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Aug 13

Today’s News 13th August 2017

  • Charlottesville is a Symptom of a Much Greater Problem in America Today

    Content originally published at iBankCoin.com

    So I was walking around Maine today, without a phone, totally unplugged from the world. Since I’m a personable person, quite affable at times, I conversed with lots of strangers, many people who might disagree with my ‘world view.’ Although I have strong opinions, I’m mature enough to know my ideas are meaningless time fodder, the result of theories concocted through emotional and cognitive experiences. Too many Americans actually think their ideas matter. They’re told this lie by the media and their politicians all the time, in an effort to trick people into thinking we live in a participatory democracy. Everyone is trying to ram their ideologies down the necks of others, which of course results in backlash.

    The vast majority of people just want to larp around, drink something strong, and procreate. I can’t think of the last time when I thought discussing politics was a good idea for casual conversation. I did it more when I was younger, filled with vigor — stuck in the amber of idealism. I’ve always felt dreadful after engaging in political debate — even with people who totally agreed with me. It’s a time sink down the hole of extreme negativity and only serves to make people angry.

    Why?

    Because government can never please everyone, which is why I believe the less government, the better.

    The connectivity of our phones and social media, amplified by the media, has turned total imbeciles into activists. These people are sick and have nothing better to do than foment strife. The ‘white supremacists’ who marched in Virginia yesterday were idiots. They weren’t idiots because they had low IQs or because they wanted to express their opinions, but because they actually took the time out of their day to bring attention to themselves for a negative reason. What did they think was going to result from this?

    A great man once told me, ‘if it doesn’t generate revenue, I’m not interested.’ He’d actually say that to total strangers at a bar, ordinary men asking for the time or if he had watched some sports game on the tube, which caused him to get punched hard in the face more times than I can remember. But it’s a good way to live, if you think about it.

    I’d like to tie this up in a pretty bow and simply say ‘we’re all so different and America can never truly come together because of idealogical differences.’ But that’d be false. The core issue here isn’t politics, or racism, or identity politics, but the fact that ordinary citizens are getting wound up by social engineers, who are seeking to divide people, bringing out the ugliest in people. We’re all ugly, in one way or another — some uglier than others. When Americans work together and leave out politics, we produce beautiful, life changing, things. But it seems every god damned news report I read these days is talking about an angry white man, a violent black man, or an evil Russian. Naturally, if you keep fucking with people’s emotions and pride, bad things will happen.

    I won’t say the news needs to accentuate the positive things in life — because they have a business to run. What I am saying, however, is that the combination of having everyone with a phone and social media account wanting to be a celebrity, coupled with an atmosphere of purposeful divisiveness, is a toxic, if not deadly, combination. At some point, I hope all people will realize that it isn’t Joe from down the block that is the problem — but Jim in DC messing up America’s legacy.

  • When The Grid Goes Down…

    Authored by Jeremiah Johnson (nom de plume of a retired Green Beret of the United States Army Special Forces) via ReadyNutrition.com,

    Let’s just say that the unthinkable becomes the real and happening.  Let’s take this article and go over it.  This will be a segment in three parts, the next ones being immediate actions taken at work and at home.  I’m hitting on traveling first, as there are so many vacationers jaunting around happily over the landscape.  All kidding aside, traffic is congested during the summer, extending traveling time on the commutes.  Let’s game the scenario, and here it is.

    Here’s the scenario:

    You’re cruising down the highway in your 2013 four-door sedan, having just dropped the kids off twenty minutes ago to the swim club.  Now you’re on the open highway with a heavy traffic flow…about 5 miles from the edge of town and 7 miles from work.  You’re listening to the radio, when suddenly it crackles and goes dead, along with your engine.  You look around and pumping the brakes manage to slow down and then drive off the road onto the shoulder, just feet away from the back bumper of another vehicle.

     

    The vehicle comes to a stop, and you try the ignition again.  You look at your watch, a Casio G-Shock, to find there is no display.  You reach for your cell phone.  Nothing.  It’s dead.  There are perhaps a dozen cars around you…half to your front and half to your rear.  All of them have stopped, and most of the drivers have gotten out.  You hear the sound of an engine, and looking up, see a ’58 Ford pickup truck weaving in and out of the stalled traffic, moving toward your rear, away from town.  The book “One Second After” has just played out in real life.  The United States has been attacked by an EMP (Electromagnetic Pulse) weapon.  You’re 15 miles from home, and the “S” has hit the fan.

    On Friday 7/29/17, North Korea just successfully tested an ICBM (Intercontinental Ballistic Missile) and experts from four different countries including the U.S. have determined that they have the capability of striking the U.S. anywhere.  That means the optimal point for an EMP strike (dead center of the continental U.S., at 300 km above ground) is not only their prime target but also attainable.

    15 Tips to Get Safely Home Following an EMP

    Back to our scenario.  Most will be clueless and unprepared.  Let’s do it up, down and dirty with the steps that you should take if you are “Citizen X” outlined in the scenario:

    1. Have a plan already in place: That means to formulate one right now, if you haven’t already done so.

    2. If there are a lot of people around, such as in the scenario, then immediately grab your gear and get out of there. What gear, you may ask?  We’ve “gamed” much of this to the point of nausea, but let’s list out those essentials:

    “Go/Bug Out Bag”: This guy already needs to be packed and ready, in that vehicle that will become a 3,000-lb. paperweight. Three days’ supply of ready-to-eat food, one day’s worth of water and the means to filter more.  Compass, flashlight, knife, first aid kit, poncho, jacket/sweatshirt, extra socks, map, light sleeping bag, fire starting material, small fishing kit (hooks, line, bobber), sewing kit, MSW (Minor Surgical Wound) kit, extra cash ($20 denominations and smaller), ground pad, extra clothing (hat, OG bandana, etc.), and ammo. An EMP may be followed by radiological and nuclear consequences. Having an NBC gas mask and anti-radiation pills in your vehicle could be a lifesaver.

    Weapon: Please don’t feed me “legal information,” or “I can’t do that in my state.” These are “sink or swim” rules.  If you don’t have a weapon now, you may not have one later.  If you don’t have the fortitude to take that weapon and be ready to use it when the time comes, then you probably won’t survive this or be able to help your family.  One rifle, one pistol, with ammo for each.

    Grab that bag and put it on, securing your weapons. Then secure the vehicle, closing the windows and locking it up.  If nobody is around, throw it into neutral and push it off the road.  Camouflage it with branches and leaves…taking care not to cut them from the immediate area that you stash it.  Most likely it’ll be “violated,” so now is the time to take the stuff you need and get it out. If the scenario above applies, just secure the vehicle and get out of there.

    3. Traveling: Do not walk on the roads. Skirt the road with about 50 meters (that’s about 150 feet) between you and the edge of the road.  Stay away from people unless you know them and trust them…both qualities are emboldened.

    4. For metro people: If you are out in the suburbs or open road, and you must return to the city? It may be better for you and your family to arrange for a rallying point outside of the city.  If that isn’t possible, then you should exercise extreme caution.  Allow the nearest family member to secure the home and then wait for you.  Travel when it’s dark to be on the safe side.  Your visibility is cut down, and so is the visibility of those who may be hunting you.

    5. Long distance to go? Forage along the way.  Refill your canteens/water bottles whenever you’re able, and take note of any freestanding water supplies or “blue” features (that’s the color of water on a military map) for use in the future.  DON’T MARK YOUR MAP!  If someone gets a hold of it, you do not want them to be able to find your home.  You must commit the route to memory and adjust your steps accordingly.

    6. Dealing with the Stress of the Event: The power is not coming back on…ever…and it really has begun…the Day After Doomsday is here. Take a deep breath and concentrate on your training, your preparations.  If you don’t have any, then this piece is a wake-up call to get moving!  The best way to do it is immediately accepting what has happened without dwelling on it.  Concentrate on the tasks at hand: navigating home, scouting what is in between, and foraging for anything you need.  You have a job to do!  Reconnaissance!  We’ll go over that now.

    Reconnaissance: You must see on the ground what is in between you and the happy Hallmark home you’re returning to. You should take note of any places that hold medical supplies, food, or anything you may need for yourself or your family.  You should take note of possible refuge sites to hide if you and the family hightail it out of the home instead of having a “Walton Family Homecoming.”  You must take note of water features, danger locations (cliffs or impassable terrain features), as well as dangerous individuals.  Yes, the ones who were jerks before all of this?  Wait until you see how they’ll be now, with no controls exercised over them.

    7. The best advice I can give: Travel at night. This may be impossible for several reasons.  Firstly, if it’s an all-out nuke attack, there may be the problem of radiation for you, in which case you’ll have to either reach home immediately or seek shelter immediately to remain in place for several weeks.  Secondly, you may have other family members that need to be attended to and cannot wait for a long time.  The kids in the scenario are a prime example.  If it is an EMP only, there will be a “quiet period” of about 6 to 12 hours before everything breaks loose and the sequel to the movie “The Road” begins in real life.  Darkness is the best time to travel.  It hides you and helps you to cover your tracks until the morning light.

    8.The rest of the family: They must KNOW THE OVERALL PLAN AND HAVE A PLAN OF THEIR OWN TO FOLLOW UNTIL YOU GET THEM OR UNTIL THEY REACH HOME. This is all going to take some preparation on your part and remember the saying: An ounce of prevention is worth a pound of cure.  Don’t put it off!

    9. Avoid people, families, and groups of people. Your goal when traveling is to be invisible.  I wrote some articles on how to hunt and how to avoid the manhunt.  You may want to refresh yourself on those points, and follow a few basic rules I keep in my own mind and heart:

    • When a disaster occurs, everyone is your “friend” even when they are not
    • There is no interest but self-interest outside of you and your immediate family
    • Whatever you need and have, they also need and want
    • They will kill you for the barest of essentials of what you’re carrying
    • Don’t talk to anyone: don’t exchange information, pleasantries, and do not tell anyone anything about yourself, your family, your general destination, or your home…it can be used against you later…and it will be.

    10. Coming home: Don’t walk right on in. Use a roundabout route, and go to a spot where you can watch your house for at least half an hour or so before making your “triumphant return.”  The S has hit the fan, and this is not the return of the Prodigal…you’re just going to tiptoe in.  But before you tiptoe through the tulips and the window, keep in mind that Tiny Tim and his gang of marauders may have done it before you.  That is why you want to watch the house closely.  Best Advice I can give: Have your kids/spouse put up a long-distance-visible sign/signal so that you know everything is either OK or that you’ll have to come in and rescue the family.  For example, if the birdhouse is still on the corner of the porch, then all is well.  If the birdhouse is gone, or if it’s sitting on top of the post that holds the mailbox…well, time to play CQB (that’s Close Quarters Battle) and clear the house of the rats.

    11. Never underestimate anyone’s ability to take your family members hostage: That goes for the “friendly neighbors,” most of all…the biggest rats on the block. If that happens, guess what?  You’re now the HRT (that’s Hostage Rescue Team), or you better have a couple of guys such as this in your survival group/pod/neighborhood unit.  The hardest guy or gal in the world will “cave” when their son or daughter is being held at gunpoint by some goon.

    12. You’re home…Now, it’s time to fight! That’s right!  Just when you thought it would be cozy and comfortable…just you and the family and your happy supplies…here comes a whole bagful of “Gummi Bears” down the block…only these bears are armed with baseball bats, zip guns, chains, and crowbars.  Armed also with about a week of BO (that’s Body Odor), all twelve of them combined still have an IQ of 50, tops…and here they are, at your door.  They don’t want Halloween candy, by the way.  You just walked twenty miles.          Say, remember that article I wrote about using ginseng, and drinking coffee to help you keep alert and awake?  I hope that one comes to mind because it’s about to become a “festival” at your house.  We’re going to cover more on this in the next segment.

    13. Obtain that “second set” of electronic equipment. Oh yeah, the one JJ continuously warns about!  Well, now that all your electronics that were exposed are junk, I hope you made some Faraday cages and stashed an extra one of those radios…or even several, for those of you who thought long-term.  You need to find out what’s going on.  Ham radios may help if you shielded them.  So may CB’s and satellite phones.

    14. Arm the whole family: by the time you reach home, every family member either accompanying you (small children and toddlers excepted) should be armed. Time to really see how tight and full of solidarity you are as a real family unit…one that must fight in order to survive.

    15. Exit stage left: You may just find that the homecoming isn’t; that is, you must write it off as a loss and get out of there…it’s either destroyed and burning or occupied by the marauders. Unless you have the skills and the ability to deal with all of them, it is better to retreat and stay alive.  You need a plan in place in order to make this work.

    We’ve covered a lot of information here.  This is all designed to stimulate those creative thought processes.  The thinking alone is not enough: you must formulate a plan and then implement it.  A plan without action is of no use.  A plan executed too late is a tragedy: a funeral dirge getting ready to play.  Don’t be too late to formulate your plan for you and your family.  If the lights go out, it doesn’t necessarily mean that the party’s over…and the party may be one that never comes to an end.  Fight that good fight each and every day!  JJ out!

  • Error 404: Visualizing The Internet's Digital Decay

    In 2005, one of the most intriguing advertising stunts of the internet age was hatched.

    As Visual Capitalist's Nick Routley explains, Alex Tew launched the The Million Dollar Homepage, where anyone could “own a piece of internet history” by purchasing pixels-plots (minimum of 10×10) on a massive digital canvas. At the price of just one dollar per pixel, everyone from individual internet users to well-known companies like Yahoo! raced to claim a space on the giant digital canvas.

    Today, The Million Dollar Homepage lives on as a perfect record of that wacky time in internet history – or so it seems. However, the reality is that many of the hyperlinks on the canvas are now redirects that send incoming users to other sites, while over 20% of them are simply dead.

    Here are the links that still work on the Million Dollar Homepage today:

    The revealing graphic above, via John Bowers, raises the question – how do hyperlinks disappear, and what implications does this “digital decay” have?

    DIGITAL DECAY

    The internet is stitched together by an incalculable number of hyperlinks, but much like cells in an organism, the sources and destinations have a finite lifespan. Essentially, links can and do die.

    Most “link rot” is the result of website restructuring, or entities going out of business and pulling their website offline.

    A high-impact example of this is when Yahoo! pulled the plug on GeoCities, one of the first popular web hosting services. In one fell swoop, roughly 7 million websites (containing a plethora of animated gifs, auto-playing midi files, and traffic counters) went dark forever.

    Links can also die because of more deliberate reasons, as well. In 2015, the editor-in-chief of Buzzfeed, Ben Smith, came under fire for deleting thousands of posts from the site (including content that was critical of Buzzfeed advertisers). Journalism has traditionally acted as a public record, so this type of “decay” has serious implications on the credibility of media brands.

    WHO CARES?

    This idea of a public record is at the heart of why digital decay is an issue worth addressing. Once millions of links simply burn out, what will people in the future know about society in the early-ish days of the internet? What record will remain of people’s thoughts and feelings in that era?

    I worry that the twenty-first century will become an informational black hole.

    – Vint Cerf, Internet pioneer

    Perhaps more urgent are public records that live in the digital realm. Supreme Court decisions and academia lean heavily on citations to build their arguments. What happens when those citations simply vanish? A Harvard study found that 49% of the hyperlinks in Supreme Court decisions are now broken.

    Even that ubiquitous resource, Wikipedia, has serious issues caused by digital decay. Over 130,000 entries link to dead pages – a troubling development, as linked citations are what lend entries their credibility.

    BACKING UP THE INTERNET

    A handful of people are taking steps to archive the internet.

    The most well-known solution is Internet Archive’s Wayback Machine, which has archived hundreds of billions webpages over the past 20 years. Even the The Library of Congress – which is well known for archiving digital information such as tweets – contracts Internet Archive to do its web crawling.

    The academia-focused Perma is another example of a company looking to create permanent records of the web sources (particularly citations).

    Many of the weird and wonderful forums and hand-coded homepages of early internet lore may be gone, but we’re finally taking steps to combat digital decay. As awareness grows, avoiding an “informational black hole” may be possible.

  • Baltimore Mayor Offers Solution To "Out Of Control" Homicides – Free Community College For All

    Via StockBoardAsset.com,

    Baltimore Mayor Catherine Pugh announces her crime-fighting initiative last Wednesday, portion of which includes free community college. 

    Her answer to a homicide rate that is doubled Chicago’s is free community college for Baltimore youth.

    Here is what she had to say per WBALTV:

    “Community college has become critical in providing the necessary education and training that high school graduates need to pursue a trade or a four-year degree,” Pugh said.

     

    “What we are going to do in Baltimore City is make Baltimore Community College free.”

    Earlier this week, ‘Project Baltimore’ asked this question: How can a high school with zero students proficient in math, have one of the highest graduation rates in Baltimore City? 

    In a stunning interview from one of the masked educators who uncovered this possible great theft of education.. They said, “grade changing. Giving out diplomas to students that did not earn them.”

    So, therein lies a major issue of efficiency in the city. An alleged corrupt school system in Baltimore is handing out high school diplomas like candy to students who have zero proficiency in math. Then the expectation is to push these students into free college in the name of stopping homicides. This does not pass the smell test.

    Perhaps, the problem is much deeper and it starts with deindustrialization of the city and 50-years of democratic controlled leadership. This has forced a shocking facial wealth divide – 1/3 of black households have zero net worth.

    Education Attainment for Black or African American is shocking

    Conclusion:

    Baltimore Mayor Pugh needs a lesson in timeframes. Her holistic approach of free college for Baltimore youth will not solve today’s homicide rate that is doubled Chicago’s. We’re sure Baltimore taxpayers will be thrilled.

  • Al-Qaeda's "Inspire" Magazine Targets US Commuter Trains With Homemade "Derailment Devices"

    The magazine that helped the Tsarnaev brothers pull off the Boston Marathon bombing – while also purporting to teach wannabe jihadis how to “make a bomb in the kitchen of your mom” – is homing in on its next target: America’s crumbling transportation infrastructure.

    “Inspire,” the Al Qaeda propaganda magazine, will dedicate its next issue to America’s passenger and commuter trains. The focus on rail transportation comes at a time of great anxiety over the scarcity of resources devoted to repairing America’s vulnerable trains, which is advantageous to a group aiming to reestablish maximum relevance.

    Derailments in the Bronx, Philadelphia and New York City’s Penn Station have made commuters anxious. The effort to rescue New York City’s deteriorating subway system has been one of the most closely followed stories of the summer, according to the Washington Times.

    “Issue No. 17 is headlined, “Train Derail Operations,” and will spell out ways to create rail disasters in a transportation system that lacks the stiff security procedures of airline travel.

     

    It’s competing Sunni extremists group, the Islamic State, for more than a year has advocated using vehicles to mow down innocents. Its murderous followers have weaponized vehicles in Nice, Berlin and London, creating hundreds of deaths and injuries.

     

    Adding trains to the terrorist’s priority list would put at risk virtually every mode of transportation and placed added pressure on the U.S. Department of Homeland Security.”

    Furthermore, two of the deadliest terror attacks in European history were carried out on public commuter trains. The 7/7 London tube bombing, when four suicide bombers killed 52 people on the London Underground. And the Madrid train bombings, when a terrorist cell linked to Al Qaeda killed nearly 200 people on a Madrid Cercanias train. Now Al Qaeda wants to replicate those attacks in the US.

    A “trailer” for the new issue was being shared on the social-media app Telegram, a popular venue for sharing extremist content that has often been used by terrorists for recruiting.

    The Middle East Media Research Institute (MEMRI) put out a report on Friday saying al Qaeda has teased the Inspire articles with a trailer appearing on Telegram app channels operated by its fans.

     

    “The trailer highlights that derailments are simple to design using easily available materials, that such a planned attack can be hard to detect, and that the outcome can substantially damage a country’s transportation sector and the Western economy in general,” MEMRI said.

    The New York City subway is featured in the promotional video, which depicts derailment devices that the narrator says could easily be attached to tracks, causing a derailment.

    “Simple to design,” the promo says in English script, mentioning “America” several times. “Made from readily available materials. Hard to be detached. Cause great destruction to the Western economy and transportation sector.”

    The magazine’s push is part of a rebranding effort for Al Qaeda as the group seeks to regain the upper hand in recruiting from ISIS, which was recently driven out of Mosul, and has also suffered other setbacks like the death (and miraculous rebirth) of the group’s founder, Abu Bakr al-Baghdadi. Al Qaeda, which is trying to reassert itself by forging alliances with other jihadist groups outside its home in South Yemen, wants to revive its formerly fearsome reputation…and the most effective method would involve an attack.
     

  • North Korea Says Army Is "On Standby Waiting For An Order Of Attack"

    Global markets are closed for the weekend, so we will need to wait until tomorrow evening to see how investors react to the latest back-and-forth between the North Korean government and President Donald Trump. In North Korea’s latest salvo in its war of words, a state-run newspaper declared in an editorial that the country’s Paektusan army is now “on standby to launch fire into its [the US’s] mainland, waiting for an order of final attack."

    The comments follow a Friday report from KBS World Radio, the official international broadcasting station of South Korea (which is owned by the Korean Broadcasting System), that "North Korean authorities have dispatched emergency standby orders to the leaders of the ruling Workers’ Party committees and civil defense units."

    Here’s more from Fox News:

    “North Korea took its turn Saturday in the country’s escalating, back-and-fourth with President Trump, with the state-run newspaper saying leader Kim Jung Un’s revolutionary army is “capable of fighting any war the U.S. wants.”

    The assertion was made in an editorial that also states the Paektusan army is now “on the standby to launch fire into its mainland, waiting for an order of final attack."

     

    The editorial also argues that the United States ‘finds itself in an ever worsening dilemma, being thrown into the grip of extreme security unrest by the DPRK. This is tragicomedy of its own making. … If the Trump administration does not want the American empire to meet its tragic doom in its tenure, they had better talk and act properly.’”

    Late last week, in a response to domestic criticism about Trump’s bellicose commentary, the president said that his rhetoric concerning North Korea – particularly his now infamous promise to respond with “fire and fury and…power” if North Korean leader Kim Jong Un continues to threaten the US – may not have been “tough enough.”

    * * *

    Fox also reported that Chinese leader Xi Jinping pleaded with Trump to tone down his rhetoric during a Friday night phone call with the US president.

    “During Trump’s phone conversation Friday with Xi, the Chinese leader also requested that the U.S. and North Korea tone down their recent rhetoric and avoid actions that could worsen tensions between the two nations, Chinese Central Television reported.

     

    ‘At present, the relevant parties must maintain restraint and avoid words and deeds that would exacerbate the tension on the Korean Peninsula,’ Xi was quoted as saying.”

    As we noted last night, it doesn’t look like Xi was able to sweet-talk Trump into once again delaying an investigation into China’s trade practices that many expect will lead to an all-out trade war between the world’s two largest economies. China is North Korea’s only major benefactor, and is responsible for 90% of the country’s foreign trade. Trump’s decision comes despite an IMF warning last month that “inward-looking” policies could derail a global recovery that has so far been resilient to raising tensions over trade. We also have noted the tendency, throughout history, for trade wars to blossom into the real thing…

    Indeed, it seems that relations between the two world powers are deteriorating once again even after Trump praised China for signing off on the latest round of UN Security Council sanctions against the North – which are expected to reduce North Korea’s exports by more than $1 billion.

    But despite Xi’s repeated jawboning and half-hearted promises to act, China has so far been reluctant to take meaningful action to curb North Korea’s nuclear program. Now any effort would probably be too little, too late, as the US and Japan now believe the North has developed a nuclear warhead small enough to fit inside on of its ICBMs. This newfound capability could allow the North to deliver a nuclear payload to the US mainland – a fact that was not lost on global markets this week.

    The escalating tensions between NK and the US – particularly Kim Jong Un’s threat to launch a missile at Guam, a US island territory in the Pacific – helped keep the S&P 500 below its 50DMA for the longest stretch since April

    …and the Chinese VIX to its highest level of the year.

    On Monday, we will learn if US investors are sufficiently terrified to dump stocks…or if “buy-the-f**king-all-out-nuclear-war-dip becomes the mantra of the day.
     

  • If War Comes, Don't Blame The "Military-Industrial Complex" – It's Much Worse Than You Think

    Authored by James George Jatras via The Strategic Culture Foundation,

    As the drumbeat intensifies for what might turn out to be anything but a «splendid little war» against North Korea, it is appropriate to take stock of the ongoing, seemingly successful effort to strip President Donald Trump of his authority to make any foreign and national security policies that fly against the wishes of the so-called Military-Industrial Complex, or MIC. A Google search for «Military-Industrial Complex» (in quotation marks) with «Trump» yields almost 450,000 hits from all sources and almost 26,000 from just news sources.

    During the 2016 campaign and into the initial weeks of his administration, Trump was sometimes described as a threat to the MIC. But over time, with the appointment to his administration of more generals and establishment figures (including some allegedly tied to George Soroswhile purging Trump loyalists, it’s no surprise that his policies increasingly seem less a departure from those of previous administrations than a continuation of them (for example, welcoming Montenegro into NATO). Some now say that Trump is the MIC’s best friend and maybe always was. 

    There are those who deny that the MIC exists at all. One self-described conservative blogger writing in the pro-war, pro-intervention, and mostly neoconservative National Review refers to the very existence of the MIC as a «myth» peddled by the «conspiracy-minded». Sure, it is conceded, it was appropriate to refer to such a concept back when President Dwight Eisenhower warned against it in 1961 upon his impending departure from the White House, because back then the military consumed some 10 percent of the American GDP. But now, when the percentage is nominally just 3.2 percent, less than $600 billion per year, the term supposedly is inapplicable. (There are those who argue that the real cost annually is over $1 trillion, but why quibble.) 

    There is a germ of truth contained in the reference to money. Compared to the «wars of choice» that have characterized US global behavior since the end of the Cold War with the Soviet Union, the MIC of the 1950s and 1960s was relatively less likely to embark upon foreign military escapades. The existence of a world-class nuclear-armed foe in the form of the USSR moderated tendencies toward adventurism. The most serious «combat» the classic MIC preferred to engage in was inter-service battles for budgetary bounty. Reportedly, once General Curtis LeMay, head of the Air Force’s Strategic Air Command, was briefed by a junior officer who repeatedly referred to the USSR as «the enemy». LeMay supposedly interrupted to correct him: «Young man, the Soviet Union is our adversary. Our enemy is the Navy». 

    But today the «Military-Industrial Complex» is an archaic term that doesn’t begin to describe the complexity and influence of current structures. Indeed, even in Eisenhower’s day the MIC was more than a simple duplex consisting of the Pentagon and military contractors but also included an essential third leg: the Congressional committees that provide the money constituting the MIC’s lifeblood. (Reportedly, an earlier draft of the speech used the term «military-industrial-Congressional» complex, a fuller description of what has come to be called the «Iron Triangle». Asked about the omission from the final text, Eisenhower is said to have answered: «It was more than enough to take on the military and private industry. I couldn't take on the Congress as well».) 

    Not only did the Iron Triangle continue to expand during the Cold War, when production of military hardware established itself as the money-making nucleus of the MIC, it swelled to even greater proportions after the designated enemy, the USSR, went out of business in 1991. While for one brief shining moment there was naïve discussion of a «Peace Dividend» that would provide relief for American taxpayers from whose shoulders the burden of a «long twilight struggle» against communism (in John Kennedy’s phrase) had been lifted, that notion faded quickly. Instead, not only did the «hard» side of the MIC maintain itself – first in Iraq to fight «naked aggression» by Saddam Hussein in Kuwait, then in the Balkans in the 1990s as part of NATO’s determination to go «out of area or out of business» – it then branched out into «soft» areas of control.

    In the past quarter century what began as Eisenhower’s MIC has become a multifaceted, hybrid entity encompassing an astonishing range and depth in both the public and private sectors. To a large extent, the contours of what former Congressional staffer Mike Lofgren has called the «Deep State» (which largely through Lofgren’s efforts has since become a household word) are those of the incestuous «expert» community that dominates mainstream media thinking but extend beyond it to include elements of all three branches of the US government, private business (especially the financial industry, government contractors, information technology), think tanks, NGOs (many of which are anything but «nongovernmental» but are funded by US official agencies and those of our «allies», satellites, and clients), higher education (especially the recipients of massive research grants from the Department of Defense), and the two political parties and their campaign operatives, plus the multitude of lobbyists, campaign consultants, pollsters, spin doctors, media wizards, lawyers, and other functionaries. 

    Comparing the MIC of 1961 to its descendant, the Deep State of today, is like comparing a horse and buggy to a Formula One racecar. The Deep State’s principals enjoy power and privileges that would have brought a blush to the cheeks of members of the old Soviet nomenklatura, of which it is reminiscent. 

    Indeed, the Deep State’s creepy resemblance to its late Soviet counterpart is manifest in its budding venture into the realm of seeking to brand domestic American dissent as treason, to the hearty approval of the loony Left. As described by Daniel McAdams of the Ron Paul Institute for Peace and Prosperity

    ‘The government would never compile, analyze, and target private news outlets just because they deviate from the official neocon Washington line.

     

    ‘Perhaps not yet. But some US government funded «non-governmental» organizations are already doing just that.

     

    ‘The German Marshall Fund has less to do with Germany these days than it did when founded after WWII as a show of appreciation for the US Marshall Fund. These days it’s mostly funded by the US government, allied governments (especially in the Russia-hating Baltics), neocon grant-making foundations, and the military-industrial complex. Through its strangely Soviet-sounding »Alliance for Securing Democracy» project it has launched something called «Hamilton 68: A New Tool to Track Russian Disinformation on Twitter».

     

    ‘This project monitors 600 Twitter accounts that the German Marshall Fund claims are «accounts that are involved in promoting Russian influence and disinformation goals». Which accounts does this monitor? It won’t tell us. How does it choose which ones to monitor? It won’t tell us. To what end? Frighteningly, it won’t tell us.

     

    ‘How ironic that something called the German Marshall Fund is bringing Stasi-like tactics to silence alternative media and opinions in the United States!’

    The Soviet nomenklatura gave up without a fight. It’s unlikely its American counterpart will. Whether Trump in the end decides to fight or to seek accommodation is still under debate. Some suggest that by signing the recent bill imposing sanctions on Russia, Iran, and North Korea, he has already surrendered. But either way, war or not, things are going to get very rocky.

  • Elon Musk Doubles Down On AI Scare: "Artificial Intelligence Vastly More Risk Than North Korea"

    With the world's attention focused on the Korean Peninsula and the growing threat of global thermonuclear war, Tesla CEO Elon Musk has bigger things to worry about. In a series of 'alarming' tweets on Friday, Musk warned the world should be more worried about the dangers of artificial intelligence than North Korea.

    Having unveiled his apocalytpic vision of the world a few weeks ago…

    “Until people see robots going down the street killing people, they don’t know how to react because it seems so ethereal,” he said.

     

    “AI is a rare case where I think we need to be proactive in regulation instead of reactive. Because I think by the time we are reactive in AI regulation, it’s too late.”

     

    “Normally the way regulations are set up is a while bunch of bad things happen, there’s a public outcry, and after many years a regulatory agency is set up to regulate that industry,” he continued.

     

    “It takes forever. That, in the past, has been bad but not something which represented a fundamental risk to the existence of civilization. AI is a fundamental risk to the existence of human civilization.”

    Musk was quickly admonished by another Silicon Valley billionaire as Mark Zuckerberg suggested Musk is exaggerating, noting:

    “I have pretty strong opinions on this. I am optimistic. I think you can build things and the world gets better. But with AI especially, I am really optimistic.

     

    “And I think people who are naysayers and try to drum up these doomsday scenarios — I just, I don't understand it. It's really negative and in some ways I actually think it is pretty irresponsible.”

    And while the feud grows…

    Musk took to Twitter to turn the fearmongery amplifier to '11'…

    “If you're not concerned about AI safety, you should be. Vastly more risk than North Korea,” he tweeted.

     

    “Nobody likes being regulated, but everything (cars, planes, food, drugs, etc.) that's a danger to the public is regulated. AI should be too,”

     

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    His stark warning came at a time when the US and North Korea remain on heightened alert amid spiraling tensions on the Korean Peninsula. Earlier this week, both sides degenerated to open threats, demonstrating readiness to use coercive force if provoked to do so.

     

    But Musk appeared to be more frightened by artificial intelligence, a rising phenomenon he is willing to put under control.

    We look forward to Mr. Zuckerberg's response.

  • A Thought Experiment On Why Wages Are So Weak

    By Steven Englander, head of research and strategy at Rafiki Capital Management

    I propose a microeconomic rationale for why macro wage performance is so weak, despite tight labor markets. The idea is that we are getting paid less for our job-specific knowledge because technology is making it easier to replace us without major loss of productivity with less skilled workers. The implications for markets:

    • Flattish Phillips curve and low wage inflation continue for an indefinite period
    • Living standards may increase because of lower price relative to wages, not higher wages relative to prices
    • Monetary policy will have to get on with dealing with a low inflation economy — this means setting aside obsessions about balance sheet reduction and setting up the facility to use fiscal policy as needed when the zero bound is approached
    • It’s relatively positive for equities in innovating sectors
    • Long-term bond yields will be driven by monetary policy fears, not long-term inflation worries
    • Short-term policy rate moved will be capped by the sensitivity of the economy to interest rates which may not be large. Note that this cuts both ways – both tightening and easing may be ineffective.

    The thought experiment

    My idea is that wages are driven by how scared your boss is that you are going to leave. If replacing you, retraining your successor and waiting for him to climb the experience curve is costly, he will pay a lot to keep you from leaving. If you are a cog in a wheel, then he won’t care much.

    Imagine an economy of a bus driver, a taxi driver, a cook, a translator, a baby sitter, a doctor and a foreign exchange strategist…. Conceptually you can measure average job specific content by asking the following question: if you randomly reallocated jobs among these workers how much would productivity fall? For example, if the FX strategist was given the cook’s job and the cook became a doctor and the doctor a taxi driver and so on, what would happen?

    Say in Economy A, there is specific knowledge or character traits needed: a bus driver needs the specifics of driving a bus safely, a taxi driver knowledge of the street grid, the translator an excellent command of relevant languages, the baby sitter some proven degree of responsibility, the cook of recipes and technique, the doctor the body of medical knowledge, the FX strategist how to say ‘current account’ and so on. Now imagine the chaos and productivity loss, if the random reallocation occurred and none of the occupants of new jobs had the required skills.

    Now, say in Economy B, the bus is programmed to avoid dangerous manoeuvres, all taxi drivers have a GPS (unlike NYC where none seem to), the translator has automated translation at his fingertips, the baby sitter is aware the house and liquor cabinets are cameraed, the cook has a set of packets to mix (or almost equivalently the packets are sent to your home for you to mix), the doctor a diagnostic program and the FX strategist a chatty virtual assistant that can say ‘current account’. If a random job reallocation occurred in this economy the productivity loss would be much less. My conjecture is that wages would be lower
    because there would be no need to bid to retain workers if they were readily substitutable, or if the same jobs could be filled with less specialized workers with no major productivity loss.

    Wage compression is very likely to be a feature in Economy B relative to Economy A – that is, the premium one receives for job specific knowledge and experience would fall. If you throw in a bit of capital saving technological progress from the sharing economy and economies of scale from the low marginal cost of replicating many IT-based innovations, you could end up with a kind of immiserization of parts of the skilled and semi-skilled working classes.

    Evidence is partial, but it is not straight forward to test this speculation. Figure 1 shows wage levels in selected industry groupings. Note that wages in motor vehicles and parts (bright blue) started way above over industries, but is now average for durable goods (red line) and below education and health services (green line) which started way below. Motor vehicles and parts are now way below the average wage in the private sector, having started above 50% higher in the 1990s.

    In Figure 2 we index these industries to 100 in 2000. We note that wages in leisure and hospitality (light blue) and education and health (green) have both grown faster than in durables manufacturing (red) and above the average for all private industries. Vert similar patterns emerge if we index to 2011.

    So wages have grown slower in high paying industries, faster in low paying industries and the net is the mediocre observed wage growth. What isn’t consistent is Atlanta Fed wage evidence that suggests the quit rate is back to normal for this time of the cycle and the wage premium for quitters is as high as it was in the early 2000s. The other side is that the Atlanta Fed data shows the gap between increases of skilled and unskilled workers as having narrowed.

    Macro/market implications

    The problem for central banks is that we know little of what triggers such shifts in labor market power, how long they last and what ends them. As long as these shifts persist, the Phillips Curve will look flatter in  two-dimensional Unemployment Rate/Wage Inflation space. A well-specified wage equation that account for such structural changes would have a steeper inflation/unemployment trade off than one without the term but capturing the effects we discuss above is not so easy.

    The type of technological progress would imply lower price pressures because the wage weakness would be transmitted in part into prices. (Full disclosure, you have to believe that there is an unmeasured component of actual productivity change here, although it may show up as quality-adjusted labor productivity, rather than standard output per-worker or worker-hour).

    These disinflationary pressures may be hard to fight. Combine this with investment that is not overly responsive to interest rates and you have a situation where getting the inflation that you want may be impossible without risking undesirable levels of asset price inflation. It sounds as if the Fed is already there. There is nothing inevitable about this outcome, but it emerges easily if the disinflationary pressures are strong enough and the interest rate responsiveness is low enough.

    One policy response is to live with it. Ultra-low inflation countries such as Japan and Switzerland have done just fine by many measures and the zero bound becomes an issue in a recession, not during an extended recovery. By ignoring it you have some ability to rein in asset market exuberance, but you are compromising on inflation and possibly activity targets.

    This does not necessarily stop you from raising rates, but you are faced with a dilemma. If raising rates is effective you end up with the downturn you wanted to avoid, if raising rates is ineffective you are fooling
    yourself in thinking that the margin versus the zero bound means that you are all clear in the next downturn. Being able to raise policy rates to three percent without tanking the economy very likely means that you can cut them in the next recession, you won’t have much of an impact. Hawks would argue that reducing the risk of a financial market bubble reduces the risk of a recession down the road.

    It seems to me that whichever way you turn, fiscal policy has to be taken out of the doghouse. Post election, Fed officials reversed their pre-election love affair with fiscal policy, arguing that the economy does not need it. One might say that if the inflation undershoot turns out to be persistent, fiscal policy will become even more necessary to offset structural pressures. And if you think that high liquidity is contributing to asset market ebullience, then a bit of fiscal stimulus combined with monetary tightening can maintain activity and unwind some of the asset market pressures.

    Modest long-term price pressures are probably positive on the fixed income side. Long-term disinflationary pressures and modest investment will keep downward pressure on long-term bond yields even if the Fed tightens at the short end in response to fiscal policy. The use of fiscal likely means being more relaxed about the size of the balance sheet. Debt-to-GDP would have to grow both cyclically and structurally, but debt servicing may not grow very rapidly because of the low inflation and the Fed’s interest income being recycled back to the Treasury. Short-term policy rates may swing around a lot versus stable but relatively low long-term rates.

    The central bank could take a hard line and maintain or shrink the balance sheet even as fiscal expansion was put in place. Still, it would hardly help macroeconomic stabilization if government finances were called into question, so willy-nilly it is likely that the balance sheet would absorb some of the debt incurred via fiscal policy.

    Caveat emptor – this analysis is pretty long term. In the short to medium term, I expect central banks like the Fed and ECB to try and follow up their rhetoric with liquidity tightening and for this to be reflected in long-term rates. Only if/when it turns out that the tightening is unsustainable will the forces I discuss above come into play.

    On the equity side, if you can replace a skilled worker with a less skilled worker that is an attractive proposition. It is not as exciting as booming demand but it still reaches the bottom line. The social consequences are mixed. It is possible that this reduces the returns to certain types of training and education, both specialized and generic, but overall demand for relatively undifferentiated blue-collar labor will go up as will their wages. Improvements in living standards are likely to come via lower prices than higher wages. This is hardly the American dream. However, it is often difficult to put together policies that efficiently offset technological forces to provide distributional equity, and if other jurisdictions are not so focussed on distribution, you can end up with the worst of both worlds. It is possible that workers will drift to occupations where differentiated skills can earn a higher return – so maybe fewer doctors and lawyers but more dancers with the stars.

    If you look at any central bank econometric model, the demand side has decades of development, the supply-side and particularly the modelling of technological change is primitive, distribution is virtually  nonexistent and asset market bubbles a problem because they should not exist in the model world. These secondary issues have become first order issues. Unaddressed they mean incomplete policy regimes and surprising and disappointing outcomes.

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