says, but he will follow through on all of the bad things he says.

When Rand Paul was running for Senate 6 years ago, I was told by some libertarians that he just had to say certain things to get elected.  But once he was elected, he would be a libertarian.

I then heard the same thing in 2015 when he was running for president.  He just had to say certain things to be electable.  Of course, that didn’t work out too well.  But even if Rand Paul had been elected president, his foreign policy would have been terrible.  Almost nobody is more liberty-oriented once they get into office.

So we really don’t know what a President Trump would bring.  He could be terrible.  But it is almost guaranteed that he would be no more terrible than Clinton or Cruz.  At least with Trump, there is some hope for peace.

There is this widespread myth that deflation – particularly price deflation – is bad for the economy.  It is a result of bad economics and a misunderstanding of history.

In the 19th century, there was price deflation in the United States.  Generally speaking, there was a gradual decline in prices.  There were periods where this didn’t hold true, such as the Civil War.  But this exception just helps make the case, because war is marked by inflation and a reduction in living standards, especially when the war is on your own soil.

Throughout most of the 1800s, it was generally a time of peace.  There was something of a gold and silver standard, although admittedly not pure.  It was not a purely free market in terms of money, but it was a lot closer than what we have now.

As technology improved and capital investment and savings built up, production of goods and services increased at a substantial pace.  It was really probably the greatest increase in growth in recorded history.  Since the money supply was generally stable, at least compared to now, people’s purchasing power increased.  When you have the same amount of money chasing an increasing supply of goods and services, then the prices of those goods and services fall.

The one event that causes a lot of confusion is the Great Depression.  It was the worst economy in the history of the country.  This is in relative terms.  I’m sure someone living in 1833 would have gladly traded places with someone living 1933.

That is similar to today’s story.  Our economy is bad in relative terms as compared to the 1950s, but I don’t think a lot of people would trade in their smartphones, microwave ovens, and high-speed computers for an era of the 1950s.

The Great Depression is linked with deflation.  While the central bank was not deflating the money supply, there was a widespread failure of banks.  This reversed the fractional reserve lending process.  This is the equivalent of deflating the money supply available in the economy.

Of course, it was the monetary inflation of the 1920s that was partially responsible for setting up this problem in the first place.  And again, the banking system was far from being a free system, even back then.

The problem with linking depression and deflation is that it is confusing cause and effect.  When it rains, you get wet sidewalks.  But you don’t make it stop raining by drying the sidewalks.

You don’t stop a depression by ending the deflation.

A price deflationary scenario is a necessary correction process of the previously misallocated resources.  In today’s world of the FDIC, this is especially true.  We know we are not experiencing price deflation or a lack of price inflation because of bank failures.  Most depositors are made whole, and the biggest of the banks are not allowed to fail.

A lack of price inflation today can be the result of a lack of bank lending, and to some extent this is the case.  Since 2008, much of the increase in the money supply went into excess reserves with the banks.  This new money has not multiplied through the system.  But given some semblance of a free market, there is generally a reason why banks are not lending.  It is because it is too risky or because people don’t want to borrow.

Price deflation, or a lack of price inflation, can also be the result of an increased demand for money.  I believe this is the case now in the U.S., as well as places such as Japan and Western Europe.

When there is fear in the economy, people want to save some money for a rainy day.  If they fear a job loss, or even a reduction in income, it makes sense to take on less debt and put away some money for savings.  This has a deflationary effect.  It is a reduction of velocity.  Money is changing hands less frequently, which means prices are not bid up.

But this increase in money demand is necessary.  It is an attempt to correct for past errors.  It is an attempt by market forces to reallocate resources in accordance with consumer demand.  It is generally the prior monetary inflation that caused these misallocations in the first place.

There is not general price deflation in the U.S. right now.  Anyone who pays for health insurance and shops for groceries probably knows this.  There may be some mild price deflation in some sectors, such as the computer industry.  The price deflation would likely be greater if not for the Fed’s massive monetary inflation from 2008 to 2014.

The Fed says it wants 2% price inflation, but there is nothing magical about this number.  It just means a decrease in purchasing power.  Wages will eventually adjust, but they tend to lag behind.  You will already be paying higher prices at the store before you see a wage increase, at least in most cases.  This may not be true if you are one of the lucky few who is one of the first receivers of the new money.

The U.S. economy – while seemingly better than Japan and Western Europe – needs a major correction.  This means a widespread adjustment in prices.  If the Fed were to allow it to happen, which it should, it would likely mean lower prices for most things.

While a major correction would be painful for the American people, it will be even more painful in the future if the misallocations are allowed to continue.  While a major correction would be painful in terms of short-term unemployment, it would also provide a huge relief in lowering prices, especially for those things that are considered basic needs.

If the Fed and the government did not significantly interfere, then the pain should be short term.  Once everything adjusted, it would lay the foundation for an actual recovery based on savings and investment, and not some artificial recovery based on government spending and monetary inflation.

This is what our economy needs.  Price deflation may be associated with a bad economy, but the deflation is actually part of the medicine.  This is what we need to get back on a path of sustainable growth.  The central bank and the government need to allow it to happen without trying to produce positive price inflation.

If deflation is bad, it is only because of the prior inflation from the central bank.  But the price deflation is only trying to correct the previous errors.  Don’t blame the wet sidewalk for the rain pouring down.