Wednesday, July 23, 2014

Must Read: America's Ponzi Economy

Long have I said that America's economy is nothing but a ponzi scheme writ large.  In fact, most developed economies, especially western Europe, share this attribute with America.  Now, I'm proud to say that none other than Charles Hugh Smith believes the same.  Please, open the links and read.  Please.  While I will not repost the articles below, this one excerpt from Part I frames the discussion best:

Let's start with Our Ponzi Economy. There are three primary examples of our Ponzi Economy: pay-as-you-go social programs (Social Security, Medicare, Medicaid, etc.); housing and the stock market. All are examples of financial Ponzi schemes.
All Ponzi schemes rely on an ever-expanding pool of greater fools who buy into the scheme and pay the interest/gains due the previous pool of greater fools. Ponzi schemes fail because the pool of greater fools is finite, but the scheme demands an ever-expanding pool of participants to function.
All Ponzi schemes eventually fail, though each is declared financially soundbecause this time it's different. The number of greater fools required to keep the scheme going eventually exceeds the working population of the nation.

The Rot Within, Part I: Our Ponzi Economy

The Rot Within, Part II: Inflation Is Not "Growth"

The Role of Austrian Economics in the Liberty Movement

Tom Woods at the Mises Institute, at his usual best!

From Neo-Con to Libertarian: What War Does

Updated with another speech on the same topic ... superb!

The Picture of Intervention

Quote of the Day

"Selling cigarettes on the street cost a man his life. Think about it for a moment.  Trying to make a meager living in a miserable economy by selling a legal product deserves death now in New York." - Paul Huebl, The Senseless killing of Eric Garner and Our Police State

A Worthy Project: An Open Wireless Router

Calling All Hackers: Help Us Build an Open Wireless Router:

EFF is releasing an experimental hacker alpha release of wireless router software specifically designed to support secure, shareable Open Wireless networks. We will be officially launching the Open Wireless Router today at the HOPE X (Hackers on Planet Earth) conference in New York City, aiming to bring aboard members of the hacker community. This release is a work in progress and is intended only for developers and people willing to deal with the bleeding edge.

The software aims to do several things that existing routers don't do well—or don't do at all. We are beginning a journey that we hope will attract supporters and fellow travelers to help reach the following goals:1
  • Allow small business and home users to easily enable an open network, so guests and passersby can get an Internet connection if they need one, while keeping a password-locked WPA2 network for themselves and their friends or coworkers.
  • Let you share a bounded portion of your bandwidth on the open network, so guest users cannot slow down your Internet connection or use a large portion of your monthly quota.2
  • Provide state-of-the-art network queuing, so most users can expect an improved Internet experience—especially with latency-sensitive applications—compared to what commonly available consumer grade routers are delivering today.
  • Offer a minimalist, secure, and elegant Web user interface to set up and configure the router. Advanced, non-minimalist administrative options are accessible by SSH.
  • Advance the state of the art in consumer Wi-Fi router security and begin turning back the growing tide of attacks against them. Most or all existing router software is full of XSS and CSRF vulnerabilities, and we want to change that.
  • Include a secure software auto-update mechanism. In addition to using HTTPS, firmware signatures and metadata are fetched via Tor to make targeted update attacks very difficult.
We are offering this hacker alpha release to engage enthusiastic technical users who would like to help us test, develop, improve, and harden the Open Wireless Router. Currently the software runs on one specific model of hardware (the Netgear WNDR3800) and is based on the CeroWRT project. If you have a WNDR3800 router, you can get the developer preview image here and learn how to flash it here. If you'd like to hack on the code base, you can find code and instructions on building it at Github.

This Open Wireless Router prototype is made possible by the generous contribution of project resources and developers from ThoughtWorks, which came about through their exemplary social impact program. We are also very grateful for assistance from Dave Täht of CeroWRT and the Wi-Fi router hackers at Independent Security Evaluators (ISE).

  • 1.  For further details, questions, and offers of assistance, please start with the FAQ and Github pages.  If that does not suffice or for press inquiries please contact Ranga Krishnan
  • 2.  The prototype implementation includes a defined ceiling for instantaneous guest throughput as well as a long-term quota. In the future, we will implement a dynamic ceiling so that while you aren't using your network, guests can temporarily borrow it at full speed if enough quota remains available.

This Is Cool ... And A Bit Scary

Bruce Schneier's Fingerprinting Computers By Making Them Draw Images:
Here's a new way to identify individual computers over the Internet. The page instructs the browser to draw an image. Because each computer draws the image slightly differently, this can be used to uniquely identify each computer. This is a big deal, because there's no way to block this right now.

Article. Hacker News thread. EDITED TO ADD (7/22): This technique was first described in 2012. And it seems that NoScript blocks this. Privacy Badger probably blocks it, too
Worthy of some agnostic contemplation on the implications, don't you think?

Additional Reading:

Timing is everything!   White House Website Includes Unique Non-Cookie Tracker, Conflicts With Privacy Policy   This makes it truly scary sh*t now ...

No, It Can't, Can It?

Short and to the point: The Fed Can’t Fix What Ails the Economy: [the emphasis on the conclusion is mine]

In Congressional testimony this week, Federal Reserve Chair Janet Yellen pointed to several economic maladies warranting continued activism by the central bank. But what ails the U.S. economy cannot be fixed by monetary policy.

This has been an exceptionally weak recovery when gauged by the labor market. About half of the decline in the unemployment rate can be accounted for by “discouraged workers,” who have dropped out of the labor force and are no longer actively seeking jobs. For that reason, the unemployment rate is increasingly becoming a misleading gauge of the labor market.

In Monday’s Wall Street Journal, Mortimer Zuckerman wrote cogently of “The Full-Time Scandal of Part-Time America.” As he put it, “Way too many adults now depend on the low-wage, part-time jobs that teenagers would normally fill.”

Low economic growth is one reason that job growth has been weak. Growth in full-time jobs has also been slowed by Obamacare. The act mandates that employers provide health insurance for those working 30 hours a week or more. The predictable consequence is that employers are reluctant to hire full-time workers. Better two half-time workers than one full-time employee.

There are many other forces at work in labor markets, few of which are influenced by anything the Fed does. Until recently, there were extended unemployment benefits. These discouraged workers from actively seeking jobs. That effect combines with benefits, like food stamps, to act as a tax on taking a job. Casey Mulligan, an economics professor at the University of Chicago, has written extensively on the employment tax. If people don’t take jobs, employment cannot grow.

Some of what occurred in the recession is a continuation or acceleration of trends long in place. The male labor force participation rate has been declining since 1950. It was about 87% then, and is 69.2% today. The overall labor force participation increased for a long time because of rising participation by women. That has flattened now.

The fact that men increasingly do not work has profound social consequences. But, again, this is not a problem that monetary policy can address.

Janet Yellen has long been associated with the belief that the central bank can influence employment. She has also commented on the weakness in current labor markets, and the fact that the numbers overstate strength there.

Yet yesterday she observed that the labor market is improving more quickly than expected, and therefore the Fed might raise interest rates sooner than expected. Perhaps the Yellen Fed has decided to declare victory, and extricate itself from the trap of its own making. But that does not change the fact that labor markets remain weak.

It is hubris to claim the Federal Reserve can control variables, like the unemployment rate and labor market weakness, over which they have no systematic influence. But Fed policy is not just ineffective; it is malignant.

The main effect of Fed policy has been to create asset bubbles in financial markets, decoupling these from the underlying economy. As we learned painfully in the recent financial crisis, overheated asset markets are not a source of strength - they the source of future problems.

I Agree That The ...

... U.S. Should Stay out of Latest Sectarian Civil War: Leave Islamic Radicals to Iraq and Its Neighbors:

The rise of the Islamic State of Iraq and the Levant (ISIL) represents a significant failure of U.S. policy. The administration has dispatched nearly 1000 Americans to advise the Iraqi military and protect the U.S. embassy. However, ISIL so far does not pose the sort of security, let alone an existential, threat to America requiring military action.

Although the Baghdad government appears ill-prepared to regain lost territory, ISIL is unlikely to mount another blitzkrieg. The group may stage terrorist attacks in Baghdad, but lacks the strength necessary to capture Iraq’ capital, let alone gain control of majority-Shia nation.

In Syria ISIL radicals face simultaneous military challenges from the government, moderate opposition forces, and even slightly less extreme jihadists. Having declared a caliphate, ISIL also has taken on the political responsibilities of government. Overreach may turn the group’s strengths into weaknesses.

Most important, so far, at least, ISIL, unlike al-Qaeda, has not confronted the U.S. To the extent that the group succeeds in creating a traditional government over a defined piece of geography, it will establish a “return address” for retaliation should it seek to strike America. This suggests a more manageable problem at the moment, at least, than that posed by al-Qaeda in 2001. Thus, Washington should react circumspectly, avoiding further entanglement where possible in a conflict that already has consumed too many American lives and too many American resources.

Recent experience offer several sobering lessons useful in confronting ISIL’s rise.

Intervention brings unintended, unpredictable, and uncontrollable consequences. Joining such a conflict in such a region is inherently challenging. Some assumptions will be erroneous, some policies will be mistaken, and some outcomes will be unplanned. Ignoring often enormous differences in history, religion, culture, tradition, ethnicity, interest, and more almost guarantees failure. The result usually is to replace one gaggle of problems with other ones of greater magnitude.
Indeed, America’s experience in the Middle East highlights how one intervention almost always begets another. The 1953 coup against Iranian Prime Minister Mohammad Mossadegh elevated the Shah to full power, leading to his abusive rule and ouster in 1979. That caused Washington to back Iraq’s Saddam Hussein against Iran. In 1990 Hussein acted as we feared Tehran would act, leading to the first Gulf War and a force deployment in Saudi Arabia, which Deputy Defense Secretary Paul Wolfowitz later acknowledged to be one of Osama bin Laden’s grievances.

The second Gulf War removed Hussein—along with his heavy-handed suppression of sectarian strife and role as counterweight to Iranian influence. Even had the new government in Baghdad unexpectedly backed a continued U.S. military presence, the latter would not have prevented the sectarian hostilities which are exploding full force today. A dozen years of nation building in Afghanistan may have little enduring impact. As is evident there as well as in the Middle East, Balkans, and elsewhere, hatreds can live for centuries. Barring reconciliation, opined Adm. Michael Mullen, chairman of the Joint Chiefs of Staff, in 2007, “no amount of troops in no amount of time will make much of a difference.”

America’s interest varies based on the nature of America’s adversaries.  Most of those around the world who dislike the U.S. never act on those sentiments. They may lack the desire, opportunity, or means to strike, or fear the consequences of doing so. Deterrence kept Joseph Stalin’s Soviet Union and Mao Zedong’s China in check for decades.

In general, a restrained U.S. response emphasizing overwhelming retaliation, with allies taking responsibility for their security, is the best approach.  Intervening in conflicts without direct impact on America and initiating preventive wars where intentions and capabilities are unclear, as against Hussein’s Iraq, risk far more than they gain.

Very different is the threat posed by transnational groups, such as al-Qaeda, which target America and are almost impossible to deter. Although trade-offs remain important—for instance, promiscuous and especially misdirected drone strikes may create more enemies than they kill—the potential for attack against America is higher and the need for preemption (which differs from preventive war) is greater. Enemies planning attacks must be incapacitated, whether killed, captured, or debilitated.
So far ISIL’s fighters act more like an irregular military than a terrorist group. In fact, the organization offers social services and religious education, more characteristic of a traditional government. ISIL’s break with al-Qaeda reflected not only its brutality, but also the latter’s focus on the “far enemy,” that is, the U.S. In contrast, ISIL wanted to become something akin to a “real country,” which means it has less incentive to strike the U.S., since doing so would risk its geopolitical gains.

Of course, ISIL’s character is not immutable. Other Islamic groups, including al-Qaeda in the Islamic Maghreb, have called for reconciliation. Moreover, ISIL has threatened the U.S. So far, however, these rants appear to be empty boasting, likely intended to deter American involvement. The group has no evident reach beyond the Mideast.

And ISIL will have trouble maintaining its gains. Although the group, with a small but disciplined military force, has grabbed most of Sunni-dominated Anbar Province, the radicals lack the resources necessary to conquer Iraq or even take Baghdad. The slide toward sectarian strife has strengthened popular Shia resistance. Moreover, the organization’s Iraq success has depended on support of Baathist loyalists and tribal leaders, who are most interested in ending arbitrary arrests and killings, gaining a fairer distribution of national spoils, and winning regional autonomy. Today some Sunnis complain that Maliki is worse that Saddam Hussein.

Few of them appear interested in returning to the 7th century. Groups such as the Military Council of the Tribes of Iraq, Ansar al-Islam, and Army of the Men of the Naqshbandi Order agree with ISIL on what they are against, not what they are for.

Finally, the last caliphate collapsed a century ago. Sunni extremism is a dubious basis for erasing more traditional political identities and creating a stable nation state in the 21st century.  Once ISIL governs territory, it risks going from liberator to oppressor like the Taliban. Indeed, prior radical control—and consequent brutal jihadist behavior—in Iraq helped spark the Sunni Awaking. Clashes between ISIL and other Sunnis already have occurred and some Sunni tribes have assisted the Iraqi army.

U.S. military action almost certainly would result in more costs than benefits. As we’ve seen elsewhere, it’s easier for Americans to get in than get out of wars. The administration has sent Special Forces and Apache helicopters, and is contemplating “targeted, precise military action,” presumably air and drone strikes. Some observers have called for confronting not just ISIL, but also the Baghdad government to force it to broaden its support and demobilize Shiite militias, and Tehran, to limit the latter’s influence and compel the withdrawal of any military units.

However, Washington should have learned the limits of military power, especially when imposed from afar with little public support for what amounts to international social engineering. The more the U.S. attempts to do, the less likely it will do it well. The most serious problem today is that the Iraqi state lacks credibility and will, and the Iraqi military lacks leadership and commitment. These America cannot provide.

Simply inserting military advisers is risky. A classified Pentagon report concluded that only half of Iraq’s army units are capable enough to warrant support. Many also likely were infiltrated by ISIL and other extremists, making U.S. personnel vulnerable to attack, rather like in Afghanistan, with the spate of “green on blue” attacks.

Another possibility is drone strikes against ISIL’s leadership, but such a campaign would require accurate intelligence and targeting, which could not be entrusted to sectarian government forces. Moreover, killing the leaders of ISIL’s earlier incarnations did not break the group. Even more, today ISIL is too big to decapitate.

Airpower has become the preferred panacea to achieve any number of objectives. But ISIL has mixed guerilla with conventional tactics, making it a difficult target. The allies employed some 25,000 strikes on behalf of highly-motivated opposition forces in Libya and the latter still took several months to triumph in a desert-oriented campaign. Air attacks might help stop further ISIL advances, but would have limited effectiveness in urban warfare and could not liberate captured cities. Without clear objectives, and objectives achievable by the means chosen, the administration would face pressure to escalate.

Worse, intervening militarily without separating ISIL from other Sunni groups would create another body of enemies. Targeting Sunni areas almost inevitably would mean killing people once allied with Washington against al-Qaeda—as part of the “Sunni awakening” which was the key to the success of the Bush “surge.” The U.S. would face additional blowback.

Washington loses by giving a blank check to Baghdad or attempting to transform Baghdad. Next to ISIL’s Abu Bakr al-Baghdadi, the man most responsible for the ongoing debacle is Iraqi Prime Minister Nouri al-Maliki. The latter has misgoverned, exacerbated sectarian tensions, and weakened his nation’s governing institutions.  Both corruption and repression are rife. Despite security forces numbering a million men, Baghdad has lost control of much of the country. Supporting his government would reward counterproductive behavior which has helped bring his country to near ruin.

The administration long has been pushing Maliki to be more inclusive but such efforts failed in the past. So Washington also has been pushing for his ouster. A long line of politicians would like to replace him, but Iraqis are unlikely to act under American pressure. And even if the effort was successful, his replacement might not be much better. A desire for power tops that for reconciliation among leading Shiites. And Washington would be tied to “its man,” like Maliki, for good or ill.
Moreover, unconditionally backing Baghdad risks foreclosing potential solutions, including some form of federalism or even partition. The Iraqi Humpty Dumpty has fallen off of the wall. The Kurds are moving toward a vote over independence. Sunnis have more in common with their co-religionists across the border in Syria than with Baghdad’s Shiites. The mainstream Sunnis’ willingness to back ISIL demonstrates the depth of their alienation from Baghdad.

The Sykes-Picot Agreement was outdated when it was forged nearly a century ago. The U.S. and other interested parties, including Jordan, Israel, Turkey, and Iran, should talk informally about options to defuse the potential sectarian explosion. All reasonable possibilities should be considered.
Tying America to a Shia-dominated government would prove particularly dangerous if Washington intervened militarily in a sectarian war. As noted earlier, ISIL has succeeded because it has won support from former Baathists and Sunni tribes. The U.S. might deplore their cooperation with ISIL today, but they have done so for reasons entirely unconnected to America. And they hold the key to defeating the group in Iraq.

Backing the Syrian resistance against Bashar al-Assad’s government risks further undermining the Iraqi government and American interests. The civil war in Syria obviously is a humanitarian tragedy, and resolving it would be one way to limit ISIL’s expansion opportunities. But that conflict long has been beyond Washington’s control. The claim that if only the U.S. had given the right measure of support to the right group at the right time a democratic government representing all Syrians would have emerged is dubious: little about American involvement in the Middle East suggests the necessary combination of foresight, skill, knowledge, and luck. In any case, the battle has moved well beyond.

Funding other groups would help contain ISIL only if they focused their efforts on fighting a civil war within a civil war. However, despite intermittent internecine conflict, the opposition’s raison d’etre remains overthrowing the Assad government. These groups won’t do Washington’s bidding if doing so undermines their ultimate objective.

The Damascus government is odious, but not as inimical to U.S. interests as an ISIL “caliphate.” Further weakening the Assad regime increases the opening for ISIL and other jihadist forces. Washington must set priorities. The overthrow of Assad is desirable in theory but, like the ouster of Hussein, may yield unexpectedly bloody consequences in practice.

ISIL is more a problem for America’s friends than for America. Iraq’s ambassador to the U.S. observed that “it is difficult for us to decline offers from other countries that share our perceived danger.” He hoped to press Washington to act to preclude Baghdad’s reliance on other states, such as Iran and Russia.  However, the U.S. should encourage other regional powers to act.

Islamic extremism most directly threatens countries in the region. These states, overwhelmingly Muslim other than Israel and Lebanon, possess greater credibility in confronting ISIL. These nations, with the most at stake, should organize against the extremists.

Iraq must convince the group’s Sunni allies that they will get more by cooperating with a reformed government in Baghdad than in reconstructing an ancient caliphate. The outcome may not be precisely to Washington’s liking, but it wouldn’t likely be so even with more direct American intervention.

Hussein’s loss always was going to be Iran’s gain. Under these circumstances, it would be better to have Iran rather than America deeply involved in a burgeoning sectarian conflict. Rather than verbalize its unease and thus demonstrate its impotence, or engage in high level talks and ratify Iran’s role, the Obama administration should quietly ensure that any U.S. actions do not clash with those taken by Tehran.

Turkey has facilitated the flow of extremists into Syria, but recent events, including ISIL’s rise, have tempered Ankara’s enthusiasm for overthrowing the Assad regime. Moreover, Turkey has significant military capabilities and borders both Iraq and Syria.

Saudi Arabia and other Gulf States have been funding and arming extremist opposition forces in Syria. Aid to radical groups such as ISIL is counterproductive both to America and, ultimately, these nations—which are looking to Washington for their defense.

Other countries, including Israel, Jordan, and Lebanon, have an interest in rolling back ISIL’s gains. They all have different capabilities, and the implications of their involvement vary dramatically. However, Washington should encourage them to take action according to their interests and abilities.
U.S. options are limited. ISIL is a bad actor, but not one warranting a direct American military response. Recent experience in the region and beyond demonstrates why war should be a last resort. Indeed, ISIL has grown out of past U.S. policy mistakes. Washington cannot afford to be stampeded into another unnecessary and counterproductive war.

America's War on Drugs: The Root Cause of the Current Child Immigration Crisis

Ted Galen Carpenter is right-on-the-mark in his latest post entitled The Child Migrant Crisis Is Just the Latest Disastrous Consequence of America’s Drug War:

The surge of unaccompanied minors coming across America’s southern border has given rise to a humanitarian crisis, and with it, debates about immigration policy and border security. Lost in these discussions, however, is the role the American drug war has played in creating the crisis. And this is only the latest crisis. For decades, Washington’s crusade against illegal drugs has destroyed lives, destabilized civil society and generally wreaked havoc on Mexico and the countries of Central and South America.

Since October, more than 50,000 children and adolescents (mainly from Central America) have successfully made the trek through Mexico to reach the United States. Others have perished at the hands of the drug gangs that control the trafficking routes. Extortion, kidnapping and rape are all-too-common along these routes. Traffickers frequently force refugees passing through Mexico to become drug mules — they’re forced to smuggle small shipments of drugs as they make their way to the United States.

The refugees are fleeing not only grinding poverty but widespread carnage, inflicted mostly by powerful Mexican-based drug cartels and other criminal gangs. Journalists, politicians and pundits have had no qualms about connecting the refugee crisis to the drug cartels. Daily Beast columnist Caitlin Dickson is correct that drug traffickers have made those countries “virtually unlivable for its poorest citizens.” She’s also correct that this creates “an incentive to flee, thereby providing themselves with more clientele for their human smuggling business.” NBC correspondent Luke Russert blamed casual drug users, not just for this crisis but for the widespread devastation the illicit drug trade has inflicted on Latin America.

But as Honduran President Juan Hernandez told Reuters last week, the drug lords would not be able to cause so much chaos if it were not for Washington’s stubborn commitment to drug prohibition. That strategy greatly inflates the street price of drugs and fattens the profits of trafficking organizations. Economists estimate that about 90 percent of the retail price of illicit drugs is due to this “black market premium.” Predictably, when drugs are outlawed, only outlaws will sell drugs. Washington’s policy enriches and empowers the most ruthless traffickers — those willing to use violence, intimidation, and exploitation of the vulnerable to gain market share.

The result has been catastrophic for both Mexico and Central America. Responding to U.S. prodding, Felipe Calderón, Mexico’s president from December 2006 to December 2012, launched a military-led offensive against his country’s drug cartels. That strategy backfired badly. During the Calderón years, an estimated 60,000 Mexicans perished in the drug wars that convulsed across the country. Another 20,000 people went missing during that period. Many, if not most, were likely victims of the ensuing turf wars. Grisly decapitations became routine news stories. Ciudad Juárez, on Mexico’s border with the United States and astride one of the main trafficking routes, descended into a horrifying cauldron of chaos. It became so bad in Juárez that at one point a group of prominent business leaders asked the United Nations to send peacekeeping troops.

Corruption also proliferated, although it has often been difficult to determine if public officials have been corrupted by greed or threats of violence against them and their families. Appointed and elected officials, as well as police officers and soldiers tasked with bringing down the cartels, often face an ultimatum from the crime syndicates: plata o plomo? (silver or lead?) In other words, take a bribe or risk assassination. Too many officials who refuse to comply have paid for that decision with their lives—and sometimes with the lives of their family members. Others have understandably decided that assisting the cartels, or at least looking the other way, is the more prudent course.

While the pace of Mexico’s drug-related corruption and violence has eased slightly over the past two years, the situation in Central America has grown steadily worse. The leading Mexican cartels began to move operations into Guatemala, Honduras, and El Salvador in 2008 as the pressure in Mexico mounted. It’s a game of “squeeze the balloon.” Put pressure on the drug cartels in one area, and the drug trade just pops up somewhere else.

The corruption and violence followed them as well. In April 2013, Honduran authorities uncovered a plot by drug gangs to assassinate a congressman, a prominent journalist, and a police chief. A high-level Guatemalan official recently told the Associated Press that the Zetas (perhaps the most violent of all the Mexican cartels) had gained control of nearly half of Guatemala’s territory. The Zetas and competing cartels also control major chunks of Honduras, El Salvador, and Belize.
Highlighting the financial resources of the drug cartels, In a 2011 interview with Agence France Presse, former Guatemalan President álvaro Colom noted that authorities had seized almost $12 billion in property, drugs, and cash during his four-year term in office. The comparable figure for the previous eight years was approximately $1.1 billion. Twelve billion dollars, he emphasized, was equal to almost two years of the Guatemalan government’s budget.

One particularly outstanding trouble spot has been Colombia. The government in Bogota has for decades fought a violent civil war with the Revolutionary Armed Forces of Colombia, or FARC rebels, who get most of their funding from the black market trade in cocaine. The Clinton administration’s initiative, Plan Colombia, aimed to eliminate the drug trade by funding a campaign to spray tens of thousands of square kilometers of Colombia’s farm land with dangerous chemicals. This not only failed to ultimately reduce cocoa production, but it had detrimental effects on the environment as well as the local population, inflicting residents with a variety of dreadful skin, respiratory, and other ailments.

Another part of Plan Colombia, which has continued into the Bush and Obama eras, has been to undermine FARC insurgents by encouraging the Colombian government with billions in U.S. aid to militarize its approach. Over the years, atrocities perpetrated by Colombian para-military groups became common. According to a 2011 Human Rights Watch report, government- backed groups deployed to battle the FARC “regularly commit massacres, killings, forced displacement, rape, and extortion, and create a threatening atmosphere in the communities they control” often targeting “human rights defenders, trade unionists, victims of the paramilitaries who are seeking justice, and community members who do not follow their orders,” .

Instead of stabilizing the country, U.S. support for a hardline approach to the drug war in Colombia has exacerbated overall violence and human rights abuses. Tens of thousands of people have been killed, with millions more displaced. A 2013 report commissioned by the Colombian government documented “1,982 massacres between 1980 and 2012, attributing 1,166 to paramilitaries, 343 to rebels, 295 to government security forces and the remainder to unknown armed groups.”

In recent years, drug-related corruption and violence has hit Honduras especially hard. It is no coincidence that a large percentage of the unaccompanied minors making the perilous journey north now come from that country. Like much of Central America, Honduras has long suffered from a high homicide rate, but the drug cartels have made the bad situation there even worse. In 2007, before the Zetas and the other trafficking operations became entrenched in Honduras, the homicide rate was approximately 50 per 100,000 people. The rate soared to more than 90 per 100,000 in 2012, and the extent of the refugee flight indicates that the situation is not improving. The Honduran city of San Pedro Sula has the dubious distinction of being the murder capital of the world with a homicide rate of 187 killings per 100,000 inhabitants. For comparison, New York City’s murder rate is 5.1 per 100,000.

Yet U.S. officials continue to blithely argue that the drug war strategy in Mexico and Central America has been a success. Secretary of State Hillary Clinton exuded confidence in September 2013 when she said the money being spent on counter-narcotics efforts in Central America, nearly half a billion dollars over the previous four years, “has been money well spent.” Testifying before a House committee this past April, Luis Arreaga, Deputy Assistant Secretary of State for International Narcotics and Law Enforcement Affairs, stated that under the Central American Regional Security Initiative, the United States “is implementing a comprehensive and integrated approach to stem illegal trafficking.” Although he conceded that the effort might take some time to succeed, “we’re making progress.”

One wonders how Clinton and Arreaga define success—and at what cost. For the populations of Mexico and Central America, the toll in treasure and blood has been enormous.

Contrary to the confident assertions of U.S. officials, there is no evidence whatsoever that the cartels are weaker today than they were even a decade ago. And even if you accept the morally dubious premise that we should be willing to sacrifice Latin American lives to prevent Americans from ingesting drugs, these policies aren’t working. A study last year from the International Centre for Science in Drug Policy found that “despite increasing investments in enforcement-based supply reduction efforts aimed at disrupting global drug supply, illegal drug prices have generally decreased while drug purity has generally increased since 1990.” The study concluded that “expanding efforts at controlling the global illegal drug market through law enforcement are failing.”

An increasing number of Latin American leaders are recognizing that reality. Mexico’s former president, Vicente Fox, provided a succinct indictment to the Associated Press in 2010: “Radical prohibition strategies have never worked.” People should look at legalization, Fox argued, “as a strategy to strike at and break the economic structure that allows gangs to generate huge profits in their trade, which feeds corruption and increases their areas of power.”

Citing the bloodshed and collateral damage in their own countries, the leaders of Guatemala, Colombia, Costa Rica, and Bolivia have all called for an end to the aggressive, militaristic counter-narcotics tactics championed by the United States. In 2009, the a report authored by former Latin American presidents César Augusto Gaviria (Colombia), Fernando Henrique Cardoso (Brazil), and Ernesto Zedillo (Mexico) came to the same conclusion. American officials have brushed them off. Current and former U.S. anti-drug officials responded to the 2009 report by stating that the deaths of thousands of Mexicans and Central Americans was a sign that the U.S. was winning, apparently oblivious to how that must sound to the citizens of those countries. Meanwhile, Argentina, Peru, and Mexico have begun decriminalizing small amounts of drugs, and Uruguay has legalized marijuana entirely.

A comprehensive report published in June 2011 by the Global Commission on Drug Policy reached a similar conclusion. “The global war on drugs has failed, with devastating consequences for individuals and societies around the world,” the report stated flatly. U.S. officials obviously disagree. But it’s far easier for American leaders to maintain a steely drug war resolve when it’s the citizens of other countries who are doing all of the dying.

The carnage visited on the populations of Mexico, Central America, and South America provides ample evidence that all of these current and former Latin American leaders are correct. The current child migrant crisis is only the latest human rights atrocity attributable to America’s drug war. How much more death, violence, and social upheaval must be inflicted on Latin America before U.S. officials concede that the current prohibition experiment has been a disaster?

Must-Read: Proxy Wars

Cato's Christopher Preble's The Dangers of Waging War by Proxy is a (short) must-read:

The shocking destruction of Malyasian Airlines MH17 is merely the latest in a string of cases in which irresponsible and unaccountable proxies have brought shame and international condemnation down upon the heads of their foreign sponsors. The precise details of how a passenger airliner carrying 298 souls fell from the sky still aren’t known, but, as Jon Lee Anderson notes in the New Yorker, ”however it played out, this sort of tragedy is a natural consequence of giving weapons to violent men who feel that their powerful sponsor allows them to commit crimes with impunity.”

One hopes, once the memorials to the victims are concluded, and friends and families have had time to come grips with their loss, that the MH17 incident will induce greater caution on the part of would-be foreign sponsors the next time they consider arming shadowy rebels. But I’m not that optimistic. It certainly won’t be sufficient to stop all such cases. Advocates will likely claim that the particular proxy group that they favor isn’t at all like the pro-Russian separatists in Ukraine, and, thus, that there is nothing to worry about. “Our guys can be trusted with these weapons,” they’ll say. One hopes that skeptics won’t be scorned and ridiculed for voicing concerns.

For now, the focus is appropriately on Russian President Vladimir Putin’s cynical manipulation of the unrest in Ukraine. And that is where it should stay. I warned more than two months ago that Putin wasn’t the evil genius that some in the West have made him out to be, and that he likely had less control over the separatists in Ukraine than some alleged. His proxies might ignore him if he told them to stand down, I predicted, or do other things that he didn’t entirely support. The downing of a civilian airliner isn’t what I had in mind, but the bottom line is the same: senseless, tragic death. It doesn’t matter that Putin didn’t push the button that launched the missile, or that he didn’t want civilians – especially foreign nationals – targeted. If he provided separatists with weapons capable of causing such destruction, he bears responsibility for their actions.

That Putin appears to recognize this is proved by his mouthpiece Russia Today’s ham-fisted attempt to shift blame. RT’s initial report that it was caused by a Ukrainian missile fell apart almost immediately. Separatists, with Russian help, were seen trying to cover their tracks by moving SA-11 missile batteries within a few hours of the disaster. Strategic masterminds don’t deny responsibility for military operations that they are proud of. Eisenhower didn’t try to claim that the Normandy landings were a false flag operation. Douglas MacArthur’s forces at Inchon weren’t disguised as little green men. The absurdity of RT’s latest efforts prompted London-based RT reporter Sara Firth to quit in protest. “I couldn’t do it any more,” she told BuzzFeed. “Every single day we’re lying and finding sexier ways to do it.”

In the United States, hawks wasted no time trying to build support for tougher actions against Russia. This was inevitable. Whether any of these measures – including more military aid to Ukraine, more troops in Eastern Europe, and more sanctions – will have the desired effect seems to be beside the point. For my part, I would prefer forcing Putin to stew in the juices of his disastrous proxy war a little longer while the evidence of Russian complicity accumulates.

Here's a bonus read from Preble on the same topic: Why Putin’s Proxy War an Abject Failure

Tuesday, July 22, 2014

The IRS Scandal

So, the IRS has "lost" the emails of Lois Lerner, who is being investigated for the targeting of specific political groups.  Seriously, think about this in juxtaposition with the past year's worth of revelations into the NSA that has just about every word spoken sucked up into a massive database - and the IRS "lost" emails.  You try using this excuse when you get audited by the IRS - yeah, good luck 'wit 'dat.  Below are some of the best writings on the entire sad episode in the declining American state.

The IRS Says It Lost a Bunch of Lois Lerner's Emails.  That Deserves More Scrutiny.

Seven More Pieces on the IRS's emails (note: this post itself contains many additional links)

18 1/2 Minutes vs. 2 Years: Which is Worse

The Dog Ate My E-mails: For Two Years

Hard Drive Containing Ex-IRS Official Lois Lerner’s Emails Reportedly Destroyed. Were There Server Backups?

Missing E-Mail Is the Least of the IRS's Problems

Darrell Issa Fuming Upon Learning Lois Lerner's Hard Drive Was Destroyed

Trail Of Lost IRS Emails Might Lead To White House [What, you're surprised?  Really?]

Archives official: IRS didn’t follow law on missing emails

Who’s Behind IRS Targeting? Don’t Ask NPR

How are Obama and the IRS getting away with a blatant coverup

Clarity on the Missing Emails

The IRS Scandal: Who’s Really Being Gullible?

Lois Lerner Warned IRS Employees to “be cautious about what we say in emails” 

GOP skeptical of Justice IRS probe

Seriously?:Justice Department investigators didn’t know about missing IRS emails until they heard about it on the news

To paraphrase one of our previous presidents: It all depends on the what the meaning of the word "smidgin" is

New:  IRS Official Says Even More Employees Had Computer Problems, May Not Be Able to Comply With Congressional Subpoenas

New: IRS can’t get its story straight: Official says he’s not sure whether email backup tapes were destroyed

A Brief History of Progressivism

Andrew Syrios' A Brief History of Progressivism is a must-read! It should serve as a great "go to" reference:

Progressives have a way with words that is truly impressive. Perhaps it started when they stole the word liberal from libertarians and since has snowballed out of control. From “social justice” to “pro-choice” (except with light bulbs) to various “isms” to describe their opponents, progressives are experts at such linguistic feats. And while conservatives and even libertarians unfortunately use many trite phrases in place of an argument as well, progressives are the all-time champions. The best proof of this is the term progressive and their excessive use of it when referring to everything they support as being progressive and everything they oppose as more or less reactionary. This simple dichotomy is a pleasant fiction for those who like their politics boiled down to the most unsophisticated, partisan blather. However, the idea of progress coming on some gradient between reactionary conservative or libertarian and progressive liberal is blatantly fallacious.

Assuming progress is one way and reaction the other is a kind of two-dimensional thinking that breaks down very quickly. For example, the progressives of the early twentieth century generally believed things that would abhor progressives of today. Those progressives were the ones who rammed through Prohibition against those “economic conservatives who ... pushed so hard for repeal”[1] as historian Daniel Okrent put it. The famous progressive William Jennings Bryan was a staunch supporter of Prohibition. As his biographer Paolo Coletta noted,
Bryan epitomized the prohibitionist viewpoint: Protestant and nativist, hostile to the corporation and the evils of urban civilization, devoted to personal regeneration and the social gospel, he sincerely believed that prohibition would contribute to the physical health and moral improvement of the individual, stimulate civic progress, and end the notorious abuses connected with the liquor traffic.[2]
Sounds like a modern day drug warrior, to whom progressives are often quite suspect (unless they are fighting Four Loko, of course). Speaking of which, the progressives of old also passed the Harrison Narcotics Tax Act, the first federal drug law. Meanwhile, the presumably reactionary libertarian H.L. Mencken described supporters of Prohibition as being moved by the “psychological aberration called sadism.”

It should also be noted that Coletta described Bryan as a “nativist.” Nativism is usually associated with the right, but that shouldn’t be the case for these progressives. The AFL supported the 1882 and 1924 immigration restriction acts against the Chinese. In fact, many “progressive” labor unions were very racist, nativist, and nationalist. Even the second incarnation of the Ku Klux Klan in the early twentieth century, aside from being quite racist, was also in favor of many progressive reforms.

Abortion-advocate and progressive hero Margaret Sanger even gave a speech at one of the KKK’s rallies.

Margaret Sanger was also an avowed supporter of eugenics, as were many other progressives of the time (something modern day progressives seem less enthusiastic about). As Steven Pinker observed,
Contrary to the popular belief spread by the radical scientists, eugenics for much of the twentieth century was a favorite cause of the left, not the right. It was championed by many progressives, liberals, and socialists, including Theodore Roosevelt, H.G. Wells, Emma Goldman, George Bernard Shaw, Harold Laski, John Maynard Keynes, Sidney and Beatrice Webb, Margaret Sanger and the Marxist biologists J.B.S. Haldane and Hermann Muller. It’s not hard to see why the sides lined up this way. Conservative Catholics and Bible Belt Protestants hated eugenics because it was an attempt by intellectual and scientific elites to play God. Progressives loved eugenics because it was on the side of reform rather than the status quo, activism rather than laissez-faire, and social responsibility rather than selfishness.[3]
It’s almost absurd that conservatives and libertarians get blamed for eugenics, even if it’s typically in a roundabout way through the muddled and all but apocryphal term of “Social Darwinism.” After all, why would conservatives, who are often skeptical of evolution, support a “science” based on evolution? And why would libertarians support government trying to regulate people biologically when they oppose the government trying to regulate lemonade stands. Given that, it is unsurprising that the Catholic conservative G.K. Chesterton wrote Eugenics and Other Evils. And the great libertarian economist Ludwig von Mises complained about socialist meddling in that “... [a man] becomes a pawn in the hands of the supreme social engineer. Even his freedom to rear progeny will be taken away by eugenics.”[4]
But the National Socialists (i.e., “Nazis”) were the biggest proponents of eugenics and they weren’t progressive, right? After all, their 25 point platform demanded all sorts of libertarian things such as “the nationalization of all trusts ... profit sharing in large industries ... [and] a generous increase in old-age pensions.” Hugh Johnson, a key member of Franklin Roosevelt’s Brain Trust during the New Deal, even refered to Benito Mussolini as a “shining example of the twentieth century.”[5] Still, the National Socialists certainly weren’t antecedents of modern left-wing social justice warriors. Of course, it’s hard not to conclude such fascists were also close to the polar opposite of libertarians.

This history should prove that progress in terms of moving toward something better is, in a political sense, extremely subjective. For example, progressives in Denmark made prostitution legal and progressives in Sweden made it illegal. Can both be progressive? Now, progress surely exists in economic, scientific, and technologic terms. Or at least one would think. Some very progressive folks believe the Luddites were a “heroic movement for working-class rights.” So destroying technology equals progress? What about the Industrival Revolution? After all despite its many difficulties per capita income did skyrocket afterward. But some progressives seem unsure about the Industrial Revolution’s overall positive qualities. Or let’s go back further and ignore the ridiculously high levels of violence among tribal societies by undoing the Agricultural Revolution, which Jared Diamond calls “The Worst Mistake in the History of the Human Race.” Or forget that, let’s just get rid of human beings all together with the hyper-progressive voluntary human extinction movement. Progress!

What progress is and what reaction is depend very much on where you start and where you want to go. If equality is the goal as many self-described progressives say it is then any progress toward equality should be considered, well, progress. If that is the case, shouldn’t communism be the most progressive cause of all? Communism was certainly considered as such by many intellectuals in the past. Indeed, Karl Marx saw history as a sort of march of progress: primitive communism to slave society to feudalism to mercantilism to capitalism to socialism and finally to communism. And the Soviet Union certainly executed its fair share of reactionaries and counter-revolutionaries.

Fortunately, communism has been politically dead for over two decades. You may have a few radicals like Maoist Rebel News toasting his now dearly departed Kim Jung Ill with a shot of Hennessey or making a whole series of videos describing the greatness of North Korea by recycling North Korean propaganda videos and talking points. But that’s abnormal. Most modern progressives despise communism and would never show even the meekest support for such a blood-soaked system. Would they?

Well, over at Salon, Jesse Myerson wants to tell you “Why you’re wrong about communism” and Sean Mcelwee at The Rolling Stone highlights why “Marx was Right” because he foresaw the horror of iphones. Whoopi Goldberg thinks that at least “it’s a great concept.” Former Obama White House Communications Director Anita Dunn referred to Mao Zedong as one of her “favorite political philosophers” whom Howard Zinn lauded for creating “... the closest thing, in the long history of [China], to a people’s government ...”[6] Back in 1984, Jesse Jackson gave a speech in Havana titled “Viva Fidel,” Robert Redford went scuba diving with said dictator and Steven Spielberg described the time he spent with Castro as “the most important eight hours of [my] life.” Hollywood even made a four-and-half- hour, two-part propaganda film about Che Guevara back in 2008. The left’s mushy and ambivalent view toward communism may best be summed up by Daniel Singer, when writing for The Nation back in 1999, wanted to highlight both sides, the “enthusiasm, construction, the spread of education and social advancement” along with the less pleasant things, such as mass murder.

Refutations of such nonsense can be found elsewhere. What’s important to this discussion is that one would suspect that dusting-off things which had been left in the ash heap of history would be, well, reactionary. 

[1] Daniel Okrent, Last Call : The Rise and Fall of Prohibition (New York: Scribner, 2010), p. 361.
[2] Paolo Coletta, William Jennings Bryan (Lincoln: University of Nebraska Press, 1969), vol. 2, p. 8.
[3] Steven Pinker, The Blank Slate (New York: Penguin Books, 2003), p. 153.
[4] Ludwig von Mises, Two Essays by Ludwig von Mises (Auburn, Ala.: Mises Institute, 1991), p. 27.
[5] Quoted in Thaddeus Russell, A Renegade History of the United States (New York: Free Press, 2011), p. 252.
[6] Howard Zinn, A People’s History of the United States (HarperCollins Publishers, 2005), p. 399.

China Ascendent

China Ascendent from Stephen D. Krasner is an interesting read.

Yes, Indeed They Have ...

Have Institutional Investors Gone Completely Nuts?: [note: IMHO, this is a reflection of what happens when savers are punished and money is free!  Where can one invest money and earn something back?]
Yields on long-term Treasuries have been skidding, despite rising inflation. As I’m writing this, the 30-year Treasury bond yield dropped another 3 basis points today to 3.25%. That’s the yield investors are eager to lock in for the next 30 years. Yet the Consumer Price Index is now 2.1% higher than it was a year ago and gaining upward momentum. Thirty years is a very, very long time, and normally, sane investors would want to be compensated for the risks associated with it.

But not anymore.

The 5-year Treasury yield at 1.66% is below inflation, guaranteeing investors a loss in purchasing power while allowing the government to borrow for free (or rather, at a profit).

This has been the goal of the policies the Fed has been inflicting on fixed-income investors: financial repression. It occurs when fixed-income investors go nuts because they’re forced – there not being any other options for them – to buy investments that are guaranteed to lose them money after inflation or, to get a slightly higher yield, take on risks that may wipe them out.

And the difference between 5-year and 30-year Treasury yields, the yield spread, is down to 1.59 percentage points, the lowest since February 2009 – the flattest yield curve since then – a time when all heck had broken lose, and financial markets were going haywire.

On the front end of the yield curve, investors have been eaten alive by inflation. But now they’re ever so slowly – and probably way too slowly – beginning to price in rate increases by the Fed. On the long-end of the yield curve, the opposite has been happening. Which leaves a lot of people scratching their heads.

Long-term yields are said to be impacted by notions of where the global economy might be heading, with low yields indicating there’s a consensus among institutional bond buyers that global growth is sinking into quicksand. But this nexus is very tenuous, and other factors are likely at play. But what are these institutional investors so worried about? Or have they been driven completely nuts?

“But who the heck is still buying?” grumbled Cali Money Man, a wealth manager at a megabank who has been on the job during the past three crashes, and one of the guys who has been scratching his head over the issue.

“If Street estimates of rates – i.e., GDP and inflation – are correct, long Treasuries have a large negative 1-year expected return,” he said. “Even more so over the following few years, as the Fed increases rates.”

It should turn rational investors – which is what institutional investors are supposed to be – away from those reeking securities. But no.

“I doubt it’s a flight to safety,” he said. “Assets with expected negative 1-year returns are not safe.”

Hard to argue with, if “safe” is defined as not losing money.

“At worst, they’d buy the 1-year or 2-year, or maybe the 5-year, but not the 30-year,” he said. Not at these yields.

This hasn’t been lost to UBS, the world’s largest wealth manager. It is “very worried” about “the lack of liquidity” that could wreak havoc during the expected sell-off. So UBS reduces risk “over the full spectrum of assets.” Read…. UBS Warns Everything Is Overpriced, Prepares For Sell-Off

Bail-Ins Coming Soon?

Remember, what happened in Greece was a test run for bail-ins.  Recall also, as I've said on this blog before (sorry, I don't have the time to search and post the link, but it's there!), that the money YOU place in a bank, is no longer YOURS.

This will happen, I assure you, but I just don't know when:  Bank Of England Leads Push For Deposit Confiscation - Japan, China, Russia Against Bail-Ins:

Bank of England officials led by Mark Carney, the Bank of England governor, are attempting to bridge sharp differences among leading G20 countries as they prepare a landmark set of proposals aimed at tackling the problem of “too big to fail” banks according to the Financial Times today.

Talks under the auspices of the global Financial Stability Board (FSB) over the summer are approaching a key stage as officials aim to clinch an agreement on bail-ins and the bailing in of creditors including depositors of banks.

Finance officials are hoping to pave the way for proposals to be tabled at the G20 leaders meeting at the Brisbane summit in November.

The issue is of major consequence to globally systemic lenders such as Citigroup, Barclays and BNP Paribas, as some will have to issue billions of dollars of fresh bonds earmarked to carry losses.

The issue is of major consequence also to depositors who could see their savings confiscated as happened in Cyprus.

The complexity of the topic and differences between countries’ legal regimes and corporate structures are raising questions over how detailed any framework will be.

Japan is one of the countries with problems with bail-in plans amid concerns that they are not easily compatible with the structure of its banking system. Its banks are heavily deposit-funded, and officials are uncomfortable about the idea of bail-ins.

Japanese banks are already vulnerable and bail-ins could hurt consumer sentiment in the already struggling Japanese economy. Concerns in Tokyo are said to be sufficiently profound for it to push its case right up to the summit itself.

China is also sceptical about the notion of private sector bail-ins given its banks are state-owned. “There are some very entrenched positions,” one official told the FT.

Russia is likely to oppose the coming bail-in regime as well as many other large creditor nations. Mr Carney, who also chairs the FSB, said in March he wanted to “break the back” of the too big to fail issue this year. He said regulators sought by Brisbane to have cracked two major issues – on the loss absorbing capacity that big banks have to hold and on contractual provisions in derivatives contracts.

Bail-ins are coming to banks in the western world with consequences for depositors.

Must read guide to and research on deposit confiscation and banks that are vulnerable to deposit confiscation can be read here:   Protecting Your Savings In The Coming Bail-In Era

Quote of the Day (And It's a Stunner!)

" ... we should never assume that we few at the top have more insight or power but should try to mobilize the intelligence and creativity of the many thousands of our people so as to create unrivaled value." - Li Keqiang, Chinese Premier

Source: Chinese Premier Li Admits Central Planning May Not Be Optimal

This from a communist!  Hayek and Mises must be laughing from above!

My Favorite (Best?) Economic Performance Index ...

From ZeroHedge comes The Baltic Dry Index Collapses To 18-Month Lows; Worst July Since 1986:

The bulls will ignore it, shrugging that it's merely over-supply of ships that the resurgent world economy will quickly soak up as it 'recovers'... However, World GDP growth expectations are collapsing, trade volumes are slowing, and the Baltic Dry Index has continued to slump to its lowest since the start of January 2013 (a holiday period). For some context, this is the lowest July level for the Baltic Dry since 1986... "noise"

There's this...

and then there's this...

Which is the worst July level for the global shipping index since 1986...

And if you think the market is just ignoring this... think again... The bonds of CMA CGM - France's largest world wide shipping firm - are tumbling...

Of course - H2 [sic .. I think it's supposed to be Q2] will be great and this is just a 13-month dump of noise...

Detroit: Then and Now (Way Cool!)

THEN & NOW: Watch Detroit change before your very eyes[HT: Mark J. Perry]

While I'd love to see something like this for Philadelphia, the city that is most like Detroit, if not worse, is Camden N.J., just across the Delaware River from Philly.  As I've mentioned on this blog before, Detroit holds a special place in my heart, as I spent many a summer in Northville, going to Detroit often, especially to go boating on Lake St. Clair with my uncle and cousins.  Priceless.

Walter E. Williams Asks ...

Earlier this month, the 50th anniversary of the Civil Rights Act was celebrated. During the act's legislative debate, then-Sen. Hubert Humphrey, responding to predictions, promised, "I'll eat my hat if this leads to racial quotas." I don't know whether Humphrey got around to keeping his promise, but here's my question: Is it within the capacity of black Americans to make it in this society without the special favors variously called racial preferences, quotas, affirmative action and race-sensitive policies? What might a "yes" answer to that question assume and imply about blacks? Likewise, what would a "no" answer assume and imply? Let's look at it.

There are some areas of black life in which excellence can be found without the slightest hint of racial preferences. Young blacks dominate basketball, football and some track-and-field events despite the fact that there has been a history of gross racial discrimination in those activities. Blacks are also prominent in several areas of the entertainment industry. Those observations mean that racial discrimination alone is not an insurmountable barrier to success. By the way, I can't think of any two fields with more ruthless competition.

You say, "OK, Williams, everyone knows about the success of blacks in sports and entertainment, but what about the intellectual arena?" A few inner-city junior high and high schools have produced black champion chess players, schools such as Philadelphia's Roberts Vaux High School and New York's Edward R. Murrow High School. Last year, two black teens — from Intermediate School 318 Eugenio Maria de Hostos in Brooklyn, New York — won the national high-school chess championship. All of this is in addition to quite a few black international masters and grandmasters in chess. Moreover, there's a long list of former and current black inventors and scientists. So there's no question that black people have the capacity to compete intellectually.

Civil rights organizations and their progressive allies, who all but suggest that blacks cannot achieve unless they are given special privileges, grossly insult and demean black people.

But worse than that, when civil rights organizations and their progressive allies pursue special privileges for blacks in college admissions and when they attack academic performance standards as racially discriminatory, they are aiding and abetting an education establishment that delivers fraudulent education. They let educators off the hook, thereby enabling them to continue to produce educational fraud.

You say, "What do you mean by educational fraud, Williams?" There are many inputs to education that are beyond the control of educators, such as poor home environment, derelict parental oversight and students with minds alien and hostile to the education process. But there's one thing entirely within the control of the education establishment. That is the conferral of a high-school diploma. When a school confers a diploma upon a student, it attests that the student has mastered the 12th-grade levels of reading, writing and arithmetic. If, in fact, the student cannot perform at the seventh- or eighth-grade levels, the school has committed gross fraud. Even worse is the fact that black people, including those holding fraudulent diplomas, are completely unaware. It has absolutely nothing to do with racial discrimination. In fact, black education is the worst in cities where blacks have been the mayor, chief of police and superintendent of schools and where most of the teachers and principals are black.

Racial preferences in college admissions give elementary schools, middle schools and high schools a free hand to continue their destructive educational policy. If colleges did not have special admissions practices for black students, there would be far fewer blacks in colleges, and the fraud would be more apparent to parents. They might begin to ask why so many blacks with high-school diplomas could not get into college.

If the civil rights establishment and the progressives have their way, blacks will have to rely on special privileges in perpetuity.

Monday, July 21, 2014

A Libertarian Foreign Policy for the U.S.

Another must-read, this time from Reason's Nick Gillespie entitled After Bipartisan Bush-Obama Blundering, Let’s Try a Libertarian Foreign Policy: [emphasis is mine]

Don’t believe haters like Rick Perry and Chris Christie. A libertarian foreign policy is the only cure for what ails us abroad.

After two long, drawn-out, bipartisan, and totally lost wars in Afghanistan and Iraq that aren’t even over yet, it’s finally clear exactly why American foreign policy has gone so tragically wrong in the 21st century.

The culprit, at least according to the leading lights of the Republican Party and the Obama administration, is what Gov. Chris Christie excoriated last summer as “this strain of libertarianism that’s going through both parties...a very dangerous thought.”

Libertarians, says Gov. Rick Perry, are just nouveau isolationists and “isolationist policies make the threat of terrorism even greater.” Writing in National Journal, Washington Post columnist and former George W. Bush speechwriter Michael Gerson compared libertarian pols like Sen. Rand Paul to isolationist Sen. Robert Taft, who notoriously opposed American intervention in World War II and attacked the Nuremberg Trials as illegitimate.

You got that? It’s not our go-it-alone crusaderism and robust military presence all over the world that has managed to lower America’s “favorability” in the eyes of longtime allies and client states such as Britain, Germany, Japan, and Egypt. It’s our hypothetical willingness to stop being globo-cop that’s the issue, not our very real attempts to nation-build and even region-sculpt in parts of the world that have asked us to leave.

To hear the Dick Cheneys and Rick Perrys and John McCains of the world tell it, folks such as Paul, who explicitly calls for military, economic, and political “containment” of “radical Islam,” are “curiously blind,” desperate to withdraw to a “Fortress America,” and just flat-out “crazy.”

Forget for the moment that under both Republican and Democratic commanders-in-chief, libertarians had exactly zero influence on foreign policy—except perhaps for Paul’s leading role in scuttling Obama’s attempt to enter the Syrian civil war last fall.

“Isolationism is not an option,” Obama told the graduating class of West Point earlier this year in a speech that, like most commencement addresses, was mercifully being forgotten even as it was being delivered. Every problem doesn’t have a military solution, explained the man who tripled troop strength in Afghanistan to no observable change in the fortunes of the war there and dispatched planes and people to Libya for...what reason again?

No, said Obama, every problem doesn’t have a military solution, but that doesn’t mean we can’t go to war without notifying Congress or worrying about what it will cost in lives and dollars. Obama’s speech was a meringue of meaninglessness, and in that sense was a perfect encapsulation of his disastrous foreign policy.

America will act in concert with the nations of the word, said Obama, except when it doesn’t want to. Because lots of people die in war, we’ll act only when U.S. national interests are at stake.

But global warming is a national interest and “America’s support for democracy and human rights goes beyond idealism—it is a matter of national security.” So that’s why U.S. special forces were dispatched to Nigeria (even before that country approved such a helping hand) and why American soldiers are traipsing around Africa looking for warlord Joseph Kony.

And troops—well, advisers—are going back to Iraq, six years after this president was elected on a promise to get us out of there.

Obama’s foreign policy certainly hasn’t lacked for the use of force. It has, however, lacked for successes, as became clear during an unintentionally hilarious yet telling State Department press conference in May. State’s Jen Psaki said that, in her view, “the president doesn’t give himself enough credit for what he’s done around the world.”

“Credit for what?” one reporter interrupted. “I’m sorry, credit for what?” The others in the room started laughing.

Around the same time, NBC’s Richard Engel, who is not known as a staunch critic for the administration, was asked to name a few countries with which relations have improved under Obama. His reply? “I think you would be hard pressed to find that...I think the reason is our allies have become confused."

First under Bush and now under Obama, the one constant in American foreign policy is a lack of any conceivable constraint on whatever the president deems expedient at any moment in time. This is disastrous, especially when it comes to military and covert actions, because it precludes any serious public discussion and prioritization.

That’s not just bad for the U.S. It’s also bad for our allies, who have no framework by which to structure their own actions and expectations. The president is allowed to both declare red lines and then to ignore them when they are crossed, to dispatch troops or planes or supplies according to whim. In all of this, Obama in no way represents a break from Bush, but perfect continuity.

As The Daily Beast’s Eli Lake wrote for Reason back in 2010, the roots of this particularly strident new sense of imperial power can be traced back to the authorization of use of military force (AUMF) signed into law just a few days after the 9/11 attacks.

“Just as President Bush said the 9/14 resolution gave him the wartime powers to detain, interrogate, capture, and kill terrorists all over the world,” wrote Lake, “so too does President Obama.” Until recently—and because of pushback from characters such as Rand Paul, his fellow Republican Sen. Mike Lee, and Democratic Sen. Ron Wyden—Congress has been especially deferential to all aspects of executive power when it comes to foreign policy and war-making.

The results are plain to see in the still-smoldering battlefields across the globe and the rapidly deteriorating situations in places as different as Ukraine, Egypt, and even the U.S. border with Mexico. When the executive branch has carte blanche to act however it wants, it can’t act effectively.

What would be a better foreign policy than what we’ve seen over the past 14 or so years? It’s tempting to say, Anything, anything at all. Certainly, at least this much makes immediate sense: The United States should in fact withdraw militarily for good from Iraq and Afghanistan, especially if those countries’ governments implore us to do so. And there are allies in both regions that we should continue to support not just morally, but materially and militarily.

All large-scale and long-term military engagements should actually be put to a specific congressional vote as dictated both by the Constitution and by common sense. The use of military force should be governed not by a set of infinitely expandable terms such as ensuring human rights and expanding democracy, but far narrower and less grandiose ideals of national defense.

As Rand Paul wrote recently in a response to criticisms from Rick Perry and other Republicans, “Anytime someone advocates sending our sons and daughters to war, questions about precise objectives, effective methods and an exit strategy must be thoughtfully answered.”

Most importantly, foreign policy should not be reduced to a synonym for military action and covert operations. The most powerful weapon the United States has for expanding peace and enlarging prosperity has nothing to do with guns and bullets and everything to do with the way in which we have created a nation of 300 million-plus people who generally get along peacefully while pursuing radically different visions of the good life.
To the extent that we share our culture and commerce with the world rather than our drones and disdain, we will not only protect ourselves more effectively, we will actually help more people.

During the Cold War, the United States wasted millions if not billions of dollars on highly mannered, pathetic “cultural exchanges” designed to show that the “free world” could compete against communism in areas such as chess, and classical music. Yet no dissidents ever named a revolution after piano prodigy Van Cliburn; they named their revolution after the Velvet Underground.

Whatever else you can say about radical Islam, it won’t survive an onslaught of prosperity and self-determination for the oppressed peoples of the Middle East. In this it is no existential threat to the United States or the West more broadly.

Similarly, the United States and the West beat back the Russian threat when it was able to focus all elements of its society on beating us like one of Khrushchev’s old shoes. There’s no reason to believe that Putin’s sclerotic basket-case of a country will be tap dancing down Pennsylvania Avenue anytime soon.

For the entirety of the 21st century, leading Democrats and Republicans have shown their inability to conduct foreign policy as anything other than unmitigated disaster. If a libertarian alternative—one that emphasizes cultural and economic exchange and uses military intervention as a limited, last-best-option that should be explicitly sanctioned by Congress—strikes you as immature and unlikely to succeed, that says more about your powers of self-delusion than you’ll ever understand.