Friday, December 30, 2011
One should not, however, downplay the significance of Ron Paul's emergence as a top tier candidate even if he ultimately falls short in Iowa. Paul's emphasis on a non-interventionist foreign policy and his insistence that the Empire, which is an integral part of the State, is not sacrosanct and can therefore be cut, are not standard fare in Republican debates. In point of fact, for all that the Republicans insist that the Democrats are soft on terror, there is a bipartisan consensus in favor of war and defense spending.
These views are important, so we'll examine in them in some detail. Non-interventionists, as opposed to outright isolationists, insist that while there are criteria under which a nation may go to war, i.e. when that nation has been attacked, wars of aggression are immoral. They are also costly, in terms of both blood and money. The United States spends more money on "defense" than all other countries in the world combined. Our wars also produce what our CIA calls blowback: reciprocal responses to our policies. These responses harm our country, but they also have a tendency to provoke us into war, thereby setting us up for more blowback.
This message is resonating with a significant percentage of the electorate. The media, especially the Fox News crowd, refuses to consider the argument. Always on the lookout for prospective Hitlers to bomb, they insist that Paul's policies are bad for the country. Unfortunately, there's no evidence that this is the case. While GOP chicken hawks are eager to continue fighting the wars forever, and start new ones, too, the soldiers who fight the wars are proving reluctant to die for our Empire. For this reason, Paul has more contributions from military personal than do all the other Republican candidates combined.
From this policy stems Paul's insistence that the Empire--our soldiers in foreign countries, and the money to support this network of bases--be liquidated. Not only does it cost an enormous amount of money at a time when the nation is essentially broke, but it actually makes us less safe. Bush argued that the Iraqis and the Afghanis would welcome us with open arms. Instead, we found that civilians did not like being bombed, and that our policies made us less safe by creating enemies faster than we could kill them.
The criticism of Paul has everything to do with his foreign policy views. Republicans are so wedded to the warfare State that they cannot abide anyone who is insufficiently ready to spill the blood of others. Democrats meanwhile, don't particularly care about the war, as long as their President passes some sort of legislation to give more free things to regular people. That wars funded through inflation make all of us--except for the defense contractors--poorer, is not something we're supposed to notice. That's another strike on Paul, who keeps pointing that out.
Paul's rise, and corresponding witch hunt by media, left and right alike, has altered the political landscape. Conservatives and libertarians are noticing the way Paul is being treated. The same party that regularly touts pro-choice, anti-gun, big spending moderates, has shamefully accosted a long time Congressman with impeccable fiscal credentials for the heresy of questioning our foreign policy. This group may be, and indeed, probably is, too small to tilt the election to Paul, but they are not going to line up to vote for Romney after the way their candidate has been treated.
I suspect that this rift will cost Romney the election. The GOP elites will blame Paul and his people, but there is no rational reason why any conservative or libertarian would vote for a man who has shared almost every view of our current President; that he has absconded some of those views now that he is seeking the Republican nomination does him no good. He is a spineless weasel. That the elites prefer him to Paul tells one all one needs to know about the state of the party.
I will not even hazard a guess as to what may happen next, but I would not be surprised if this turns out to be the last election in which a Republican candidate runs for President. If Paul kills the soulless squid that is the GOP, he will have done this country a tremendous service.
Friday, December 23, 2011
The best lack all conviction, while the worst
Are full of passionate intensity.
Now, doesn't that almost perfectly describe Mitt Romney and Newt Gingrich? For while the former would make a dreadful president, he is at least a good man, whereas the latter fails on both accounts.
Tuesday, December 20, 2011
We'll examine some samples:
Paul poses an existential threat to the state’s cherished kick-off status, say these Republicans, because he has little chance to win the GOP nomination and would offer the best evidence yet that the caucuses reward candidates who are unrepresentative of the broader party.
We're seeing this notion--that Paul will not be able to obtain the GOP nomination--more frequently. Yet the whole point of the caucuses and primaries is to determine who the people prefer since our system is supposed to be, you know, democratic. We could tweak things a bit if we've like, but essentially the only way we can determine if a candidate has support is to have the citizens vote. After January 3rd, we'll know whom Iowans prefer, and we'll go from there.
What especially worries Iowa Republican regulars is the possibility that Paul could win here on January 3rd with the help of Democrats and independents who change their registration to support the libertarian-leaning Texas congressman but then don’t support the GOP nominee next November.
Translation: what worries Republicans is that Ron Paul puts loyalty to his principles and his country ahead of loyalty towards the party. Unsurprisingly, this is a large aspect of his appeal. Republicans can bemoan his reluctance to bomb Iran all they like; it is precisely this position, held firmly when revoking it would be politically expedient, that attracts independents and Democrats.
There is no indication that these same groups wouldn't vote for Paul against Obama if he were to obtain the GOP nomination. In regards to foreign policy and civil liberties, Obama has been little better than Bush--though one wouldn't know it from listening to the right. This has hurt him with his base, who would be reluctant to vote for another Republican warmonger, but would be receptive to vote for Paul.
“People are going to look at who comes in second and who comes in third,” said Gov. Terry Branstad. “If [Mitt] Romney comes in a strong second, it definitely helps him going into New Hampshire and the other states.”
Romney is the establishment candidate this time around. He has loads of money, not from individual contributors, but from large corporations and banks, who know that Romney can be counted on to ensure that no substantial change occurs. The not so subtle message here is: Romney will be the nominee, so get in line and vote for him.
“Everybody has the perception that there’s absolutely no way [Paul] can win the nomination, whereas a Mike Huckabee coming out of nowhere at the end to pull out a victory here – he was a serious contender,” said Lamberti. “That’s the distinction that has the potential to do real damage to Iowa.”
Notice the double standard here. If Iowa is worried about discrediting the caucus system, they shouldn't bring up Huckabee, who turned out to be unelectable. Of course, no one knew much about Huckabee, whereas "everybody" knows that "there's absolutely no way [Paul] can win the nomination" so you can see how it's actually different. I'm familiar with the argumentum ad populum logical fallacy, but this is more absurd still. If I say that everybody knows that Lamberti is an obnoxious blowhard, I'm not telling the truth, but we have at least one example to lead us towards that conclusion.
“What has me concerned is that on Main Street Iowa people are coming up to me and saying, ‘What do you think about Dr. Paul?’” said Cable. “These are folks who have to be informed. They have to get past the 30 and 60 second ads. If you ask Iowans if they’re for legalizing marijuana or legalizing heroin, they’d say no. But Dr. Paul has said on many occasions that that’s ok. But people don’t all know that.”
This is probably my favorite part of the piece. Paul has consistently voiced his opinion on every issue about which he was asked a question during the debates. Granted, the Republicans were busy ignoring the "unelectable" candidates, so part of the ignorance is the fault of the establishment which is now doing everything in their power to downplay Paul's success.
Cable argues that the only reason people could be attracted to Paul is that they do not understand his views. This underestimates the number of people who are attracted to the entire program, along with those who, quibbles aside, understand that Paul stands with the people and against the ruling oligarchs on issues that matter.
But even when this isn't the case, he threatens the bifactional ruling party by widening the realm of acceptable discourse. The people are supposed to choose between Candidate A, who is prone to war and bailing out banks, and Candidate B, who is prone to bailing out banks and going to war.
The drug issue is a case in point. Not only are we supposed to support the War on Drugs, we're not supposed to mention it at all. So what if our policies haven't done anything to alleviate the drug problem? Who cares if inner-cities are uninhabitable and overrun with drugs? Why does it matter that hundreds of thousands of Americans have been incarcerated for non-violent crimes? The establishment tells us which questions we are allowed to ask, because this ensures we'll also come up with the right answers. These questions are not on the list.
Something very big is happening in this country right now. The extent of the corruption of the political system is coming to light If Paul wins Iowa, the establishment will have to decide if they will tolerate democracy, or if they will continue to smear the people's candidate--which will only make the corruption that much more apparent.
Thursday, December 15, 2011
This time around, they tried to ignore him again. But suddenly Paul is second in Iowa. We are told that everyone knows that he isn't going to win the nomination. But how do we know this? Can Republicans predict the future? If so, they shouldn't have nominated McCain. He lost.
Anyway, the smear brigade is out in full force against Paul. Hannity came out against him yesterday, and today Rush Limbaugh took up the cry: anyone but Obama--except for Paul. Here's a selection of the transcript from his show:
The Tea Party wants that government cut down to size and they want it to happen in a big step. And Ron Paul's giving them meat. But they're not hearing much about his foreign policy. So his support actually could be widespread throughout Republican primary voters. We don't know. But Ron Paul has said things, for example, make you think that he believes 9/11 was an inside job, Ron Paul. He hasn't said it word-for-word, but the only conclusion you can draw when you listen to him talk about his theories on it...
We covered this yesterday. Ron Paul does not believe 9/11 was an inside job. What he has said is in agreement with the 9/11 Commission Report: that our policies precipitated blowback in the Middle East. This is not to say that the terrorists are not responsible for the attacks, only that our policies made such an attack more likely. Rush would like it if his listeners kept their heads in the sand: the terrorists are irrational, so anything we do to appease them will not be enough, they will attack us anyway. Yet it should be obvious that invading and occupying someone's homeland won't cause those people to think too kindly of the United States. We really shouldn't have to revisit this argument every time we discuss 9/11, but apparently it is still necessary to do so.
No question about it. Ron Paul said -- I don't know if it was the last debate or in a town hall somewhere, but it was recently, Ron Paul said that the White House celebrated when 9/11 happened because that was their ticket to go into Iraq.
Here's the clip to which Rush is referring. Now, the point Paul was making should be fairly obvious. Just as the Obama administration used the economic crisis to effect policy changes on the domestic front, the Bush administration used 9/11 as a pretext to invade Iraq. This does not mean that Bush was happy that Americans died on 9/11, anymore than it means that Obama was glad that millions of Americans became poorer during the recession. It simply means that both knew that one should never let a crisis go to waste.
We know for a fact that an Iraq invasion was being planned prior to 9/11. It is doubtful whether Americans would have been whisked to war were it not for lies about WMDs and Saddam's connection with Al-Qaeda. Paul's point, then, is sound. And Limbaugh is playing the demagogue.
UPDATE: Rush was on Greta's show last night. The transcript is available here.
He mentions Ron Paul, only to say: "But I think right now anybody other than Ron Paul could beat Obama if the election were tomorrow, easily."
Yet this is patently untrue. According to a recent poll, Paul comes the closest of any Republican candidate to beating Obama; the poll shows a dead heat. Romney trails by 7 points and Gingrich trails by 10 points. It's true that this poll only counts Iowa voters, but this is consistent with older polls which survey voters from other states. On the basis of the latest polls then, Ron Paul has the best chance to defeat Obama. Rush is ignoring the data so that he can continue to ignore the candidate who worries him the most.
Wednesday, December 14, 2011
Hannity's reasons were twofold: Ron Paul is an isolationist; and he wrote some nasty newsletters back in the 90's. The first point is easily debunked, since Paul is not an isolationist. He's a non-interventionist; he was in favor of going after Al-Qaeda after 9/11 but wisely noted that failure to declare war would lead ensure that the conflict would never end. In fact, Paul has published a book which contains his many speeches he gave while in Congress. Reading this would enlighten Hannity, and prevent him from making foolish proclamations on national radio shows.
The newsletter issue is summarized here. Essentially, Ron Paul allowed someone else to edit and publish newsletters under his name. Some of the opinions therein were racist. Hence, the argument goes, Ron Paul should be disqualified from office. This is nonsense for a variety of reasons. For starters, Paul is only guilty of poor judgement if the newsletters were written by someone else. Moreover--and this is going to be a hard point to grasp since racism is seen as the worst possible crime--his policies are not racist; it's unclear how a libertarian would govern in a racist manner. This is not to concede that Paul is racist--no one who knows him or is familiar with his work makes this claim--only that if he were, it wouldn't be as bad as people might think. Obama is not racist against Middle Easterners, but that hasn't prevented him from killing scores of them in foolish wars. It's absurd to be more concerned about value judgements than policy implications, yet this is what Hannity is doing.
The truth is Hannity doesn't care about the newsletters. That these dubious charges of racism are the best dirt that his opponents--and yes, Hannity is an opponent of the good doctor--can dig up tells us a good deal about the strength of character which Paul possesses. No; what Hannity cares about is Paul's foreign policy views. Like any good neo-con, Hannity loves war. He's worried sick that Obama might not start a war with Iran, and he's tickled pink that the rest of the candidates have exhibited no trepidation towards yet another war.
The implications of this position are quite interesting. For both Gingrich and Romney share Obama's foreign policy views as well as his domestic views. It's true that both of the Republican candidates have told us that they will end Obamacare, but this aside, both are equally eager to continue deficit spending for years to come, rhetoric notwithstanding. On the war front, both are equally committed to Empire, though there might be some differences as to which countries we wouldn't invade--yet.
Now, Ron Paul also opposes Obamacare and promises to overturn it. He also promises to cut $1 trillion from the budget in his first year, which is 99% more than either Romney or Gingrich promise. However, he does have diverging views on foreign policy. By supporting Gingrich and Romney against Paul, Hannity is telling us that $1 trillion in spending cuts are not worth a change to foreign policy. In other words, he's more than willing to accept another big government conservative than concede any ability to wage additional wars. Never mind that we don't have the money to wage any more expensive wars since we keep nominating big government conservatives.
We know from talk radio that anyone who doesn't vote for Republican candidate X is really voting for Democrat candidate Y--never mind the logic; we're in talk radio land. So what Hannity is saying when he admits that he will not support Paul is that he prefers an Obama presidency to a Paul one. Which is to say that he will not give up Obama's foreign policy for Paul's, even if it means that we can repeal Obamacare and cut $1 trillion from the budget. This is very interesting, because it's a tacit admission that Paul is to "the left" of Obama on the war front, that is, he is less likely to go to war than our current president. This is precisely the reason Paul would do so well against Obama, who would be forced to run as a hawk, thereby alienating his base.
The inescapable conclusion is that there is no party for conservatives. The only thing that the War, err, Republican Party wishes to conserve is our Empire. Every other constituency must sacrifice its principles for the good of the party: pro-lifers have to tolerate pro-choice candidates, second amendment proponents must not quibble with candidates who promote gun control legislation, fiscal hawks must support big spenders. Only the imperialists are exempt from sacrifice.
The reality is that there are a lot of people who make an awful lot of money off of our Empire, and they're not going to see the spigot closed without putting up a fight. It's going to get very nasty for Dr. Paul as his campaign continues to grow. The good news is that this is forcing so-called conservatives to show their hands. Hence forth, it's impossible to view Hannity as anything more than a warmonger.
Tuesday, December 13, 2011
The elites have ordained Mitt Romney as the most electable of the candidates, or even, the only one who can beat Obama. This tired argument is trotted out every time the party nominates a candidate who is anathema to the base. We saw it with Dole and again with McCain. Both of whom, interestingly enough, failed to win the elections despite their purported electability. The main reason, then, that this argument is a fundamentally foolish one, is that no one knows who will be the next President. In the end, only one candidate will prove to be electable, which is to say, elected.
But this is not to say that we cannot attempt to analyze how electable a candidate might be. The usual tactic is to assume that, since conservatives can be expected to vote for anyone not named Obama, the dullest, safest, moderate will attract votes from independents and moderates. There are two problems with this approach. For starters, it's unclear what is to be gained by nominating someone who doesn't share the same values as his supporters. If merely defeating Obama is the goal, the Republicans may as well run Hillary Clinton for president. I don't think they would be satisfied with the effects of any subsequent electoral victory.
The second problem is that it ignores the most important sector of the electorate: the non-voter. Obama won for a variety of reasons, but his campaign was undoubtedly helped by the many first time voters who came out to support him in his historic election. Neither Romney nor Gingrich is likely to exhibit such pull, but Ron Paul will draw in libertarians, young voters, disenchanted democrats who appreciate his stance on civil liberties and foreign policy, as well as independents who vote for candidates who are different from the usual fare--think Ross Perot.
Now, it's possible that those on the right who dislike Paul's positions on foreign policy will stay home. But it's less likely that life long Republicans will vote for Obama, so depending on the number of independents he would bring in, this may well be a wash. In any event, such a boycott would be instructive. Republicans are supposed to care about reducing the size of government. Lo and behold, a candidate offers to cut 1 trillion dollars per year, and to balance the budget during his first term. Alas, he is insufficiently enthusiastic about continuing our wars and starting some more--which, incidentally, costs a lot of money. That Republicans have not flocked to Paul reveals that the War Party cares far more about committing acts of aggression against other nations than it does about reducing the deficit.
Ron Paul now trails Gingrich by a single point in Iowa. I cannot claim to know who will be elected, but it seems clear that Americans will at least have the chance to nominate Paul, after which we can see what he can do against Barack Obama.
Wednesday, December 07, 2011
The Eurocrats are meeting again this Friday. There will be a great many rumors, but the only thing worth watching is whether the treaty will be modified so that European Central Bank (ECB) can purchase bonds from EU governments, just as the Federal Reserve monetizes American debt. The treaty disallows this at the behest of the Germans, who were reluctant to undergo a second hyperinflation in just under a century. If the Eurocrats can't get permission to buy more debt, the EU is totally doomed. Since they've been working on this project for over fifty years, I highly doubt anyone is going to let worries of currency collapse ruin dreams of world government.
Hence I expect that the treaty will be amended to allow limited purchasing of bonds. In short order, these limits will be gradually removed, at least until the German people revolt. Absent more inflation from the ECB, it appears that European banks will begin to fail in relatively short order, with drastic consequences for our equally insolvent institutions.
Almost there. Stay on target.
Sunday, November 27, 2011
In a superficial sense, his book is thorough; he quotes from a variety of different people to make his points. However, because the vast majority of his sources are merely defending policies which they implemented, his apologetic comes across as self-serving. Asking Dick Cheney whether or not waterboarding is meritorious is akin to asking Joe Biden whether the stimulus program worked. We know what we will be told, but we remain unsure as to the real answer.
Theissen offers a cursory defense of the morality of enhanced interrogation techniques, to wit, it's not torture, and anyway, there are different rules when dealing with terrorists. Yet the thrust of his argument is utilitarian: "We should be grateful to, and proud of, those who took on the difficult job of interrogating captured terrorists. They elicited information that saved countless innocent lives."
The danger of his approach should be obvious: if safety becomes the only test of morality, it is difficult to see which of our rights are inviolable. That some of our freedoms remain is beside the point: once this test has been admitted, there is no logical reason why government may not strip away our rights—one by one.
There is a greater flaw in Theissen's book, however. Until the very last chapter, he does not so much as examine why it is that terrorists may be attacking America. Then, he flippantly insinuates that terrorists are simply evil. He quotes Peter Rester, the director of the Joint Intelligence Group at Guantanamo, who notes that critics cite: "America's support for Israel; America's occupation of the Holy Land; America's occupation of Saudi Arabia" as policies which give impetus to terrorism against the United States. But for Theissen, discussions about policies are excuses, irrelevant to the discussion.
Nothing could be further from the truth. Theissen insists that if the terrorists attack again, the Obama administration will have blood on its hands, since the attacks could have been prevented had we continued to use enhanced interrogation techniques. Yet it is truer to say that American policies—indiscriminately bombing Middle Eastern countries, insistence on occupying these same countries, and unquestioning support for Israel against the Palestinians—produce what our CIA calls blowback. Terrorists attack us because of these policies; we know this because they have told us as much. This does not excuse the behavior of those who kill innocents, but it does make it partially explicable.
This does not necessarily mean we need to reverse our policies. But we need to accept that there are costs for our Empire—just as there are costs for refusing to utilize enhanced interrogation. A prerequisite to Theissen's book is an understanding of our foreign policy, and the role it plays in fomenting terrorism. It is puzzling that he considers something so essential to be of so little consequence.
Friday, November 25, 2011
Today, I don't think that many would challenge the notion that the academic dogma has been swept aside in favor of other dogmas. As I've written before, modern universities are, with very few exceptions, at best, glorified trade schools. At their worst, they allow enfeebled middle class minds to hobnob about for half a decade in quasi resorts, without bestowing more than a modicum of knowledge upon the students.
What concerns me here, however, is not the death of the universities, but the prospects for revolution. For Nisbet offers ten criteria by which one may know whether or not a revolution may be imminent. We can use these criteria to apply the test to America as the year 2011 draws to a close.
I should not have to explain that such an examination has nothing to do with whether or not I desire a revolution. Being a hopelessly reactionary, on the whole, I think revolutions do much more harm than good. However, if a system is corrupt and unjust, and makes no motion to better itself, history testifies that if it is not satisfactorily reformed, at some point, it will be overthrown.
1) First, there must be a preceding period of sharp, almost convulsive changes in society, especially in the economic and social spheres.
Check. The Greatest Depression shows no signs of abating. This time, there are no soup lines because, unless one cashiers at a grocery store, it is not apparent which Americans are using welfare money to feed their families. Suffice it to say that these numbers are not insignificant.
The real crisis is still to come, however. By forcing down interest rates, Bernanke encouraged retirees to speculate in the stock market. When the stock market plunges, pension and 401Ks will lose value; those depending on them will be in for a rough ride.
2) Second, there must be a strong feeling of the breakdown of established authority.
Check. For all their infantile ignorance of, well, most things, the Occupy Wall Street protestors are right about this. In Washington, the rules are being changed almost weekly. Whether it was allowing investment banks like Goldman Sachs to act as commercial banks to receive money from the Federal Reserve, or whether it is the refusal to investigate fraud by the banks, in the economic realm, certainly, there is no authority. But the problem is not so much that banks police themselves as that they make bets with taxpayer money, paying executives nice bonuses if the bets work out, and coming to the taxpayer for more money if they do not.
The Republican Party Presidential debates further reinforce this breakdown in authority. With President Obama owned outright by the banks, a Republican candidate could capitalize by insisting that, as President, he would investigate all serious allegations of fraud. Instead, the candidates are telling the hippies to get jobs, which is utterly beside the point.
3) Third, there must be a considerable degree of affluence.
Not yet. This is a paradoxical point: one assumes that the poor would rise up in a revolution, but it is always someone with comparative affluence who leads them. Many of the Founders were merchants; Robespierre and Marat weren't exactly impoverished.
The candidates here are the recently unemployed finance workers. While much of the middle class is faced with the prospect of making due with less money, or else postponing retirement, finance workers--the best and brightest; follow the money--are being forced to come to terms with the fact that they went into the wrong field. You can bet your Goldman stock that those who have been booted off the gravy train are none too pleased about it. My suspicion is that the leaders of the revolution will come from the displaced finance sector.
4) Fourth, there must be a substantial measure of liberalization achieved during the period before the revolution.
Not yet. If anything, the police state has been trying to assert itself all the more readily as of late. And the War on Drugs continues apace. Yes, the Internet has provided a liberalization of sorts--which is why the Congress is hoping to impose a Great Firewall. Still, Nisbet demands that this take place "in political and legal as well as customary terms." So I would say we have a ways to go.
5) Fifth, there must be a striking politicization already going on.
Check. I would say that the Tea Party and the Occupy Wall Street movement have demonstrated that pretty well everything is heavily politicized. That the former has been co-opted by the Republicans, and that the latter will almost assuredly become co-opted by the Democrats is, I think, beside the point.
6) Sixth, there must be power-sensitive, power-eager, intellectual elites.
Unsure. Does a civilization which is degraded as ours produce elites anymore? Comparatively, perhaps. Again, I think the displaced finance workers are the group to watch. For decades now, the sharpest and most well-connected students went to Ivy League schools after which they proceeded into finance. If the establishment can't find a way to place these recently unemployed, there are going to be some very bright people, who--and this is important--know the system very well. So far, the rhetoric of Occupy Wall Street has been unimpressive. But if the former-bankers get involved, the criticisms of Wall Street will become much more pointed.
7) Seventh, there must be some precipitating incident or event, one that, while in no way necessarily related to internal conditions, succeeds in bringing passions to ever greater boil and, with this, potential mobilization of numbers.
Not yet. It is tempting to claim that police brutality against peaceful protestors has helped mobilize the Occupy Wall Street movement. And this is true to some extent. But it remains a fringe movement, for the time being. I suspect that this event lies somewhere in the not too distant future.
I should note, too, that some of these protestors have turned violent. So not all of the police violence has been unprovoked. But there is no excuse for shooting people in the head with rubber bullets or pepper-spraying innocents. The police are losing the PR battle, which is why I suspect that an over-reaction by the men in blue will facilitate a much more significant uprising.
8) Eighth, the moral issues must somehow be made appealing to substantial numbers.
Not yet. The right remains oblivious to the wrongs done by the banks; the left remains equally oblivious as to the role played by the government in facilitating theft by the banks. Someone will need to connect the dots so that the outdated left-right divide can be thrown out in favor of a dichotomy that makes sense. There are those who try to do right by serving one another without compulsion, and there are those who become rich through government force. That is the real division. Too few realize this--as yet.
9) Ninth, it must be easy to contrast an existing scene of declared corruption, hypocrisy, and insensitivity to human rights with a utopia summoned up either from the romanticized past, some primordial Garden, or from the imaginary future.
Not yet. The continued economic contraction should make this more plausible. When the rationing begins--for the people of course, not the elites--making the case for utopia will be trivial. Before then, it will require a bit more imagination.
10) Tenth, there must be a certain reservoir of guilt in the Establishment of a social order or institution if revolt is to be gotten off to a good start.
No. The elites don't seem to care one bit. Obama has expressed some sympathy with the protestors, but this has been mere rhetoric. Likewise, the entire Republican field, as well as most of Congress, expresses no guilt for what has been done to the people. More importantly, nothing has been done to show that Washington is not run by the bankers. In fact, Obama wishes to give the banks a get out of jail free card in exchange for a fine. That's just not going to be acceptable to the masses--once they figure out what has transpired.
Thus stands the revolution. We shall continue to watch carefully in the months and years to come.
Thursday, November 17, 2011
All this talk about regulation is little more than a curious canard. For what occurred during the housing bubble was no less than grand scale fraud by the banks. Fraud is not something one regulates against. It is prosecuted, not because it is a violation of some arcane minutiae buried in some back page of a manual at a regulatory agency, but because it is a provision of common law. Prohibition against fraud is an integral part of the western tradition. It has also been written into the United States Code of Law:
No one knows how much fraud the banks have committed. We know that there has been some. There are probably more guilty bankers out there, which is why, despite their economic ignorance, the Occupy Wall Street movement is still by and large a good thing. The protestors realize what many of the Republicans and President Obama deny: the rule of law is not being applied fairly to those who are rich and well-connected.
Indeed, just this week, a story was published in which President Obama alluded that the actions taken by bankers were "not necessarily against the law." Yet he has no way of knowing to what extent the law has been broken. But rather than investigate banks to determine if fraud has been committed, he wants the banks to pay a measly $20 billion fine to handle the mortgage mess. That may seem like a lot of money, but it's not to bankers. If they have committed no crimes, this fine is unjust, but if they have broken the law, the people have a right to know about it--and for the criminals to be punished accordingly.
This focus on regulation is distracting us from a very discomforting fact: the rule of law no longer applies in America. Bradley Manning is being held indefinitely, without charges; an American citizen was assassinated by our own government; banks commit fraud, pay small fines, and get bailed out. We should hear no more talk of regulation from presidential pretenders. What the American people need to hear is whether or not the rule of law will again apply, or whether we shall continue to be ruled capriciously by despots. Bromides to American greatness may convince the willfully duped, but those with eyes to see are beginning to notice that the image projected by politicians bears little resemblance to the reality: that we can no longer be considered a great country.
Wednesday, November 16, 2011
The Tea Party is concerned--and rightly so--with government growth. Yet this problem is not exactly a new one. It is true that Obama has added more to the debt than all of his predecessors combined, but this has far more to do with the machinations of fractional reserve banking and the compounding of interest than any especial radicalism of the President. Had McCain been elected, he too would have "stimulated" the economy, probably by bombing Iran and cutting taxes--which also would have increased the national debt substantially.
It is distressing then, that so many former Republicans--despite the re-branding, Tea Partiers are still, by and large, GOP faithful--took so long to notice that government was getting bigger. Ironically, it was Republican presidents--chiefly Reagan and George W. Bush--who added most of the pre-Obama debt. Charges of hypocrisy then, are fair. But they are also beside the point. We cannot undo past profligacy. Any movement which seeks to curb spending is acting in the interests of the American people, however ineffectual it may be.
There is another arresting fact about the Tea Party. It is made up largely of older citizens. This leads to the second great irony of the movement: these supposed opponents of government depend upon it continuing to function as it has. Many members of the Tea Party are retired. They have worked hard and expect to enjoy the fruits of their labors in their golden years. Yet in this they are--however begrudgingly--dependent on government programs, namely Social Security and Medicare. Alas for the retirees, the money they have paid in has already been spent. These programs must now be paid for out of the general fund. As our debt climbs, it becomes increasingly unlikely that these programs will continue to be funded. No politician is insane enough to propose major cuts now, but through a combination of means testing and rationing, the programs will invariably be reduced.
Which brings us to Occupy Wall Street. Since the movement is newer and has not--yet--been co-opted by one of the major parties, it's a bit difficult to discern the agenda of the group. We know that, to their credit, they are mad at Wall Street and the bankers. For while envy of the rich is not virtuous, demanding that those who committed crimes be brought to justice is. Indeed, not only have the banksters escaped jail, they have been bailed out. It's true that some of the protestors are youthful idiots, whose mushy heads are receptive to socialist nonsense; this should not cause us to forget that they are largely correct about the banks.
The most obvious difference between the two groups may be the age disparity. This is significant. Our entitlement programs are Ponzi schemes. Since Occupy Wall Street types tend to be younger, there is no chance that they will receive any of the benefits of these programs. No one knows when the insolvent programs will be abandoned; retirees are hoping that it will be after they die; young people know that it will be before they retire. In any event, some retirees will be left without any money, which is why one should think carefully about retiring, if one retires at all
Much of the criticism against the Occupy Wall Street movement has focused on the entitled nature of the protestors. Certainly those who demand a free college education seem to fit the bill. But youngsters will not be able to act entitled for long. Just today, the national debt surpassed the $15 trillion mark. No one can fathom these sorts of numbers; still, the message is clear: the US Government will go bankrupt fairly soon. Younger people will have to do without the nanny state--but so too will older people.
Political prophecy is a tricky thing, but I think the end result is pretty obvious. Old folks vote in large numbers. For awhile, they will ensure that no politician dares upset the Social Security and Medicare gravy train. But the State will not be able to continue to force taxpayers to pony up in perpetuity.
In their own clumsy way, the Occupy Wall Street protestors are adumbrating the coming generational clash. If we are governed by responsible adults, the transition will proceed peacefully. If we continue to be governed by children in thrall to the banks--and I see no indications that this will change--the transition will take a violent turn.
The details are murky; this is a topic to which we shall have need of returning in the upcoming months. The police may have sent the protestors scurrying for cover, but the problem remains. The young and the old have been pitted against one another by a government that takes from the former to give to the latter. This is a problem that must and will be solved.
Wednesday, November 09, 2011
"There's no such thing as a free lunch."
This phrase has been popularly attributed to the economist Milton Friedman. Although he believed in the wisdom of the saying, he never claimed to have been the originator of it. Instead, he utilized it to illustrate an important economic concept. Every action costs something. Often this is denominated in dollar terms: a pop costs a dollar. Other times, the terms are different: the cost of writing this piece is reading a book. Economists refer to this as opportunity cost. It's a very good habit to account for this when contemplating any significant decision.
We'll come back to opportunity costs in a bit. For now, I'd like to talk briefly about the benefits of a college education. The primary benefit is that possession of a college degree increases the likelihood of employment; it also, on average, enhances earning potential, as college graduates can out bid non-graduates for preferred jobs. The latest numbers from the Bureau of Labor Statistics1 suggest an unemployment rate of 4.2% for American citizens with at least a bachelor's degree as compared with a rate of 9.7% for those who possess only a high school diploma. Other numbers, also from the BLS2, place take home pay at $1038 per week for college graduates as compared with $626 per week for those who have only completed high school. There are exceptions, of course: despite never completing college, many founders of businesses—Mark Zuckerberg, Bill Gates, etc.—obtain remuneration which far exceeds that of the average college graduate. Nonetheless, these general truths do hold.
This does not necessarily imply, however, that the college education is the cause of the benefits. This would be an example of the post hoc ergo propter hoc fallacy, Latin for: "after this, therefore because of this." Typically, the best and brightest high school students are encouraged to attend college; it should not surprise us if this same group has more success in the job market. This is not to say that college education has no influence on the employment prospects of graduates, only that this influence is not necessarily causal. Intelligent, hard-working people tend to succeed in relatively free societies such as ours.
As an aside, I should add that data gathered during our current recession suggests that the job picture has darkened, though this holds for both college graduates as well as those without college degrees. In many cases, the former are displacing the latter and squeezing them out of the labor market.
Since we haven't really proven that college education makes a difference, it's worth examining some of the reasons it might do so. To do this, we have to separate the two disparate functions of education: that of providing a classical liberal arts education, and that of providing training for a specific vocational function. The former was the traditional aim of all institutions of higher learning. So a student would learn Greek and Latin; he would read Virgil and Homer in the original, and provide his own translations. As our educational system began to let in more students, the emphasis on the classics faded. This is an important development for our civilization, but it's not terribly relevant here.
The second function of education, and, for all intents and purposes, the only aim of education today, is to provide training for employment in specific fields. I received a degree from Michigan Tech in Computer Engineering; so I received instruction in physics and math, circuits, software design, computer hardware, etc. Elementary education majors learn how to teach classes, accounting students learn how to keep books, and so on and so forth. Schools will still require a handful of general electives, but it's basically correct to say that modern universities are glorified trade schools.
Earlier, we looked at some statistics comparing college graduates to high school graduates. Yet when we see universities as trade schools, we should also see that lumping all college graduates together doesn't make a lot of sense. In economic terms, the BLS is aggregating dissimilar goods. The market is prepared to pay software developers different wages than teachers. This may or may not be just, but it is reality. So when one hears statistics that suggest that college graduates make more money, be sure to compare remuneration across degrees. When doing so, it's interesting to note that professions which pay well are thoroughly documented. Finding any sort of data on Women's Studies majors proves difficult, but implicitly tells us something about the wages such graduates command.
Even after we've accounted for varying fields of discipline, we need to account for the quality of the institution. Possessing a business degree from Harvard is going to be worth more than possessing a business degree from St. Cloud State—even if my brother refers to his alma mater as the Harvard of the Midwest. This isn't to say it's imperative to get into the best college; certainly Michigan Tech is a far cry from MIT, and yet I'm gainfully employed. But at the high-end, a degree generates some extra pull, and at the bottom end, that is, at the for profit colleges, the degrees may not even be worth the paper on which they are printed.
Returning to Friedman's admonition—"There is no such thing as a free lunch"—and examine the costs. First, and most obviously, there is a financial cost. Financial aid and scholarships are available, often depending on one's race and socioeconomic status; still, as the Huffington Post reported just over one year ago, "The average cost of a four-year, non-profit private college is $35,000, while cost for four-year public college comes in at just under $14,000."3 However, these numbers come from data comprising the 2007-2008 academic year. Tuition has increased since then; over the last ten years it has gone up at a rate of six percent annually. An online resource4 that assists students and parents in saving for college suggests that students can expect to pay $119,400 for a four year degree at a private college, as against $33,300 for students staying in state to attend a public university.
These figures do not include the cost of room and board, books, and other living expenses; these are not insignificant costs5. This also assume that the student will graduate in four years, a prospect that has become increasingly dubious for a variety of reasons, not least of which is the creative scheduling undertaken by colleges to ensure a steady stream of income. A staggeringly high 47% of students fail to graduate within six years.6
These numbers are vital because they help us gauge how much debt students must take on in order to obtain that important piece of paper. Even though college graduates do, on average, make more money than those who possess only a high school diploma, the former are awash in debt, while the latter should be able to stay relatively debt free. Moreover, not all college students work while attending class, but high school graduates have four or more years of accruing work experience and earnings. These years, coupled with student debt, constitute the chief opportunity cost of a college education today.
I'm going to run though a simple calculation to try to better quantify this cost. Again, numbers vary based on school, financial aid, degree, and so on, so it's best to run some of these calculations on your own, with your own numbers. Regardless, the exercise should prove worthwhile.
We'll say our hypothetical student took found a job making $1,038. But, because he was such an average student, he had $25,250 in debt upon graduating.7 The average debt for Minnesota students is actually higher8. Calculating an average interest rate is exceedingly tricky; there are a variety of different loans, with the rate on unsubsidized Stafford student loans coming down to 3.4% shortly, and private student loans carry a much higher rate. We'll use 7%, but this number may be too conservative.
CNN has a nice little calculator9 that requires the amount of debt as well as the interest rate; we're just missing the monthly payment. We're going to select an aggressive $412 a month, which is the effective bump in salary our average student obtained by graduating from college.
Based on these numbers, it will take six and a half years to pay off this debt. During this time frame, the student will be forced to live the same lifestyle he could have had with his high school job. Moreover, the high school student would have had the four plus years of college during which he was earning an income. At a minimum, it will take our average student ten years to surpass our high school graduate in terms of one's standard of living.
Yet most college graduates are not willing to make these aggressive payments, so let's run the numbers again based on a monthly payment of just $200. This time, it will take our student over nineteen years to pay off his loans. Compound interest is a powerful force and making minimum payments is a recipe for permanent indebtedness. If our student had reduced his payment by just $50 per month, it would take him over fifty-seven years to pay off his student loans. Students who take on one-hundred or even fifty thousand dollars in debt will find it virtually impossible to pay off their loans.
At some point then, college is no longer a bargain: it is an outright ripoff. But the tale gets grimmer still, due to a series of reforms enacted by the Obama administration, as well as that of the second president Bush. It is all but impossible to receive debt forgiveness on one's student loans. Commentator Vox Day utilized data from collegescholarships.org10 to summarize11 the all too typical process:
The private SLM corporation [Sallie Mae] provides a student loan.
The student defaults on the loan.
The federal government pays the balance of the loan and its interest to SLM.
The government sends the debt to a collection agency which adds a collection fee and a commission totaling more than 50 percent to the total. The agency is owned by SLM.
The collection agency garnishes wages, income and even Social Security checks. The former student, now a debt-slave, will literally be paying until he dies.
This holds true, even for those unfortunate students who never obtained a degree. This is deeply troubling, as there is very little economic value for attending classes without graduating. Real reform is imperative, but it will not be forthcoming since the universities and the private loan companies receive the money irrespective of the performance of the student; the government, meanwhile, has made things worse for students, while making sure that schools and corporations never suffer for enrolling students who cannot graduate. Regrettably, then, students will have to fend for themselves.
Unfortunately, I am not capable of rendering an informed judgment as to whether or not someone should attend college. No doubt many of you are feeling pressure to enroll in a university and continue your education. For some of you, this is probably the right step to take. But for others, it would be a dreadful mistake. It would actually worsen your prospects by swamping you with debt. Before you make this decision, I encourage you to do all you can to determine the true costs of education. The benefits are well known, but the sometimes hidden costs are equally important.
Saturday, November 05, 2011
Sovereign default is not the end of the world. No doubt it causes great harm for those who were dependent on the state fulfilling its obligations, i.e. creditors and beneficiaries of government largesse. For America today, the former are mostly foreign governments, though most banks throughout the world are invested in American treasuries. The latter is made up of the recipients of social security and medicare payments, as well as retirees with government pensions, along with any company with its hands in the pockets of Uncle Sam, from military contractors to the large banks. If the United States defaulted, there would be significant and far-reaching consequences for a large number of disparate parties.
But this does not mean it's a bad idea. The alternative is to double down on an over-leveraged banking system in the hopes of spurring economic growth to get us out of this mess. There are a variety of problems with this approach, not the least of which is that with out present ratio of debt to GDP, growth is exceedingly unlikely. The authors of the aforementioned book note that 90% is the key ratio, beyond which default becomes all but certain. We passed that Rubicon some time ago.
Incidentally, default makes growth more likely, albeit after a painful period in which debt deleveraging can occur. Karl Denninger does an excellent job of explaining the details in his book, Leverage, but I can offer a short explanation here.
Under our system of fractional reserve banking, banks are only required to keep some portion of deposits on hand. The rest can be lent out. Credit is created when banks lend out these "excess reserves." This credit creation facilitates a boom, during which everyone appears to be making money hand over fist and the economy seems to be doing well. Yet this growth is largely illusory. When deposits dry up--usually due to a tightening of the money supply of the central bank--asset prices begin to fall. The over-leveraged banks, i.e. almost all of them, are in trouble, for leverage is a cruel mistress: it multiplies profits on the way up, and multiplies losses on the way down.
The various government bailouts were intended to shore up the accounts of the banks and stave off the deleveraging process. This has only served to postpone the process. Fortunately, here in the United States, the Tea Party and Occupy Wall Street movements make future bailouts less likely, unless the Federal Reserve surreptitiously gives money to various banks. On a related note, this is precisely why Ron Paul has focused on auditing the Federal Reserve, and why anyone who fails to see the necessity of such an audit--such as Herman Cain--merits no consideration as a presidential candidate by anyone who understands economics.
Although no one can be certain of the day nor hour, default is in our future. The sooner we embrace this solution, the sooner the bad debt can be cleared from the books and the sooner we can return to real economic growth--as opposed to the increase in GDP which is a direct result of taking on more debt and, therefore, does nothing to employ more Americans.
While Greece is contemplating whether to accept another "solution" which purporting restores solvency to a bankrupt country, the example set by Iceland is illustrative of the benefits of default:
Iceland, whose banks defaulted on $85 billion in 2008, completed a 33-month International Monetary Fund program in August. The Washington-based fund expects Iceland’s economy to grow faster than the average for the euro area this year and next. It costs less to insure against an Icelandic sovereign default than it does, on average, to hedge against a credit event in Europe’s single currency bloc, debt derivatives show.
Since we have spent the last three years pretending to solve a problem by doubling down on our bad debt, 33 months is far too conservative for the deleveraging process. Yet this time period can only increase if we continue to delay the inevitable.
Tuesday, October 25, 2011
Only one of the Republicans candidates interests me in the slightest, but I find amusement in handicapping the race. Huntsman, Bachmann and Santorum should wash out soon. Perry has plenty of establishment cash, but he can't manage to string together more than a couple of sentences. He looks presidential--and yes, pathetically, that does matter--at least until he opens his mouth.
That leaves Newt, Cain, and, of course, the frontrunner himself, Romney. Gingrich has a certain appeal; he's coherent, and consistently bashes Obama, which plays well with the base. But he has nothing in the way of specifics to offer; trimming waste and reducing regulations were goals he should have achieved during the Contract With America. However he may campaign, he remains a Washingtonian insider. When this election cycle ends, Newt will be back on television, arguably where he belongs.
Cain is presently challenging Romney for the lead. This says more about the lack of fervor for Romney than does about Cain, whose pro-life credentials are, shall we say, dubious. Moreover, Cain, like Romney, was in favor of the TARP bailouts. With the still bankrupt banks looking like they could use another injection of cash, the last thing the Republican base wants is a candidate who will support a bailout. Last, but not least, Cain's vaunted 999 plan will increase taxes for most Americans. His plan is catchy, but does not stand up to scrutiny.
This leaves Romney alone. Actually not quite. Ron Paul's appeal is limited; he has been marginalized when he has not been ostracized as crazy. Moreover, despite their purported desires for limited government, many Americans still cling to Empire; Paul's insistence that we mind our own business, paying only for defense is too often seen as isolationism.
Still, Paul has offered $1 trillion in spending cuts--in one year. Romney promises that he will create all sorts of jobs, but cuts will come to a mere $20 billion. Now the raison d'etre of the Tea Party was opposition to government spending, which has left out country deeply in debt, and impoverished children not yet born. If the Tea Party is serious, they will have to support Ron Paul. His other views are simply not relevant given the enormity of the debt problem.
I have no doubt whatsoever that the Republicans will spurn Paul for the "more electable" Romney. But if the chance of a Paul nomination remains remote, it is less remote than it once was. Perhaps the Stupid Party will, just this once, fail to live up to its name. If they make the right choice, I will offer a very joyous mea culpa.
Regardless, a choice we shall have, between yet another lackluster establishment candidate and one who has a lengthy history of consistent opposition to that opponent of life and liberty, the State. Such is more than we could have expected this late into the republic's decline. May we choose wisely.
Thursday, October 06, 2011
So I'll make this short. I'd like to put something together later about the lawlessness of American society. We seem to be in a state of anarcho-tyranny. Large crimes go unpunished, but the citizens are held culpable for a seried of bizarre and insignifcant infractions. The fact that no one has been held accountable for the financial mess is a good example of this. Not only should the regulators who failed to detect any malfeasance be fired, but an investigation should be started to determine the extent of the fraud perpetuated by the banks.
Another example of anarcho-tyranny is the assassination of the American citizen Anwar al-Awlaki. Conventional wisdom has is that he was a terrorist and as such deserved to die. But we really don't know if he was a terrorist, both because the term as used by our government is sufficiently broad enough to cover a panoply of behaviors, but also because the government has not released the information it possesses which proves that he is, in fact, a terrorist.
Yet this obscures the greater point, which is this: the rule of law is an intregal component of any well-ordered society. It separates civilization from barbarism. As such, any attempts to go around our legal system should be viewed with a modicum of skepticism. Our justice system is far from perfect, but circumventing it hardly constitutes an improvement.
Anwar al-Awlaki was not charged with a crime. He was not tried and found guilty. He was executed at the discretion of our President. Awlaki is an exceptional citizen in many regards. Yet there is nothing to prevent the President from issuing similar orders against any other citizen. He may very well have been a terrorist, but since he was never charged with a crime, he is not objectively different from any other citizen.
This is an alarming precedent. We will come to regret that we stood silently by as our government abrogated our constitutional right to due process under the guise of fighting our never ending War on Terror.
Tuesday, September 20, 2011
1) Nothing. In Bernanke speak, we're keeping an eye on indicators, and we have tools, but the recovery is proceeding, albeit slower than expected. This should trigger a huge sell off. In all likelihood the markets have priced in QE3 already, at least partially. Also, tanking the market is the best way to get Helicopter Ben to use his "tools", i.e. print more money to give to corporations and bankers.
2) Operation twist. We should see a short run before a healthy sell off. This seems to be where the prevailing wisdom is heading. The problem is that the markets almost assuredly have this priced in, so it's unclear how it could help for more than a few days. If he pursues this route, the FOMC will have to consider using its tools again, at least if it wishes to save Obama from a disgraceful defeat in the coming election.
3) QE3. Or: more money for the plutocracy. This will help the markets, at least for a few months--say, through Christmas. Of course, depending on the amount, the markets could have this priced in already, which means we're looking at a shorter run before a sell off.
With the political front gridlocked--the Republicans are in full on stonewall mode, and Obama is finally pandering to his base, giving some evidence of a backbone--tomorrow's announcement is actually quite important. Bernanke can't fight economic gravity forever, but he might have a few rolls of the dice left. If we see QE3 stocks will indeed rise, but the real winners will be commodities like silver and gold. The real losers, as per usual, will be the American people.
UPDATE: The markets got the twist, whereupon they tanked. I fully expect Bernanke to announce QE3 once it is clear that: 1) Europe is in a very bad way; and 2) Obama's fifth stimulus plan is dead on arrival in the Republican controlled house. I also expect gold and silver to rebound on the news, the steep drop due to a recent margin hike notwithstanding.
Sunday, September 11, 2011
The title of Goldman's book is How Civilizations Die, but the addendum, And Why Islam is Dying Too, may be more important. For there is almost no awareness that the Muslim world is following in the footsteps of western civilization. Indeed, a popular narrative among those who seek to revive Europe has it that Muslims will soon rule the continent. But while European Christianity eventually lost the fight with modernity, Islam has fared worse.
Iran proves illustrative. "An educated twenty-five year old Iranian woman today probably grew up in a family of six or seven children, but will bear only one child." As of 2010, Iran's fertility rate stands at 1.7 children per woman. Decadence has enveloped the nation; drug use is rampant, and a sizable portion of the women work willingly as prostitutes. Paradoxically, this makes the Islamic world more dangerous, at least in the short term: "For in their despair, radical Muslims who can already taste the ruin of their culture believe that they have nothing to lose."
Of considerable interest was Goldman's account of the Thirty Years War, which ravaged Germany in the 17th Century. The German population declined "from 21 million to perhaps 13 million, mostly due to starvation." Ostensibly, the war was fought to decide whether the German people would become Protestant or remain Catholic. But there was considerably more afoot: Protestant armies were bankrolled by Cardinal Richelieu and Father Joseph du Tremblay, two French clergymen who had no trouble putting State ahead of Church. Their plan was to gain hegemony over Spain by bankrupting her. It worked. The senseless slaughter continued long past the point when battles decided anything—as in the American Civil War after Vicksburg. As Goldman tells it, nationalism was never fully subordinated by the Church; this failure, which first manifested itself under Richelieu, would haunt Europe until the middle of the twentieth-century.
Goldman finds two exceptions to the ennui that will lead so many nations to destruction in the coming century. The first, Israel, is well established; even secular Jews who live in Israel have children, and the ultra-Orthodox have large families—eight or nine children on average. His second example, America, is less convincing. True, religious Americans have proven less susceptible to the siren song of modernity. This has given the country a birthrate which remains at replacement level: 2.1 children per woman. Although he offers reasons for American demographic exceptionalism, I am forced to charge Spengler with too much optimism.
He is on firmer ground when he notes that: "America's demographic momentum offers a generation's grace period." Yet what evidence is there that we will do anything but fritter it away? For that is the approach America has taken with her debt problem, one that is not altogether different from its demographic dilemma. A nation does not run up too much debt for the same reason it raises children: it believes in its future. Presently, America lacks the political will to bequeath a worthy culture to its progeny. The demographic data tell a slightly different story—for now.
Friday, September 09, 2011
Unsurprisingly, Goldman's book is excellent, at least so far. I hope to finish it and post a review sometime this weekend, but I'd also like to enumerate Spengler's Universal Laws, which are scattered throughout this book. Some of these laws have already been featured in Spengler's columns, in which case I have provided a link to the original formulation. In any event, I thought it might be useful to have them all in one place.
Spengler's Universal Law #1: A man or a nation at the brink of death does not have a "rational self-interest."
Spengler's Universal Law #2: When the nations of the world see their demise not as a distant prospect over the horizon, but as a foreseeable outcome, they perish of despair.
Spengler's Universal Law #3: Contrary to what you may have heard from the sociologists, the human mortality rate is still 100 percent.
Spengler's Universal Law #4: The history of the world is the history of mankind's search for immortality.
Spengler's Universal Law #5: Humankind cannot bear mortality without the hope of immortality.
Spengler's Universal Law #6 (courtesy of Warren Buffett): You don't know who's naked until the tide goes out.
Spengler's Universal Law #7: Political models are like automobile models: you can't have them unless you can pay for them.
Spengler's Universal Law #8: Wars are won by destroying the enemy's will to fight. A nation is never really beaten until it sells its women.
Spengler's Universal Law #9: A country isn't beaten until it sells its women, but it's damned when its women sell themselves.
Spengler's Universal Law #10: There's a world of difference between a lunatic and a lunatic who has won the lottery.
Spengler's Universal Law #11: At all times and in all places, the men and women of every culture deserve each other.
Spengler's Universal Law #12: Nothing is more dangerous than a civilization that has only just discovered it is dying.
Spengler's Universal Law #13: Across epochs and culture, blood has flown in inverse proportion to the hope of victory.
Spengler's Universal Law #14: Stick around long enough, and you turn into a theme park.
Spengler's Universal Law #15: When we worship ourselves, eventually we become the god that failed.
Spengler's Universal Law #16: Small civilizations perish for any number of reasons, but great civilizations die only when they no longer want to live.
Spengler's Universal Law #17: If you stay in the same place and do the same thing long enough, some empire eventually will overrun you.
Spengler's Universal Law #18: Maybe we would be better off if we never had been born, but who has such luck? Not one in a thousand.
Spengler's Universal Law #19: Pagan faith, however powerful, turns into Stygian nihilism when disappointed.
Spengler's Universal Law #20: Democracy only gives people the kind of government they deserve.
Spengler's Universal Law #21: If you believe in yourself, you're probably whoring after strange gods.
Spengler's Universal Law #22: Optimism is cowardice, at least when the subject is Muslim democracy.
Spengler's Universal Law #23: The best thing you can do for zombie cultures is, don't be one of them.
Wednesday, September 07, 2011
They have found their punishment in their success: laws overturned; tribunals subverted; industry without vigor; commerce expiring; the revenue unpaid, yet the people impoverished; a church pillaged, and a state not relieved; civil and military anarchy made the constitution of the kingdom; everything human and divine sacrificed to the idol of public credit, and national bankruptcy the consequence; and, to crown all, the paper securities of new, precarious, tottering power, the discredited paper securities of impoverished fraud and beggared rapine, held out as a currency for the support of an empire in lieu of the two great recognized species [i.e. gold and silver] that represent the lasting, conventional credit of mankind, which disappeared and hid themselves in the earth from whence they came, when the principle of property, whose creatures and representatives they are, was systematically subverted.
Burke's argument may seem insubstantial, yet he was right to distrust the French currency. For the Assignat was destroyed through hyperinflation. Napolean replaced the worthless currency with the Franc in 1803, shortly after he came to power.
If one were to argue in favor of fiat currency, one would be compelled to insist upon government restraint. So long as the government could be trusted to refrain from debasing the currency, even worthless paper could serve well enough for a period of time. But governments do debase the currency if those who govern believe it will serve their ends.
On a related note, our own master of the Assignats is to speak tomorrow night, before giving way to our Napolean who will also speak. The president's plan is irrelevant since the Republicans house will stonewall anything which originates from the desk of the chief executive. Bernanke could conceivably announce QE3, but I think this unlikely--at least for now. Regardless, we will be entertained by some fine political theater, after which the NFL season begins.
But if I were looking to invest, I would follow Burke, and move my fiat currency into "the two great recognized species... that represent the lasting, conventional credit of mankind."
Sunday, September 04, 2011
This is too bad, because Steyn's book is actually much more than that. Sure, it contains an obligatory plan to roll back Big Government, filled with the sorts of empty promises Republicans have reneged on for nearly a century. But Steyn's heart isn't in it: he tells us that this will prove "difficult", which is a little like explaining that Sisyphus has some hours of work to do.
After America highlights the recklessness of the present administration, but it does so by noting that "Barack Obama is a symptom rather than the problem." If the president does not value life, liberty and limited government, this is equally true of the citizenry that elected him. A government that steals from generations unborn to finance its profligacy and views entrepreneurs as annoying hindrances to the business of government is problematic. Yet it is only a manifestation of a much larger flaw: its citizens no longer value those things which—Steyn argues—have made America so great.
The book is less a defense of things American than it is a critique of the soft socialism typified by Great Britain and Greece. Since FDR at least, the US has sought to shed its Jeffersonian trappings for a Big Government patterned on those of Europe. This trend has only accelerated as of late, not simply under Obama, but also under Bush, the "compassionate conservative" who gave the American people Medicare Part D and the TSA, which now gropes granny lest it be found guilty of profiling.
Greece and Great Britain are both doomed, and for essentially the same reasons. Government debt is overwhelming demographic reality. The people have lost the will to thanklessly perpetuate civilization. Both have middling productive sectors, upon which a large parasitic class feeds. And what feasts! In Greece, public sector employees retire at fifty-eight, whereupon they receive fourteen monthly pay checks until death. That was the plan, anyway. With the Greek birthrate at 1.3 children per couple, the math doesn't work. One can only run a Ponzi scheme if there are ever more suckers from whom to appropriate funds—as the soon to default Greeks are about to realize.
Great Britain may actually be in worse straits: "The United Kingdom has the highest drug use in Europe, the highest incidence of sexually transmitted disease, the highest number of single mothers, the highest abortion rate; marriage is all but defunct, except for toffs, upscale gays and Muslims." And this was before the London riots. Technically this makes Steyn something of a prophet, as does his insistence that America will soon see its credit rating downgraded. The remarkable thing is not that Steyn can point out the obvious consequences of liberalism, but that so many remain oblivious even while its fruits are rotting before our eyes.
The paradox of progressivism is that the creation of a social safety net has rendered man ever more fearful of risk. Instead of starting a business or raising a family, corpulent westerners curl into the fetal position in the gentle hands of government. This is not the way of civilization: it is the path to barbarism, shortly coming to the post-American world near you.
UPDATE: As a commenter from Amazon pointed out, Steyn's publisher is Regnery, not Regency.