- The Fed's Liquidity Response Is Too Little Too Late – But That Was Always The Plan…
The Fed's Liquidity Response Is Too Little Too Late – But That Was Always The Plan…
Authored by Brandon Smith via Alt-Market.com,
The globalists and banking elites have been running the “order out of chaos” scam for a long time, centuries in fact. One thing that practice does is make people of otherwise average intelligence appear brilliant. One thing that organized conspiracy does is make a group of highly vulnerable criminals appear omnipotent and untouchable. Ultimately, it’s all about time. The globalists have had lots of time to tune and refine their methods for manipulating the collective psyche of the masses.
They make mistakes often, but as long as no one confronts them directly and removes these people from the equation, they simply set up shop elsewhere under a different name using different masks and continue their insidious work. As long society is still stricken with ignorance and assumes that such conspiracies are “impossible”, the elites have a free hand to victimize the population further. As long as academic idiots misinterpret Occam’s Razor and insist that the evidence of conspiracy does not matter because it does not fit with their narrow notion of “the simplest explanation”, they prop up the banking cartel and allow it to thrive.
On the positive side, I see an awakening taking place among a subset of the population which is savvy to the games of the globalists. I believe this subtle wave of analytical samurai has the elites worried; they realize that time for them is, for once in history, starting to run out. One day soon, they may find themselves the direct targets of a revolution, and they don’t like that idea.
Hence, the globalists need a plan, a con game of epic proportions on top of one of the largest economic bubbles in recent history. The plan relies first on a tried and true weapon of the elites: Co-option of the people that oppose them. And how does one co-opt a movement? By taking over their leadership. Second, for global change the cabal needs a global distraction, or a firestorm of numerous distractions to keep the public enthralled or in fear. Third, they need to divert blame away from themselves by presenting the public with believable scapegoats.
When it’s all over, they want people dazed and shell-shocked, wondering how it happened and searching for anyone to point a finger at. The narrative will be that “it was a perfect storm of coincidences”, that it was “the evil of the political left”, or the “evil of the political right”. They want to turn public confusion into civil war, all while they sit back and enjoy the chaos from a comfortable beach chair and wait for the moment they can swoop in and act like saviors seeking to “end the madness”.
This process is happening today, and only the most blind have problems seeing that the world has gone over the edge of an ugly precipice.
Disinformation agents call it “doom and gloom”, because that is supposed to dissuade you from taking it seriously. But the facts are the facts. This is why I focus so much of my time on economics – While numbers and stats can be rigged, the effects of a financial crash cannot be hidden. It is undeniable, and all the critics of this information can do is try to trick people into not looking at it.
The reality is this: The US economy is in steep decline and this is an engineered event.
The Federal Reserve spent the better part of the past decade inflating what we now call the “Everything Bubble”, a bubble that spreads through almost every facet of the economy from equities to housing to GDP to employment to corporate debt, consumer debt and national debt. I don’t think anyone denies the existence of this bubble except the central banks and a few mainstream media outlets.
Jerome Powell, now the Fed chairman, warned back in 2012 that the markets had become addicted to Fed stimulus and that any tightening of liquidity by the central bank, including cutting the balance sheet or raising interest rates, would cause a sharp reversal or crash. As soon as Powell became chairman, he ignored his own warnings and tightened liquidity anyway.
People confused about why Powell would take such action knowing full well that it would trigger a crash should look into the history of the Bank for International Settlements and how it dictates the policy decisions of all its member banks. The BIS is the “central bank of central banks” and is the central global manager of all national central banks. Powell and the Fed board do not write policy alone, they merely carry out policy decision made by the BIS.
As Powell hinted at in 2012, the Everything Bubble was popped in 2018 by the Fed through rate hikes and balance sheet cuts. Once the avalanche is triggered there is no stopping it. The rupture in fundamentals is ongoing. Only stocks markets and certain rigged statistics remain in blissful levitation.
The plunge in stock markets in December was stalled as corporations stepped in with stock buybacks and China pumped billions in stimulus into the global system. However, stocks are not long for this world as buybacks are set to slow down and stimulus measures from various central banks are seeing limited gains.
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US manufacturing has fallen to levels not seen in 10 years and has entered recession territory.
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US housing starts fell sharply in September and new home building declined. This indicator usually precedes a fall in overall housing sales by a few months. This would mean a return to the plunge in housing sales last seen during the summer. In other words, the recent pop in sales is a one off driven by lower mortgage rates, and is set to end.
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US retail sales are following a similar pattern to housing markets, with a recessionary decline earlier this year, followed by a short term rebound, and now a return to negative territory as the trend reasserts itself.
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Retail stores are closing at a record pace in 2019. Over 8500 stores are already closing this year, with a predicted 12,000 store closing by the beginning of 2020. This is often blamed on “online shopping”, but online retailer only account for around 14% of the total retail market. This hardly explains why brick and mortar stores are closing in droves. Not only that, but major online retailers like Amazon are seeing declining profits, with projected holiday profits set to fall even further.
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Corporate profits have tumbled in 2019 and earnings growth estimates have been drastically adjusted to the downside. Only certain companies, like Apple, have come out of the fray untouched so far, but this is common during recession and depression level crisis events – a handful of corporations survive and consolidate while the rest collapse.
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Corporate debt is at all time highs while cash holdings of most corporations are minimal; so much so that these companies are turning to the Fed’s repo overnight loans more and more to stay liquid.
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Consumer debt is at all time highs, with American households owing a total of more than $13 trillion.
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While there has been a recent steepening of the 3 month to 10 year yield curve as well as the 2 year to 10 year yield curve, this is actually a bad sign. A long term inversion of the yield curve is a sure signal of economic recession. When the yield curve steepens, this is the point historically in which a sharp crash in fundamentals and markets takes place.
In other words, the crash is happening now. Many analysts have wrongly assumed that that the Fed’s recent asset purchases indicate that they are seeking to “kick the can” on the crash. It’s much too late for that. If the Fed wanted to stall the crash then they would have initiated full bore QE4 around 8-10 months ago just after the December plunge. International banks and central banks have been warning about dollar liquidity issues since mid-2018. The Fed continued to tighten and did not act until the past couple of months, coincidentally, right after multiple polls showed that a majority of Americans were becoming worried about a recession.
That is to say, the Fed kept liquidity conditions as tight as possible until the public finally became aware of the crisis. The truth is, nothing has changed as far as liquidity is concerned.
The Fed launched asset purchases to make it look like they care about trying to fix the problem. However, the Fed’s repo stimulus and balance sheet increases are not enough to make any difference. Calling Fed repo actions “Not-QE” is a funny means pointing out that the Fed is not being straightforward about its intentions, but when comparing current repo loans and asset purchases to an event like TARP back in 2008, which by itself injected over $16 trillion in liquidity into the financial system (no audit of the other QE programs has yet been undertaken), the current stimulus is nothing but a drop in the ocean.
The Fed is definitely NOT being honest in its intentions, but not in the way many alternative analysts seem to think. The Fed’s not trying to hide QE4 measures, the Fed is continuing to do the bare minimum necessary to appear as though they are taking action while actually accomplishing very little.
They clearly have no intention of kicking the can any longer. The Fed WANTED a crash, and now they have it. The reason why is perfectly logical: The central bank, under the control of globalists at the BIS, needs economic chaos to provide cover for what they call the “global economic reset”. Essentially, it is the controlled demolition of the old world order to make way for their “new world order”.
As I’ve noted in previous articles, they’ve done all his before and openly admitted to causing crashes in the past, including the Great Depression. After each of these financial crisis events, globalist institutions have been formed and leaps forward in global governance have been taken. The implosion of the Everything Bubble appears to be the last intended economic crisis event before total centralization is achieved.
This is not to say that they will be successful in their agenda; I happen to think that in the long run they will fail. But the fact remains that the current recessionary collapse, soon to become far more destructive than it already is, was caused by the central bankers, and they did it knowingly. The narrative of the “bumbling Fed” desperate to save itself or the system is delusional. The evidence simply doesn’t support this claim.
Fed officials publicly acknowledged what would happen if liquidity tightening was pursued. They did it anyway, and then told the public all was well. They have lied every step of the way, keeping the public completely in the dark and unprepared for the consequences.
At the same time, we have a supposedly “populist” president that attacks the Fed regularly while at the same time taking full credit for the bubble in markets. Donald Trump boasts daily of his influence in markets, employment, GDP, etc. He does this even though he called the economic recovery ‘a bubble’ during his campaign. He now owns the health of the economy, and by extension he has given the central bankers and the globalist a perfect gift – He has set himself and his supporters up as scapegoats for the crash. As he falls, he will discredit central bank critics for generations to come.
If you were wondering why the globalists stalled for ten years on crashing the system, now you know. If they launched the crisis a few years ago, they would have been blamed for it. Today, it’s hard to say. The growing contingent of liberty activists immune to the scam (and immune to the Kabuki theater involving Donald Trump) might be able to turn the tide enough to force the hand of the elites. Maybe they will have to back off of some of their centralization efforts, or drag out the economic downturn longer than they wanted. I suspect they have already had to do this on a number of occasions because of liberty analysts.
Ultimately, the crash is about us. It is about affecting changes to the public psychology, making us more receptive to extreme globalization. If they don’t care what we think, then why spend trillions of dollars and endless hours and manpower trying to influence our perception? They need the vast majority of us to consent to the “new world order”, otherwise they will have failed.
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Tyler Durden
Fri, 11/01/2019 – 23:45 -
- Millennials With Student Debt Are Getting Crushed The Most In These Ten Cities
Millennials With Student Debt Are Getting Crushed The Most In These Ten Cities
SmartAsset, a personal finance technology company, has published a new study that identifies certain US metropolitan areas with the highest student loan balances.
These cities are where millennials are struggling to make ends meet and can’t cover expenses. These hopeless folks have insurmountable debts, gig-economy jobs, record-high credit card rates, and no savings. Ahead of the next recession, this study provides important clues to the geographic regions where millennials will suffer the most financial distress.
The release of the study comes at a time when student loan debt has reached $1.6 trillion, has already become an important topic with presidential candidates ahead of the 2020 election, and when the next recession strikes, will financially paralyze a generation of millennials.
SmartAsset analyzed the top 25 metro areas most impacted by the student debt crisis and narrowed the list to ten.
Researchers used data from Experian, the Census, and the IRS to develop the list of where average student loan debt exceeds the median earnings of millennials.
According to the study, the top six metro areas hit hardest by the student debt crisis: Gainesville, Florida; Corvallis, Oregon; Durham-Chapel Hill, North Carolina; Morgantown, West Virginia; Eugene, Oregon and Greenville, North Carolina. The remainder are Ithaca, New York, Santa Fe, New Mexico; Hattiesburg, Mississippi; and Colombia, Missouri.
Student debt is the fastest-growing consumer debt in the country, with $1.6 trillion outstanding, cracks are already starting to appear with 22% of borrowers defaulting.
Millennials will be the most impacted generation in the next recession, and thanks to SmartAsset, the exact metro areas of this financial stress are now known.
Tyler Durden
Fri, 11/01/2019 – 23:25 - Survival Lessons From A California Fire Evacuee
Survival Lessons From A California Fire Evacuee
Authored by Adam Taggart via PeakProsperity.com,
As I type this, there are over 16 large wildfires currently burning across northern and southern California. Hundreds of thousands of residents have been displaced. Millions are without power.
My hometown of Sebastopol, CA underwent mandatory evacuation at 4am Saturday night. I jumped into the car, along with our life essentials and our pets, joining the 200,000 souls displaced from Sonoma County this weekend.
Even though I write about preparedness for a living, fleeing your home in the dead of night with a raging inferno clearly visible on the horizon drives home certain lessons more effectively than any other means.
I’d like to share those learnings with you, as they’re true for any sort of emergency: natural (fire, flood, hurricane, tornado, earthquake, blizzard, etc), financial (market crash, currency crisis) or social (revolution, civil unrest, etc).
And I’d like you to be as prepared as possible should one of those happen to you, which is statistically likely.
Your survival, and that of your loved ones, may depend on it.
No Plan Survives First Contact With Reality
As mentioned, I’ve spent years advising readers on the importance of preparation. Emergency preparedness is Step Zero of the guide I’ve written on resilient living — literally the first chapter.
So, yes, I had a pre-designed bug-out plan in place when the evacuation warning was issued. My wife and I had long ago made lists of the essentials we’d take with us if forced to flee on short notice (the Santa Rosa fires of 2017 had reinforced the wisdom of this). Everything on these lists was in an easy-to-grab location.
The only problem was, we were 300 miles away.
Reality Rule #1: You Will Be Caught By Surprise
There are too many variables that accompany an unforeseen disaster to anticipate all of them. Your plan has to retain enough flexibility to adapt to the unforeseen.
In my case, we were down at Parents’ Weekend at Cal Poly in San Luis Obispo, where my older daughter recently started her freshman year.
As the text alerts warning of the growing fire risk started furiously arriving, we monitored them closely, reluctant to leave the festivities and our time with our daughter. But once the evacuation warning came across, we knew it was serious enough to merit the 6-hour mad dash home to rescue what we could.
The upside of that long drive was that it gave us time to alter our bug-out plan according to the unfolding situation. We decided my wife and younger daughter would go directly to safety; that reduced the lives at risk in the fire zone down to just 1 (mine). And I used the phone to line up neighbors who could grab our stuff should I not be able to make it home in time.
The learning here is: Leave plenty of room in your plan for the unexpected. If its success depends on everything unfolding exactly as you predict, it’s worthless to you.
Reality Rule #2: Things Will Happen Faster Than You’re Ready For
Once an emergency is in full swing, things start happening more quickly than you can process well.
Even if developments are unfolding in the way you’ve anticipated, they come at an uncomfortably fast rate that adrenaline, anxiety and fatigue make even more challenging to deal with.
Just as The Crash Course chapter on Compounding explains how exponential problems unfold too fast to avoid once they become visible, it’s very easy to get overwhelmed or caught off-guard by the pace required to deal with a disaster.
The Kincade fire started at 9:30pm the night before I left Sebastopol for Cal Poly. When I went to bed that night it was a mere 300 acres in size. Two days later it was 25,000 acres. (it’s currently at 66,000 acres).
It went from “nothing to worry about” to “get out NOW!” in less than 48 hours.
Watching who fared well during the evacuation and who didn’t , those who took action early out of a healthy sense of caution had much more success than those who initially brushed off the potential seriousness of the situation.
Here’s how much of a difference timely action made:
The ‘evacuation warning’ advisory became a ‘mandatory evacuation’ order at 4am on Saturday night. My car was ready to go and I was on the road out of town within 5 minutes.
Several friends of mine left home just 45 minutes after I did. By that time, the fleeing traffic made the roads essentially immobile. My friends had to turn back to ride things out in their homes, simply hoping for the best.
So I’m reminded of the old time-management axiom: If you can’t be on time, be early. In a developing crisis, set your tolerance level for uncertainty to “low”. Take defensive measures as soon as you detect the whiff of increasing risk; it’s far more preferable to walk back a premature maneuver than to realize it’s too late to act.
Reality Rule #3: You Will Make Mistakes
Related to Rule #2 above, you’re going to bungle parts of the plan. Stress, uncertainty and fatigue alone pretty much guarantee it.
You’re going to forget things or make some wrong choices.
Case in point: as I was evacuating, the plan was to take a less-travelled back route, in order to reduce the odds of getting stuck in traffic. But, racing in the dark and checking in on the phone with numerous friends and neighbors, muscle memory took over and I found myself headed to the main road of town. Too late to turn back, I sat at the turn on, waiting for someone in the line of cars to let me in.
It then hit me that perhaps no one might. Folks were panicked. Would someone be willing to slow down to let me go ahead of them?
Obviously someone did, or I wouldn’t be typing this. But that mistake put everything else I’d done correctly beforehand in jeopardy.
So, as the decisions start to come fast and furious, your key priority is to ensure that you’re focused on making sure the few really important decisions are made well, and that the balls that get dropped won’t be ones that put your safety at risk.
Forget to pack food for the cat? No big deal, you’ll find something suitable later on. Miss your time window to evacuate, as my friends did? That could cost you your life.
Reality Rule #4: When Stressed, All You Care About Is People & Pets
A good bug-out plan covers preparing to take essential clothes, food & water, medications, key documents, communications & lighting gear, personal protection, and irreplaceable mementoes.
But when the stakes escalate, you quickly don’t care about any of those. It’s only living things — people, pets & livestock — that you’re focused on.
The rest, while valuable to have in an evacuation, is ultimately replaceable or non-essential.
I very well might have rolled the dice and stayed down at Cal Poly if it weren’t for the cat. But family is family, no matter how furry. I just couldn’t leave her to face an uncertain fate. And I believe strongly you’ll feel the same about any people or pets in your life — it’s a primal, tribal pull to take care of our own. If you don’t plan for it, it will override whatever other priorities you think you may have.
So prioritize accordingly. Build your primary and contingency plans with the security of people and animals first in mind. If there’s time for the rest, great. But if not, at least you secured what’s most important (by far).
Essential Bug-Out Resources
Beyond the universal rules above, my current experience as an evacuee has emphasized the out-sized importance of several essential resources for those bugging out. These are the things that have proved most valuable during and after the emergency evacuation.
I will share these in tomorrow’s post (update: this post Essential Bug-out Resources can now be read by clicking here). But before I do, I want to express my thanks for the many of you who have sent well-wishes and offers of assistance. Literally hundreds of friends, acquaintances and near-strangers have contacted me via email, text, social media and PeakProsperity.com over the past 72 hours. I’ve received offers to put up my family from folks throughout California and 4 other states. It has been a tremendous honor to be on the receiving end of such kindness.
So many of you who have asked “What can I do to help?”. Personally, I’m safe and being well-cared for where we’re currently staying.
But I’ll be honest: the gesture that would benefit me (and my business partner Chris Martenson) the most at this point would be for anyone with the means and interest to purchase a premium subscription to PeakProsperity.com.
The thrash that these fires are inserting into my bandwith is impacting PeakProsperity.com at an important time, when Chris and I are taking big strategic steps to substantially expand this website’s audience and offerings.
So if you want to help us with that mission, while enjoying valuable insight in return, please subscribe. Even just for a single month.
Tyler Durden
Fri, 11/01/2019 – 23:05 - Visualizing The Future Of 5G: Comparing 3 Generations Of Wireless Technology
Visualizing The Future Of 5G: Comparing 3 Generations Of Wireless Technology
Wireless technology has evolved rapidly since the turn of the century. From voice-only 2G capabilities and internet-enabled 3G, today’s ecosystem of wireless activity is founded on the reliable connection of 4G.
Fifth-generation wireless network technology, better known as 5G, is now being rolled out in major cities worldwide, and as Visual Capitalist’s Ashley Viens notes, by 2024, an estimated 1.5 billion mobile users─which account for 40% of current global activity─will be using 5G wireless networks.
Today’s chart highlights three generations of wireless technology in the 21st century, and the differences between 3G, 4G, and 5G networks.
5G: The Next Great Thing?
With over 5 billion mobile users worldwide, our world is growing more connected than ever.
Data from GSMA Intelligence shows how rapidly global traffic could grow across different networks:
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2018: 43% of mobile users on 4G
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2025: 59% of mobile users on 4G, 15% of mobile users on 5G
But as with any new innovation, consumers should expect both positives and negatives as the technology matures.
Benefits
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IoT Connectivity
5G networks will significantly optimize communication between the Internet of Things (IoT) devices to make our lives more convenient. -
Low latency
Also known as lag, latency is the time it takes for data to be transferred over networks. Users may see latency rates drop as low as one millisecond. -
High speeds
Real-time streaming may soon be a reality through 5G networks. Downloading a two-hour movie takes a whopping 26 hours over 3G networks and roughly six minutes on 4G networks─however, it’ll only take 3.6 seconds over 5G.
Drawbacks
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Distance from nodes
Walls, trees, and even rain can significantly block 5G wireless signals. -
Requires many nodes
Many 5G nodes will need to be installed to offer the same level of coverage found on 4G. -
Restricted to 5G-enabled devices
Users can’t simply upgrade their software. Instead, they will need a 5G-enabled device to access the network.
Global 5G Networks
5G still has a way to go before it reaches mainstream adoption. Meanwhile, countries and cities are racing to install the infrastructure needed for the next wave of innovation to hit.
Since late 2018, over 25 countries have deployed 5G wireless networks. Notable achievements include South Korea, which became the first country globally to launch 5G wireless technology in April 2019. Switzerland boasts the highest number of 5G network deployments, currently at 225 and counting.
To date, China has built roughly 350,000 5G sites─compared to the less than 20,000 in the U.S.─and plans to invest an additional US$400 billion in infrastructure by 2023. Chinese mobile providers plan to launch 5G services starting in 2020.
What Does This Mean For 4G?
4G isn’t going anywhere anytime soon. As 5G gradually rolls out, 4G and 5G networks will need to work together to support the wave of IoT devices entering the market. This network piggybacking also has the potential to expand global access to the internet in the future.
The race to dominate the wireless waves is even pushing companies like China’s Huawei to explore 6G wireless innovation – before they’ve even launched their 5G networks.
Tyler Durden
Fri, 11/01/2019 – 22:45 -
- The Lebanese "Canary In The Mine" Is Signalling Mid-East Trouble Ahead
The Lebanese "Canary In The Mine" Is Signalling Mid-East Trouble Ahead
Authored by Alastair Crooke via The Strategic Culture Foundation,
There have been protests (mostly pointing up economic stress) across the region for some months: from Egypt to Iraq. But the Lebanese demonstrations have caught the global attention. And there is no doubting that the Lebanese protests represent a major phenomenon. We may ask whether they are essentially a local manifestation, reflecting only the well-attested Lebanese problems of corruption, widening disparities in wealth, nepotism and failing state structures, or do they signal something much deeper?
Lebanon, historically, has been viewed as ‘the bell weather’ – pointing up the general health of this region.
Well, if Lebanon is indeed such, we might conclude that the patient is presenting rather feverish symptoms. But that should not be so surprising. For, the region is already experiencing strategic ‘shock’ – and this condition is likely to be much aggravated by the additional psychological stresses of fast-approaching economic crisis. Of course, Lebanon is ‘special’ in its own distinct way – but ‘yes’, Lebanon precisely is giving warning of a turbulence quietly incubating across the Middle East.
The ‘strategic shock’ is represented by the collapse of long-established landmarks: the US is departing Afghanistan, and the Middle East. The Wolfowitz doctrine of US primacy across the region is drawing to a close. Yes, there will be push-back in parts of the ‘liberal’ western Establishment – and there will be periods of two US steps ‘out’ from the region, and with another ‘in’.
But the psychic reality of this incontrovertible ‘fact’ has seared itself into the regional psyche. Those who dined liberally from the cornucopia of power and wealth under the ‘old order’ are understandably frightened – their protective cover is being snatched away.
This shift has been signalled in so many ways: the US non-reaction to the Iranian downing of its drone; the US’ non-reaction to the 14 September Aramco strikes; the red-carpet laid down for President Putin in Riyadh – that the direction of US policy ‘travel’ is plain. Yet, nothing signals it more evidently than Secretary Pompeo’s recent message to Israel, during his last visit: i.e. you, O Israel, should feel free to respond to any threats to your security, from whatever source, and arising from wherever. (Translation: You (Israel) are on your own), but please don’t escalate tensions. (Translation: don’t place our American forces as ‘pig-in-the-middle’ of your disputes, as we want the withdrawal to proceed smoothly). Of course, Trump doesn’t want Congress snapping at his trouser legs, as he unfolds this controversial act.
If this be the message handed out to Israel, then of course, it applies – in spades – to the Lebanese élites who have dined so well under the previous regime – whilst their Lebanese compatriots succumbed to ever greater impoverishment. The Russian diplomatic and security achievement for Syria, as evidenced in the communiqué issued this week after the Sochi summit with Erdogan, upends the old landmarks across the northern tier of the Middle East. In Syria evidently, but Lebanon and Iraq too. The new reality demands new dispositions.
This might be ‘bad news’ for some, but the very moment of facing reality – of making hard choices (i.e. that the US can no longer afford, and the world will no longer finance, its global military presence) – may also have ‘its silver lining’. That is to say, the end to US occupation of part of Syria may concomitantly well unlock a political settlement in Syria – and upturn fossilised and corrupt establishments in neighbouring states too.
This – the uprooting of old, embedded landmarks – which leaves America and Saudi Arabia as waning stars in the regional political cosmos – is but one backdrop to events in Lebanon. An old order is seen to be fading. Might even the Ta’if constitutional settlement in Lebanon, which Saudi Arabia used to lock tight, and petrify, a Sunni-led sectarian establishment be now in play?
Again too, across the Arab world, there is a legitimacy-deficit staining existing élites. But it applies not just to the Middle East. As protesters peer around the world, through their smart phones, how can they fail to observe the low-intensity ‘civil war’ – the polarised protests – in the US, the UK and parts of Europe, waged precisely against certain élites. What price then, western ‘values’ – if westerners themselves are at war over them?
Of course, this dis-esteem for global élites is connected to that other powerful dynamic affecting the Middle East: the latter may not be in a ‘good place’ politically, but it is in an even worse place economically. In Lebanon, one-third of Lebanese are living below the poverty line, while the top one percent hold one-quarter of the nation’s wealth, according to the United Nations. This is not the exception for the region – It is the norm.
And intimations of global slow-down and recession are touching the region. We all know the figures: half of the population in under 25. What is their future? Where is there some ‘light’ to this tunnel?
The western world is in the very late stage to a trade and credit cycle (as the economists describe it). A down-turning is coming. But there are indications too, that we may be approaching the end of a meta-cycle, too.
The post-WW2 period saw the US leverage the war-consequences to give it its dollar hegemony, as the world’s unique trading currency. But also, circumstances were to give US banks the exceptional ability to issue fiat credit across the globe at no cost (the US simply could ‘print’ its fiat credit). But ultimately that came at a price: the limitation – to being the global rentier – became evident through the consequence of the incremental impoverishment of the American Middle Classes – as well-paid jobs evaporated, even as America’s financialised banking balance sheet ballooned.
Today, we seem to be entering a new cycle period, with different trade characteristics. We are in a post-general manufacturing era. Those jobs are gone to Asia, and are not ‘coming home’. The ‘new’ trade war is no longer about building a bigger bankers’ balance sheet; but about commanding the top-end of tech innovation and manufacturing – which is to say, gaining command of its ‘high peaks’ that, in turn, offer the ability to dominate, and impose the industry standards for the next decades. This – tech standards – is, as it were, the new ‘currency’, the new ‘dollar’ of the coming era. It is, of course, all about states maintaining political power.
So, what has this to do with the Middle East? Well, quite a lot. The new, global tech competition implies a big problem (as one Washington commentator noted to me). It is this: what to with the 20% of Americans that would become ‘un-needed’ in this new top-end tech era – especially when lower paid jobs are being progressively robotised.
Here is the point: This tech ‘war’ will be between the US, China and (to a lesser extent) Russia. Europe will be a bit-player, hard pressed to compete. If the US thinks it will end with 20% of population surplus to requirement, for Europe it likely will be higher; and for the Middle East? It does not bear thinking about.
The Middle East is still a fossil fuel fed economy (at time when fossil fuel is fast falling out of fashion, capital expenditure is paused, and growth forecasts for demand, are being cut). Even Lebanon’s economy – which has no oil – is (paradoxically) still an oil economy. The Lebanese either work in the Gulf, servicing the ancillary services to a fossil-fuel based economy and remit their savings to Lebanese banks, or work in the Lebanese financial sector, managing savings derived largely from this sector.
The point is, how will the region find a future for a young population that is out-running the continent’s water and (useful) land resources, if fossil fuel cannot be the employment driver?
It won’t? Then expect a lot more protests.
Tyler Durden
Fri, 11/01/2019 – 22:25 - Hardware As A Service: Nevada Brothel Begins Using Sex Robots, Internet-Enabled Sex Toys
Hardware As A Service: Nevada Brothel Begins Using Sex Robots, Internet-Enabled Sex Toys
Modern problems require modern solutions.
And that’s why Nevada’s Alien Cathouse is adapting to the technological times, according to the Daily Star. The UFO themed brothel will be soon offering up a sex robot alongside of its – well, human sex robots.
The robot is being introduced for clients who “love rough sex”, according to a Cathouse spokeswoman.
“For clients that love rough sex it’s dangerous to girls, but a sex robot can bear it,” she said.
And apparently, the human staff at the Cathouse is embracing their new electronic co-worker.
“The Courtesans are actually excited about the additional revenue stream to Alien Cathouse, and themselves …as well as the additional opportunities that might present themselves for interested parties wanting to party with a real flesh and blood courtesan and with an AI sex robot at the same time,” the spokeswoman continued.
In addition to the sex robot, the Cathouse is also introducing teledildonics – groundbreaking new technology that allows you to do things like operate someone’s butt plug, via the internet, from halfway across the world. With a country this technologically sound, it’s no wonder GDP just beat estimates.
Rod Thompson of the Cathouse said: “Alien Cathouse really [caters for] towards individuals seeking to fulfil a sexual fantasy with a porn star and we are in talks with teledildonics manufacturers in regard to having each of our suites outfitted to accommodate this technology.”
He continued: “Some of the ladies are very excited about this, because they say it gives them an opportunity to give men, women or couples that chance to experience an encounter with a real courtesan at a brothel they might not normally, because of time and or distance be able to actually physically visit. We have one of our top porn star courtesans that will be the first to book a client for this experience around Halloween this month.”
Thompson also said that for virtual visits, clients would need “compatible hardware”. Men are directed to use the Interactive Vibrating Masturbator for Men toy and women are directed to use a toy called OhMiBod.
In terms of cost, a Cathouse spokesperson said: “Persons interested can only discuss pricing within a legally licensed brothel, but generally speaking we have seen bookings range anywhere from as little as $1,000 to tens of thousands of dollars. The courtesans set their own prices and split the price of the booking 50/50 with our brothel.”
And the sex robot will get a salary too, according to Thompson: “If it is a sex robot [working] with courtesan, pricing legally will be negotiated within the brothel …and most likely even if it were a sex robot the brothel would follow the same guidelines in terms of money.”
Cathouse employee Stella Renée said of the new technology: “As an honest-to-goodness, flesh-and-blood, Cougar-ific Cuddle Queen I am very excited about the addition of sex-bot playtime and remote interaction options at the brothel. Expanding our technological and social stiletto-print is imperative. Adapt or die!”
She continued: “I for one am all about diversifying my portfolio of sexy services to meet the needs of my beloved clients. I’m an artist damn it!”
Sure you are.
Tyler Durden
Fri, 11/01/2019 – 22:05 - It's No Coincidence The Century Of Total War Coincided With The Century Of Central Banking
It's No Coincidence The Century Of Total War Coincided With The Century Of Central Banking
[This talk was delivered at the Mises Circle in New York City on September 14, 2012.]
The 20th century was the century of total war. Limitations on the scope of war, built up over many centuries, had already begun to break down in the 19th century, but they were altogether obliterated in the 20th. And of course the sheer amount of resources that centralized states could bring to bear in war, and the terrible new technologies of killing that became available to them, made the 20th a century of almost unimaginable horror.
It isn’t terribly often that people discuss the development of total war in tandem with the development of modern central banking, which — although antecedents existed long before — also came into its own in the 20th century. It’s no surprise that Ron Paul, the man in public life who has done more than anyone to break through the limits of what is permissible to say in polite society about both these things, has also been so insistent that the twin phenomena of war and central banking are linked. “It is no coincidence,” Dr. Paul said, “that the century of total war coincided with the century of central banking.”
He added:
If every American taxpayer had to submit an extra five or ten thousand dollars to the IRS this April to pay for the war, I’m quite certain it would end very quickly. The problem is that government finances war by borrowing and printing money, rather than presenting a bill directly in the form of higher taxes. When the costs are obscured, the question of whether any war is worth it becomes distorted.
For the sake of my remarks today I take it as given that Murray Rothbard’s analysis of the true functions of central banking is correct. Rothbard’s books The History of Money and Banking: The Colonial Era Through World War II, The Case Against the Fed, The Mystery of Banking, and What Has Government Done to Our Money? provide the logical case and the empirical evidence for this view, and I refer you to those sources for additional details.
For now I take it as uncontroversial that central banks perform three significant functions for the banking system and the government.
First, they serve as lenders of last resort, which in practice means bailouts for the big financial firms.
Second, they coordinate the inflation of the money supply by establishing a uniform rate at which the banks inflate, thereby making the fractional-reserve banking system less unstable and more consistently profitable than it would be without a central bank (which, by the way, is why the banks themselves always clamor for a central bank).
Finally, they allow governments, via inflation, to finance their operations far more cheaply and surreptitiously than they otherwise could.
As an enabler of inflation, the Fed is ipso facto an enabler of war. Looking back on World War I, Ludwig von Mises wrote in 1919, “One can say without exaggeration that inflation is an indispensable means of militarism. Without it, the repercussions of war on welfare become obvious much more quickly and penetratingly; war weariness would set in much earlier.”
No government has ever said, “Because we want to go to war, we must abandon central banking,” or “Because we want to go to war, we must abandon inflation and the fiat money system.” Governments always say, “We must abandon the gold standard because we want to go to war.” That alone indicates the restraint that hard money places on governments. Precious metals cannot be created out of thin air, which is why governments chafe at monetary systems based on them.
Governments can raise revenue in three ways.
Taxation is the most visible means of doing so, and it eventually meets with popular resistance.
They can borrow the money they need, but this borrowing is likewise visible to the public in the form of higher interest rates — as the federal government competes for a limited amount of available credit, credit becomes scarcer for other borrowers.
Creating money out of thin air, the third option, is preferable for governments, since the process by which the political class siphons resources from society via inflation is far less direct and obvious than in the cases of taxation and borrowing. In the old days the kings clipped the coins, kept the shavings, then spent the coins back into circulation with the same nominal value. Once they have it, governments guard this power jealously. Mises once said that if the Bank of England had been available to King Charles I during the English Civil War of the 1640s, he could have crushed the parliamentary forces arrayed against him, and English history would have been much different.
Juan de Mariana, a Spanish Jesuit who wrote in the 16th and early 17th centuries, is best known in political philosophy for having defended regicide in his 1599 work De Rege. Casual students often assume that it must have been for this provocative claim that the Spanish government confined him for a time. But in fact it was his Treatise on the Alteration of Money, which condemned monetary inflation as a moral evil, that got him in trouble.
Think about that. Saying the king could be killed was one thing. But taking direct aim at inflation, the lifeblood of the regime? Now that was taking things too far.
In those days, if a war were to be funded partly by monetary debasement, the process was direct and not difficult to understand. The sequence of events today is more complicated, but as I’ve said, not fundamentally different. What happens today is not that the government needs to pay for a war, comes up short, and simply prints the money to make up the difference. The process is not quite so crude. But when we examine it carefully, it turns out to be essentially the same thing.
Central banks, established by the world’s governments, allow those governments to spend more than they receive in taxes. Borrowing allowed them to spend more than they received in taxes, but government borrowing led to higher interest rates, which in turn can provoke the public in undesirable ways. When central banks create money and inject it into the banking system, they serve the purposes of governments by pushing those interest rates back down, thereby concealing the effects of government borrowing.
But central banking does more than this. It essentially prints up money and hands it to the government, though not quite so directly and obviously.
First, the federal government is able to sell its bonds at artificially high prices (and correspondingly low interest rates) because the buyers of its debt know they can turn around and sell to the Federal Reserve. It’s true that the federal government has to pay interest on the securities the Federal Reserve owns, but at the end of the year the Fed pays that money back to the Treasury, minus its trivial operating expenses. That takes care of the interest. And in case you’re thinking that the federal government still has to pay out at least the principal, it really doesn’t. The government can roll over its existing debt when it comes due, issuing a new bond to pay off the principal of the old one.
Through this convoluted process — a process, not coincidentally, that the general public is unlikely to know about or understand — the federal government is in fact able to do the equivalent of printing money and spending it. While everyone else has to acquire resources by spending money they earned in a productive enterprise — in other words, they first have to produce something for society, and then they may consume — government may acquire resources without first having produced anything. Money creation via government monopoly thus becomes another mechanism whereby the exploitative relationship between government and the public is perpetuated.
Now because the central bank allows the government to conceal the cost of everything it does, it provides an incentive for governments to engage in additional spending in all kinds of areas, not just war. But because war is enormously expensive and because the sacrifices that accompany it place such a strain on the public, it is wartime expenditures for which the assistance of the central bank is especially welcome for any government.
The Federal Reserve System, which was established in late 1913 and opened its doors the following year, was first put to the test during World War I. Unlike some countries, the United States did not abandon the gold standard during the war, but it was not operating under a pure 100 percent gold standard in any case. The Fed could and did engage in credit expansion. On Mises.org we feature an article by John Paul Koning that takes the reader through the exact process by which the Fed carried out its monetary inflation in those early years. In brief, the Fed essentially created money and used it to add war bonds to its balance sheet. Benjamin Anderson, the Austrian-sympathetic economist, observed at the time, “The growth in virtually all the items of the balance sheet of the Federal Reserve System since the United States entered the war has been very great indeed.”
The Fed’s accommodating role was not confined to wartime itself. In America’s Money Machine, Elgin Groseclose wrote,
Although the war was over in 1918, in a fighting sense, it was not over in a financial sense. The Treasury still had enormous obligations to meet, which were eventually covered by a Victory loan. The main support in the market again was the Federal Reserve.
Monetary expansion was especially helpful to the US government during the Vietnam War. Lyndon Johnson could have both his Great Society programs and his overseas war, and the strain on the public was kept — at first, at least — within manageable limits.
So confident had the Keynesian economic planners become that by 1970, Arthur Okun, one of the decade’s key presidential advisers on the economy, was noting in a published retrospective that wise economic management seemed to have done away with the business cycle. But reality could not be evaded forever, and the apparently strong war economy of the 1960s gave way to the stagnation of the 1970s.
There is a law of the universe according to which every time the public is promised that the boom-bust business cycle has been banished forever, a bust is right around the corner. One month after Okun’s rosy book was published, the recession began.
Americans paid a steep cost for the inflation of the 1960s. The loss of life resulting from the war itself was the most gruesome and horrific of these costs, but the economic devastation cannot be ignored. As many of us well remember, years of unemployment and high inflation plagued the US economy. The stock market fared even worse. Mark Thornton points out that
in May 1970, a portfolio consisting of one share of every stock listed on the Big Board was worth just about half of what it would have been worth at the start of 1969. The high flyers that had led the market of 1967 and 1968 — conglomerates, computer leasers, far-out electronics companies, franchisers — were precipitously down from their peaks. Nor were they down 25 percent, like the Dow, but 80, 90, or 95 percent.
… The Dow index shows that stocks tended to trade in a wide channel for much of the period between 1965 and 1984. However, if you adjust the value of stocks by price inflation as measured by the Consumer Price Index, a clearer and more disturbing picture emerges. The inflation-adjusted or real purchasing power measure of the Dow indicates that it lost nearly 80% of its peak value.
And for all the talk of the Fed’s alleged independence, it is not even possible to imagine the Fed maintaining a tight-money stance when the regime demands stimulus, or when the troops are in the field. It has been more than accommodating during the so-called War on Terror. Consider the amount of debt purchased every year by the Fed, and compare it to that year’s war expenditures, and you will get a sense of the Fed’s enabling role.
Now while it’s true that a gold standard restrains governments, it’s also true that governments have little difficulty finding pretexts — war chief among them — to abandon the gold standard. For that reason, the gold standard in and of itself is not a sufficient restraint on the government’s ambitions, at home and abroad.
As we look to the future, we must cast aside all timidity in our proposals for monetary reform. We do not seek a gold-exchange standard, as existed under the Bretton Woods system. We do not seek to use the price of gold as a calibration device to assist the monetary authority in its decisions on how much money to create. We do not even seek the restoration of the classical gold standard, great though its merits are.
In the 1830s, the hard-money Jacksonian monetary theorists coined the marvelous phrase “separation of bank and state.” That would be a start.
What we need today is the separation of money and state.
There are some ways in which money is unique among goods. For one thing, money is valued not for its own sake but for its use in exchange. For another, money is not consumed, but rather is handed on from one person to another. And all other goods in the economy have their prices expressed in terms of this good.
But there is nothing about money — or anything else, for that matter — that should make us think its production must be carried out by the government or its designated monopoly grantee. Money constitutes one-half of every non-barter market transaction. People who believe in the market economy, and yet who are prepared to hand over to the state the custodianship of this most crucial good, ought to think again.
Interventionists sometimes claim that a particular good is just too important to be left to the market. The standard free-market reply turns this argument around: the more important a commodity is, the more essential it is for the government not to produce it, and to leave its production to the market instead.
Nowhere is this more true than in the case of money. As Ludwig von Mises once said, the history of money is the history of government efforts to destroy money. Government control of money has yielded monetary debasement, the impoverishment of society relative to the state, devastating business cycles, financial bubbles, capital consumption (because of falsified profit-and-loss accounting), moral hazard, and — most germane to my topic today — the expropriation of the public in ways they are unlikely to understand. It is this silent expropriation that has made possible some of the state’s greatest enormities, including its wars, and it is all of these offenses combined that constitute a compelling popular brief against the current system and in favor of a market substitute.
The war machine and the money machine, in short, are intimately linked. It is vain to denounce the moral grotesqueries of the US empire without at the same time taking aim at the indispensable support that makes it all possible. If we wish to oppose the state and all its manifestations — its imperial adventures, its domestic subsidies, its unstoppable spending and debt accumulation — we must point to their source, the central bank, the mechanism that the state and its kept media and economists will defend to their dying days.
The state has persuaded the people that its own interests are identical with theirs. It seeks to promote their welfare. Its wars are their wars. It is the great benefactor, and the people are to be content in their role as its contented subjects.
Ours is a different view. The state’s relationship to the people is not benign, it is not one of magnanimous giver and grateful recipient. It is an exploitative relationship, whereby an array of self-perpetuating fiefdoms that produce nothing live at the expense of the toiling majority. Its wars do not protect the public; they fleece it. Its subsidies do not promote the so-called public good; they undermine it. Why should we expect its production of money to be an exception to this general pattern?
As F.A. Hayek said, it is not reasonable to think that the state has any interest in giving us a “good money.” What the state wants is to produce the money or have a privileged position vis-à-vis the source of the money, so it can dispense largesse to its favored constituencies. We should not be anxious to accommodate it.
The state does not compromise, and neither should we. In the struggle of liberty against power, few enough will oppose the state and the conventional wisdom it urges us to adopt. Fewer still will reject the state and its programs root and branch. We must be those few, as we work toward a future in which we are the many.
This is our mission today, as it has been the mission of the Mises Institute for the past 30 years. With your support, we shall at this critical moment carry on publishing our books and periodicals, aiding research and teaching in Austrian economics, promoting the Austrian School to the public, and training tomorrow’s champions of the economics of freedom.
Tyler Durden
Fri, 11/01/2019 – 21:45 - Dear Parents Of Super-Fat Kids: Let Science Surgically Fix Years Of Terrible Habits
Dear Parents Of Super-Fat Kids: Let Science Surgically Fix Years Of Terrible Habits
Are you a parent of a severely obese child whose condition is undoubtedly glandular in nature and not a result of your dietary failings?
Whatever the cause, the American Academy of Pediatrics (AAP) is now recommending that more extremely fat children undergo gastric bypass surgery with life-changing implications.
The surgery, which can cost up to $20,000, is typically not covered by public or private health insurance. This means that poor fat kids will just have to make lifestyle changes instead of making it surgically impossible for them to gorge themselves.
The guidance, issued Sunday by the AAP, is based on a review of medical evidence, including multiple studies which found that weight loss surgery in teens can result in dramatic weight loss lasting “at least several years,” according to AP.
“Safe and effective is the message here,” said Duke University pediatrics professor, Dr. Sarah Armstrong.
Child whose parents exploited his obesity in the modeling industry Armstrong, the lead author of the new policy, says that children who haven’t gone through puberty may not quite understand the long-term implications of the surgery, however age alone should not rule out the procedure.
“It’s a lifelong decision with implications every single day for the rest of your life,” she said.
Nearly 5 million U.S. children and teens are severely obese, a near doubling over 20 years. Many have already developed related health problems including diabetes, high blood pressure, sleep apnea and liver disease. But most kids don’t get obesity surgery, mainly because most public and private health insurance doesn’t cover it or they live far from surgery centers, Armstrong said. Costs can total at least $20,000.
Resistance from pediatricians is another obstacle. Many prefer “watchful waiting,” or think surgery is risky or will alter kids’ growth. Some don’t recommend surgery because they think “weight is a personal responsibility rather than a medical problem,” the new policy states. –AP
The academy recommends that children and teens are generally eligible for surgery if their body mass index (BMI) is above 40, or 35 in the case of major health problems. Armstrong says the guidelines may vary by gender and age, but are similar to criteria used by surgeons from the American Society for Metabolic and Bariatric Surgery. A BMI above 30 is considered obese.
Faith Newsome Faith Newsome was a typical patient. At 5 feet, 8 inches and 273 pounds, her BMI was almost 42 and she had high blood pressure and prediabetes when she had gastric bypass surgery at Duke at age 16. After about a year, she had shed 100 pounds and those health problems disappeared. She slimmed down enough to become active in sports, shop for prom dresses and gain a better self-image. But to avoid malnutrition she takes vitamins, must eat small meals and gets sick if she eats foods high in fat or sugar. Her BMI, at just under 30, puts her in the overweight range. –AP
Newsome has no regrets after having her surgery, telling AP, “Teens should be able to discuss every option with their doctors, and surgery should be one of those options.”
Goal-setting, daily effort and limiting what one shovels into their mouth is another way to go – and it’s much cheaper.
Tyler Durden
Fri, 11/01/2019 – 21:25 - Wealth Inequality: It's Complicated
Wealth Inequality: It's Complicated
Authored by Vincent Geloso via The American Institute for Economic research,
In the debates over wealth inequality that have followed the publication of The Triumph of Injustice (authored by Emmanuel Saez and Gabriel Zucman), there have been intense discussions of the methodological choices made in the book. There have been few considerations regarding the underlying assumptions regarding the sources of inequality.
All inequalities are bundled as if they are one and the same. While they recognize that there is an optimal level of inequality (few in the popular press point this out; they simply assume that we must be beyond this optimum), no distinctions between inequalities are made. This is by far the greatest flaw in the book, and it is shared by other authors in the field.
Why is it a flaw? Consider the following case: wealth (or income) inequality could increase even if everyone’s wealth goes up by the same proportion. This would happen as long as certain groups change in relative size within the overall population. For example, immigrants tend to have lower wealth stocks than natives. However, all immigrants could experience an increase in wealth equal to everyone else, but if the immigrants’ share of the total population doubles, then we will see an increase in inequality. This is called composition bias.
Economists have long known that it is necessary to make adjustments for this bias, which generally emerges as demographic structures change. In the 1970s, Morton Paglin published a series of articles (including one in the American Economic Review) on the topic of making such adjustments for income inequality measures. The reason for making such adjustments is that these are mechanical increases of inequality that do not speak to the ability of someone to improve his economic condition relative to others.
Why should we care today? Consider the following facts.
First, there are more immigrants in the United States (their share of the population has doubled over the last decades). While immigrants are clearly better off after moving to America, they also tend to be slightly poorer than the average American. Because they swell the lower part of the income distribution, they give the impression of rising inequality (in both income and wealth). With regard to income, David Card pointed out that immigration explained 5 percent of the recent increase in inequality.
In Canada, where immigration levels are higher, immigration explains an even larger share of the increase. But why should this increase worry us? Immigration research suggests that there are important wage gains to the natives, mild gains in economic growth, and little to no fiscal cost to the population. All of this is compounded by massive gains to immigrants themselves. Clearly, that increase in inequality is not worrisome.
Second, the age of entry in the labor market has been pushed further and further back since the 1960s. As individuals in Western countries spend increasingly long periods of time in school earning nothing and investing in their human capital to earn more later, this is easily understandable. Yet, for inequality estimates, this means that there is an increase in inequality as long as scholarly pursuits are lengthened. Again, why should we be worried about that part of the increase in inequality? As Gary Becker and Kevin Murphy pointed out, this is bound to eventually produce a leveling off in inequality and probably even a decline as some other economists point out.
Third, there is the role of old age. There is a strong age–wealth relationship: older individuals are likely to be wealthier individuals. Thus, a cross-section of all individuals in different countries could lead to incorrect inferences where older societies are confused with wealthier societies. If this misleading portrait can emerge in comparisons of different countries, it can also emerge in comparisons of one country over time if the older group grows in proportion to the rest of the population (and there are fewer younger individuals).
Of the three factors I mentioned, this is probably the most important. Magne Mogstad and some colleagues, in an article in the Scandinavian Journal of Economics, made adjustments to avoid this problem. The results he and his colleagues found were that the level of inequality was lower and there was a mild decline in inequality.
In another paper (published in the Journal of Economic Inequality) studying income inequality — in Norway, over a longer period of time (1967 to 2000) — Mogstad found a similar alteration: inequality fell when the adjustments for age structure were made even if the unadjusted figures suggest an increase. To be sure, such adjustments are data-intensive and these types of data are not available over very long periods of time.
As such, there are some uncertainties as to whether or not the longer time horizon (say for a period covering 1950 to today) would yield the same result. I doubt that it would, but it is likely that increase will be dampened when the proper adjustments are made. Thus, should we be worried about the part of inequality that stems from aging? A case can be made that aging has downsides, but it’s hard to see how inequality is one of these downsides.
The sum of these points is suggestive of an important task that we have as economists. We need to decompose inequality into its core components. There are components (like aging) that have no deep implications. There are components that tell us that we should welcome more inequality because it entails clear gains for everyone. This is the case with immigration, which is bound to increase inequality in a given host country (but reduce it globally by allowing massive gains to the world’s poorest).
There are, however, components that ought to be tackled. Inequality resulting from your place of birth or from your parents’ situation is offensive to most people. If all of the increase in inequality came from this source, it would be understandable to want to tackle it.
Similarly, inequality can also result from barriers being placed in the way of the poor that limit their chances at upward mobility. Rent-seeking, which redistributes to the politically connected to shield them from competition hurts the poor. Thus, as with inherited inequality, tackling these institutional sources of the inequality increase is necessary.
These are crucial distinctions never discussed by many economists at the forefront of the conversation of inequality. They are harder to make. They require intellectual discipline and hard work (both historical and statistical). Nevertheless, they are crucial to understanding correctly the rise of inequality in recent decades. All efforts that fail to attempt this decomposition should be considered in a lesser light, and praise for such efforts should be scant.
Tyler Durden
Fri, 11/01/2019 – 21:05 - Global Anxieties Soar As China's Military Might Roars, Japan Says
Global Anxieties Soar As China's Military Might Roars, Japan Says
China’s national parade day held on Oct. 01 showcased hypersonic missiles, stealth drones, and fifth-generation fighters, a move that has produced “global anxiety” about Beijing rising as a global superpower, Japan’s defense minister told the Financial Times (FT).
China Military Parade feat. The Proclaimers, 500 Miles. You’re welcome. #banger #soundon 🔉 pic.twitter.com/5HF56CfvdK
— ABCcameramatt (@ABCcameramatt) October 2, 2019
https://platform.twitter.com/widgets.js
Defense Minister Taro Kono sat down with FT in an exclusive interview this week to discuss the geopolitical shifts in the East/South China Sea, Sea of Japan, and across the broader Pacific region.
Kono warned China has developed and deployed advanced weapons, something that has sparked fear with surrounding countries.
He made it clear that Tokyo won’t permit Washington to install intermediate-range missiles across Japan, a move that would be too dangerous and risk the island country into a period of worsening ties with China.
Kono’s comments remind us all that geopolitical tensions in the Eastern Hemisphere are elevated, and Tokyo is playing a delicate balancing act of pleasing Washington but trying not to upset Beijing.
“[China’s] budget, doctrine, weapon systems, the whereabouts of their weapon systems and their organization are not transparent,” Kono said. “We have been urging them to explain . . . but we really haven’t seen an improvement in their transparency. So, these new weapons systems simply add to global anxiety.”
China’s advanced military weapons were showcased to the world last month as the country prepares to surpass the US as the number one global superpower in the next decade.
At the current rate, Beijing’s ambitions of unraveling Pax Americana could be likely. Still, Washington has struck back with an economic war to limit China’s ascension, which of course, has forced global tensions/uncertainties to near-record highs.
Kono said that Tokyo is modernizing its forces by unveiling new military hardware, expanding cyberspace capabilities, and strengthening its defense industrial base.
He added that Tokyo would continue purchasing Lockheed Martin F-35s from the US but is also preparing to develop a domestic fifth-generation fighter in the early 2020s.
The Pentagon has spent the last several years building an F-35 friends circle around China, effectively surrounding the country with stealth fighter jets.
The trend at play is called Thucydides Trap. This is when a rising power (China) threatens to displace the status quo power (the US) — and is primarily the reason why China is building up its defense because it senses a shooting war with the US is inevitable.
As for Kono’s comments, he too knows the fate of the world in the next decade, and it’s one where China and the US could duke it out.
Tyler Durden
Fri, 11/01/2019 – 20:45 - Things Are Only Going To Get Weirder
Things Are Only Going To Get Weirder
Authored by Caitlin Johnstone via Medium.com,
Things are getting stranger and stranger. If you would have told someone ten years ago that Dennis Rodman would one day be helping to negotiate peace between North Korea and President Donald Trump, they would have assumed you were describing some weird movie cooked up in the mind of Mike Judge or the South Park guys. But in this timeline it’s an actual news story.
Everything about the last few years has been weird. The mass media’s behavior has been weird, Russiagate was weird, Ukrainegate is weird, a former presidential candidate accusing a current presidential candidate of working for the Kremlin was weird, people constantly accusing strangers on the internet of being Russian agents is weird, factions of the US government constantly leaking information against other factions of the US government is weird, the DNC getting caught rigging their primary was weird, Hillary Clinton losing the election was weird, the Skripal poisoning was weird, US government officials openly tweeting about their Venezuela coup is weird, the breakdown of the entire mainstream Syria narrative is weird, Assange’s arrest was weird, the campaign to censor the internet is weird, and this is just stuff off the top of my head from the areas I’ve been looking at in my own narrow spectrum of focus. Anyone else could list dozens of other weird new developments from their own slice of the information pie.
I often hear people in my line of work saying “Man, we’re going to look back on all this crazy shit and think about how absolutely weird it was!”
No we won’t. Because it’s only going to get weirder.
It’s only going to get weirder, because that’s what it looks like when old patterns start to fall away.
The human mind is conditioned to look for patterns in order to establish a baseline of normal expectations upon which to plan out future actions. This perceptual framework exists to give us safety and security, so disruptions in the patterns upon which it is based often feel weird, threatening, and scary. They make us feel insecure, because our cognitive tool for staying in control of our wellbeing has a glitch in it.
When you’re talking about a species that has been consistently patterned towards its own destruction, though, a disruption of patterns is a good thing. Our ecocidal, warmongering tendencies have brought us to a point that now has us staring down the barrel of our own extinction, and that is where we are surely headed if we continue patterning along the behavioral trajectory that we have been on. Only a drastic change of patterns can change that trajectory. And we are seeing a change of patterns.
Sure it’s sloppy as hell. Pattern disruption always is. Show me someone who recovered from a severe addiction to hard drugs who enjoyed a smooth, easy transition into sobriety with no major changes in their life besides the absence of substance abuse. Show me someone who left an abusive long term relationship whose life wasn’t drastically upended by it. People see safety in patterns, even unhealthy patterns, and they build their own patterns on the patterns of those in their lives. When any of those patterns disappear for anyone involved, it can feel unsafe for many people around them.
When patterns first start vanishing, it can look like things are getting worse. Because a disappeared pattern is an absence of something and not a thing in itself, people don’t see it, because the human mind is naturally drawn toward things and not the absence of things. So their attention will be drawn toward whatever things start to happen in the absence of the old pattern, which won’t necessarily be a pleasant or attractive thing, and they’ll say “Oh no! Things are getting worse now!” No they’re not. An unhealthy pattern disappeared, and in its absence something unappealing fell into place for a bit. But the absence of the old unhealthy pattern is a good thing, and in the long run will lead to good results, in the same way that leaving an abusive marriage may lead to financial hardship and stress in the short term but will lead to thriving in the long term.
I have become convinced in my personal life that humans are far more capable of breaking patterns than they realize. There’s an intelligence running things below the loud thinky noises of our inner narrative generators which most of us aren’t aware of, but which I’m convinced is disappearing old behavior patterns in our species, both collectively and individually.
We’re all mentally aware that things need to change away from the patterns we’ve been collectively engaged in, but we’ve been unable to bring about those changes in patterning because our efforts to do so arise from the same conditioning patterns that got us into this mess in the first place. Our patterns have led us to violent revolutions, but those just lead to governments which end up perpetuating the same old patterns we were trying to end. Our patterns have led to nonviolent political movements, but those end up being co-opted and their energy fed into the same collective patterning. Despite being told in movement after movement that the real enemy is the King or the Emperor or the aristocracy or the Jews or the Communists, over and over again the real enemy behind the curtain has ended up being our own conditioned tendency to keep repeating the same collective behavior patterns.
That’s what seems to be evaporating. Not because anyone came up with the Ultimate Political Ideology in their thinky brains, not because some clever revolutionary came up with the Ultimate Plan for Toppling the Status Quo, not because some adept killers killed those in power and replaced them with themselves, but because this mysterious guiding intelligence running the scenes far below the level of verbal thought has been disappearing our patterns in a way we don’t notice because we’re not conditioned to notice absences.
The observation of the obvious fact that humankind is deeply conditioned is what has led to philosophical debates throughout the ages of the existence of free will. How can a species so beholden to its preconditioned patterning have freedom of choice in its actions? In my experience the answer is that there is something at play within each of us which provides the potential to discard old patternings. We don’t have any free will as to how a given conditioned behavior pattern will play out as long as we’re still holding them, but there is something in all of us which is capable of opening the door to relinquishing a mental habit altogether. This is the only extent to which free will may be said to exist.
Sometimes I wonder if the world as we knew it really did end in December 2012 as so many mystics, psychics and psychonauts predicted. Not in a nuclear holocaust or giant meteor obviously, but in the beginning of an unravelling of the glue that holds human behavior patterns in place. There certainly hasn’t been a normal US presidential election since that date, and there doesn’t seem to be one on the horizon in the foreseeable future. Things have been getting stranger and stranger ever since, and this trend appears to be accelerating rather than slowing down.
Things are weird, and they’re only going to keep getting weirder. Buckle up, buttercup.
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Tyler Durden
Fri, 11/01/2019 – 20:25 - "Born For This? I Don't Think So" – Trump Mocks Beto As 'Contender' Drops Out Of Presidential Race
"Born For This? I Don't Think So" – Trump Mocks Beto As 'Contender' Drops Out Of Presidential Race
Update (1805ET): President Trump was quick to react:
Oh no, Beto just dropped out of race for President despite him saying he was “born for this.” I don’t think so!
— Donald J. Trump (@realDonaldTrump) November 1, 2019
https://platform.twitter.com/widgets.js
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Having plunged from over 10% to just 1% in the PredictIt betting, former Texas congressman (and failed Texas Senate seat contender) Beto O’Rourke is dropping out of the race to become the Democratic Party’s next Presidential candidate.
Quite a collapse since he entered the 2020 primary in the middle of March with the aura of a celebrity, cheered by rank-and-file Democrats, to being among the lowest polling of the many candidates – even after very strong fundraising efforts early on.
“My service to the country will not be as a candidate or as the nominee,” he said.
Source: Bloomberg
The New York Times reports that Mr. O’Rourke made the decision to quit the race in the middle of this week, on the eve of a gathering Friday of Democratic presidential candidates in Iowa, according to people familiar with his thinking. He is not expected to run for any other office in 2020, despite persistent efforts by party leaders and political donors to coax him into another bid for the Senate.
A spokesman to Mr. O’Rourke reiterated that stance on Friday.
“Beto will not be a candidate for U.S. Senate in Texas in 2020,” said Rob Friedlander, an aide to Mr. O’Rourke.
His campaign has been under extreme financial strain, and Mr. O’Rourke’s advisers concluded that proceeding in the race might have meant making deep cuts to his staff in order to pay for advertising and other measures to compete in the early primary and caucus state.
What will the media do now that their once-favorite is gone?
But in a recent interview with Politico, Mr. O’Rourke said that if he did not prevail in the 2020 presidential primary he would not become a candidate again.
“I cannot fathom a scenario where I would run for public office again if I’m not the nominee,” Mr. O’Rourke said last month.
You promise!?
Read his full statement below:
Our campaign has been about seeing clearly, speaking honestly and acting decisively in the best interests of America.
Though it is difficult to accept, it is clear to me now that this campaign does not have the means to move forward successfully. My service to the country will not be as a candidate or as the nominee. Acknowledging this now is in the best interests of those in the campaign; it is in the best interests of this party as we seek to unify around a nominee; and it is in the best interests of the country.
I decided to run for President because I believed that I could help bring a divided country together in common cause to confront the greatest set of challenges we’ve ever faced. I also knew that the most fundamental of them is fear — the fear that Donald Trump wants us to feel about one another; the very real fear that too many in this country live under; and the fear we sometimes feel when it comes to doing the right thing, especially when it runs counter to what is politically convenient or popular.
I knew, and I still know, that we can reject and overcome these fears and choose to instead be defined by our ambitions and our ability to achieve them.
I knew that we would have to be unafraid in how we ran the campaign. We’d have to run with nothing to lose. And I knew that our success would depend not on PACs or corporations but upon the grassroots volunteers and supporters from everywhere, especially from those places that had been overlooked or taken for granted.
We should be proud of what we fought for and what we were able to achieve.
Together we were able to help change what is possible when it comes to the policies that we care about and the country we want to serve. We released the first comprehensive plan to confront climate change of any of the presidential candidates; we took the boldest approach to gun safety in American history; we confronted institutional, systemic racism and called out Donald Trump for his white supremacy and the violence that he’s encouraged against communities that don’t look like, pray like or love like the majority in this country; and we were one of the first to reject all PAC money, corporate contributions, special interest donations and lobbyist help.
We proposed an economic program that focused on both equality and equity and would give every American the certainty that one job would be enough; and a healthcare plan that would guarantee that every one of us is well enough to live to our full potential.
We knew the only way our country would live up to its promise is if everyone could stand up to be counted. We released the most ambitious voter registration and voting rights plan, one that would bring 55 million new voters into our democracy, and remove barriers for those who’ve been silenced because of their race, ethnicity or the fact that they live with a disability.
We spoke with pride about El Paso and communities of immigrants. We elevated the plight and the promise of refugees and asylum seekers. And we proposed nothing short of rewriting this country’s immigration laws in our own image, to forever free from fear more than 11 million of our fellow Americans who should be able to contribute even more to our shared success.
And at this moment of truth for our country, we laid bare the cost and consequence of Donald Trump: the rise in hate crimes, the terror attack in El Paso, the perversion of the Constitution, the diminished standing of the United States around the world. But we also made clear the common responsibility to confront him, to hold him accountable and ensure that he does not serve another term in office. Committing ourselves to this task not as Democrats or Republicans, but as Americans first before we are anything else.
I am grateful to each one of you, and to all the people who made up the heart and soul of this campaign. You were among the hundreds of thousands of our fellow Americans who made a donation, signed up to volunteer or spread the word about this campaign and our opportunity to help decide the election of our lifetime.
You have been with me from the beginning, through it all. I know that you did it not for me personally, not for the Democratic Party, but for our country at this defining moment. Though today we are suspending this campaign, let us each continue our commitment to the country in whatever capacity we can.
Let us continue to fearlessly champion the issues and causes that brought us together. Whether it is ending the epidemic of gun violence or dismantling structural racism or successfully confronting climate change before it is too late, we will continue to organize and mobilize and act in the best interests of America.
We will work to ensure that the Democratic nominee is successful in defeating Donald Trump in 2020. I can tell you firsthand from having the chance to know the candidates, we will be well served by any one of them, and I’m going to be proud to support whoever that nominee is.
And proud to call them President in January 2021, because they will win.
We must support them in the race against Donald Trump and support them in their administration afterwards, do all that we can to help them heal a wounded country and bring us together in meeting the greatest set of challenges we have ever known.
I’m confident I will see you down the road, and I look forward to that day.
Thank you for making this campaign possible, and for continuing to believe that we can turn this moment of great peril into a moment of great promise for America and the world.
With you always, and forever grateful.
Beto
Maybe a little more Spanish-speaking, a little more gun-grabbing, a few more dentist appointment videos, and a little more swearing would have done the job… hey, you know what they say – 3rd time’s the charm (just ask Hillary)!
Tyler Durden
Fri, 11/01/2019 – 20:22 - Iran Foils Plot To Oust Iraqi PM In Latest Sign Of Tehran's Growing Influence
Iran Foils Plot To Oust Iraqi PM In Latest Sign Of Tehran's Growing Influence
Violent protest movements have erupted around the world in 2019, making it perhaps the most chaotic year since 2011, when the Arab Spring uprisings that swept the Middle East toppled several governments in quick succession.
Not just Hong Kong, Venezuela, Syria but dozens of countries have been rocked by destabilizing riots and protest movements, including Lebanon, Chile, Argentina, Iran, Iraq, Libya, Egypt – the list goes on. An increasingly violent protest movement in Chile recently prompted the cancellation of the APEC conference, where the US and China were supposed to iron out “Phase One” of their trade deal (now the two sides need to find some other neutral territory for their meeting).
Though the Middle East hasn’t exactly been the most stable region in recent years, 2019 has been particularly troubled. After two years of relative calm, protests that started in Baghdad one month ago have spread across the country. Roughly 250 people have been killed in the chaos that has ensued.
Meanwhile, over in Lebanon, a wave of anti-government protests has swept across the country, motivated by many of the same factors: The controversial influence of the Iranian government in local affairs, economic mismanagement and endemic poverty, and a political establishment that’s widely seen as corrupt.
But in Lebanon, earlier this week, Prime Minister Saad Hariri and his cabinet resigned. Hariri said he had “reached a dead end” following nearly two weeks of brutal protests that have convulsed the tiny nation and led to bloody clashes with the militant wing of Hezbollah, which is the junior partner to Hariri’s party in the Lebanese government.
Something similar almost happened in Iraq. According to an exclusive Reuters report, Iran stepped in to prevent the ouster of Iraqi PM Abdel Abdul Mahdi, who was reportedly on the cusp of being ousted by two of the country’s most influential political figures as the anti-government protests worsened.
The two men are themselves political rivals: Populist cleric Moqtada al-Sadr and Hadi al-Amiri, both of whom control Shiite backed militias
Populist Shi’ite cleric Moqtada al-Sadr demanded this week that Abdul Mahdi call an early election to quell the biggest mass protests in Iraq since the U.S.-led invasion that toppled Saddam Hussein in 2003.
The demonstrations are fueled by anger at corruption and widespread economic hardship.
Sadr had urged his main political rival Hadi al-Amiri, whose alliance of Iran-backed militias is the second-biggest political force in parliament, to help push out Abdul Mahdi.
But a surprise visit by Qassem Soleimani, the head of the IRGC international offshot Quds Force intervened by asking al-Amiri and his Iranian-backed militias to continue supporting Abdul Mahdi. Several senior Iraqi officials have told reporters that Soleimani showed up at a secret meeting in Baghdad on Wednesday that was supposed to be run by Abdul Mahdi, according to Israeli newspaper Haaretz.
Soleimani and many of the militia leaders who are loyal to Amiri raised concerns at the meeting that ousting Abdul Mahdi could weaken the Popular Mobilization Forces, an umbrella group of mostly Iran-backed Shiite militias who have allies in the Iraq’s parliament and government.
As commander of the Quds force, Soleimani helps coordinate Tehran-backed militias across the region in Iraq, Syria and Lebanon. He is a frequent visitor to Iraq, and, much to Israel’s chagrin, his growing influence within the Iraqi government is emblematic of Iran’s growing influence not only in Iraq, but in Lebanon and elsewhere. And if Iraq slides into chaos, Iran risks losing all of the influence it worked so hard to build. At times it seems as if Iran is an even larger powerbroker in the Shiite majority country than the US.
Abdul Mahdi’s fate remains unclear – despite the maneuver behind the scenes to keep him in place. He took office a year ago, but the protests that have rocked his government are unlike anything experienced by either of his predecessors who have ruled since the fall of Saddam Hussein.
Sadr, the populist cleric, was less than pleased with Soleimani’s intervention and Amiri’s decision to go back on his pledge to try and topple the PM. “I will never enter into alliances with you after today,” Sadr reportedly said to Amiri after the meeting, according to Reuters.
Tyler Durden
Fri, 11/01/2019 – 20:05 - Enemy Assets – Who Really Betrayed Their Country?
Enemy Assets – Who Really Betrayed Their Country?
Authored by Robert Gore via Straight Line Logic blog,
A dictionary definition of asset is: a useful or valuable thing, person, or quality. The word has been much in the news lately. Usually coupled with “Russian,” it’s a favorite smear of establishment stalwarts like Hillary Clinton and establishment media like The New York Times. It’s been directed against President Trump, Congresswoman Tulsi Gabbard, and others who question the US’s interventionist foreign and military policies.
By implication, anyone who is an asset of a foreign country places the interests of that foreign country ahead of their own country’s. The term is especially odious when appended to a country commonly considered an enemy. Examining US foreign and military policy the last several decades, an unasked question is: to whom or what has that policy been “useful or valuable”? Establishment attacks on Trump and Gabbard serve to clarify who has actually been assets for unfriendly governments, and it’s not Trump or Gabbard.
At the end of WWII, the US was at the apex of its power and no nation could directly challenge it. After the Soviet Union detonated its first atomic bomb in 1949, the two countries settled into the Cold War stalemate that lasted until the Soviet Union’s dissolution in 1991. Actual use of nuclear weapons was considered potentially catastrophic, to be avoided by either side except to counter a nuclear strike—either preemptively or after the fact—by the other side. They were not considered a battlefield weapon, although there were elements of the American military command, and probably the Soviet command as well, that at various times advanced consideration of battlefield use.
The rest of the world’s nations tried to protect themselves under the American or Soviet nuclear umbrellas. Both countries’ confederated alliances—essentially empires—were based on that ultimate protection, but the very unthinkability of nuclear weapons’ use meant that other calculations entered into governments’ and rulers’ calculations of strategic advantage. Just because a nuclear power wanted something or desired a certain outcome didn’t necessarily mean a nation had to comply, especially if the envelope was not pushed too far. Were you going to drop the bomb on a country that nationalized your oil company?
The fundamental failure of both the American and Soviet leadership was to recognize a simple lesson of history: more resources and energy are required to maintain an empire than the resources and energy that the empire can extract from it. Empires are inevitably victims of their own success. As their geographic boundaries expand arithmetically, the challenges of defending borders and subjugating conquered territories expands exponentially. Loot from the colonies fuels corruption among the rulers, who typically buy off the peasantry with a bread-and-circus welfare state. Taxes rise, the state grows, money is debased, the work ethic and productivity crumble, and decadence and internal rot metastasize. Eventually the empire succumbs to revolution, invasion, or both.
Empires never win the hearts or minds of all of their conquered subjects, and some resist. Nowadays, all but the poorest of the subjugated can avail themselves of inexpensive computing and communications. Expensive offensive weaponry and large numbers of troops can be destroyed or rendered inoperative by cheap rockets and artillery, improvised explosive devices, mines, drones, and other deadly gadgetry. The locals always know the territory and language better than their conquerers and can usually count on the support of the civilian population.
The successful attack on a Saudi oil facility, allegedly by Yemeni Houthis, is unprecedented because drones were used, the target was not military but industrial, and it was on the would-be conqueror’s home territory. In the larger picture, however, it’s merely the most recent manifestation of a trend that has been going on since at least the Vietnam War: the destruction of the expensive with the cheap. The US’s multi-billion dollar power grid, say, could be brought down through a combination of sabotage and computer hacking that would probably take less than twenty dedicated “revolutionaries” and under $100,000. That too would be unprecedented, but not really surprising.
Those who have called the shots for the US since World War II could have grasped the ultimately futility of empire from even a cursory reading of history. They’ve certainly had that lesson borne home to them by their own experience, if not from the Korean War then certainly from the Vietnam War. By now, it’s obvious that empire and US interventionism has been a net loser for the US, which can no longer be said to be at an apex of unchallengeable power. If its policies have been a net loss for the US, does that mean they have been a net gain for those the US defines as its enemies?
In 1953, a coup sponsored by the CIA and Great Britain’s MI6 deposed Iran’s democratically elected Prime Minister Mohammad Mosaddegh, and replaced him with Shah Mohammad Reza Pahlavi, an autocratic and repressive US government puppet. He was deposed in 1979 by Shia fundamentalists, who set up a theocratic regime aligned with neither the US or the Soviet Union, although decidedly hostile to the US.
Without reviewing the tangled history of US-Iranian relations since 1979, it’s fair to say that they’ve remained hostile. It’s been the fondest hope of the US foreign policy establishment and its allies in the Middle East, notably Saudi Arabia and Israel, to unseat the theocratic regime and install another American puppet. With the exception of the Iranian nuclear agreement abrogated by President Trump, there has been little comity between the two countries’ governments. Within the Trump administration there are officials who openly talk of waging war and fomenting regime change. The administration has resorted to harsh, punitive sanctions against both the country and many of its key figures to effectuate their objectives.
Yet, “enemy” Iran has clearly been the biggest beneficiary of US policy in the Middle East. Iranian intelligence, military, and political elements have infiltrated and gained influence in Afghanistan, Iraq, Syria, Lebanon, and Yemen, all nations against which the US or its Saudi Arabian or Israelis allies have waged offensive war. A potential “Shia Crescent” from Iran to the Mediterranean, cited as a danger justifying US interventions, is now a reality not in spite of, but because of those interventions. Iran’s standing in the Middle Eastern has not been this high for at least the last several centuries.
US hostility has also driven Iran into the loving arms of Russia and China for weapons, industrial and financial aid, and markets for its oil. This is not the only instance that Russia and China have been the beneficiaries of the US’s maladroit moves in the Middle East, Indeed, their Belt and Road initiative, spanning Asia and the Middle East and now extending to Eastern Europe and Africa, has been ideologically midwifed by the US. Nations have been offered a choice: US bullets, bombs, and bullying, or Chinese and Russian infrastructure funding and expertise.
The Chinese and Russians aren’t acting from altruistic motives, but the recipients realize that and what America offers isn’t altruistic either. Choosing the former is an easy choice with few negative consequences. What will the US do to nations that choose to enter the Russian-Chinese orbit, start dropping nuclear bombs? Take on Russia or China? The case of Syria—in the Russian orbit since the 1940s—is instructive. The US couldn’t foment its desired regime change there, although according to Obama we were fighting the “junior varsity.” Once the varsity—Russia—entered the picture it was all over for the US effort.
Even if there were no Belt and Road Initiative, the Russians and Chinese, now cast as the US’s great power enemies, have reaped enormous benefits from the US’s interventions in the Middle East and Northern Africa. Having stepped away from conquest, except for potentially the “conquests” which creditors exact from debtors who cannot pay (a favorite US stratagem), Russia and China have been able to devote substantial resources to their own infrastructures and the development of high-tech weaponry that renders any US government impetus for military confrontation with them delusional (see “The Illusion of Control, Part 1“).
Every yuan and ruble not spent on US-style interventionism, and every drop of blood not spilled, is money and manpower available for pursuits far more rewarding than intrigue, sabotage, skullduggery, corruption, regime change, war, and the infliction of collateral damage on populations who, sensing the would-be conqueror’s indifference to their plight, often become terrorists, refugees or both—”blowback”—raising the butcher’s bill even higher. Let the US and its allies bear those costs.
If US foreign and military policy for many decades has been a detriment to the US and a benefit to those the US government terms our enemies, particularly Russia, China, and Iran, are not the architects and proponents of those policies actually the “assets” of those countries? That such a group includes virtually the entire US establishment doesn’t mean that the question shouldn’t be asked, nor that the answer is not in the affirmative. Keep in mind that it is this group that has lately been throwing around terms like “assets,” “traitors,” and “treason.” In light of the clear benefits they have bestowed on the enemies of their choosing, how can intellectual turnabout in light of the actual results of their policies not be fair play?
It wasn’t Donald Trump or Tulsi Gabbard who authorized the US’s failed wars and regime-change efforts. Unlike most of her critics, Gabbard fought in some of them! That Trump continues such efforts justifiably elicits condemnation, but he’s been in office less than three years and America’s malevolent misadventures have gone on for over six decades. During that time, he’s been one of the few prominent figures to even question them, and he’s been roundly criticized for it.
The trillions of dollars spent and the millions of victims killed and wounded, whose lives have been upended, both from our own military and the nations we’ve devastated or destroyed, demands what we’ll never get—a comprehensive investigation, a thorough accounting, and justice blind to the positions, wealth, and power of the people responsible. It requires a clear-eyed assessment of how much they have benefited our enemies—and themselves—and that will mean, in all justice, calling them what they are: enemy assets, traitors guilty of the darkest treachery to their country.
Tyler Durden
Fri, 11/01/2019 – 19:45 - Total US Debt Surpasses $23 Trillion For The First Time
Total US Debt Surpasses $23 Trillion For The First Time
After total US debt was stuck at $22 trillion for five months, from March until August, until a deal was cobbled together by Congress to once again raise the debt ceiling, the obligations of the Federal government have soared fast and furious, and in just the past three months, total US debt increased by $1 trillion, surpassing $23 trillion as of Halloween 2019: truly a scary testament to America’s insatiable thirst for debt.
Putting this increase in context: since Nov 8, 2016, when Donald Trump was elected US president, and when US debt was $19.8 trillion, the federal debt has increased by $3.2 trillion
Going further back, to November 2008 when Barack Obama won the presidency, total US debt was $10.6 trillion. Since then it has more than doubled by $12.4 trillion.
Going further back is largely meaningless, because as the two chart above show, under just the last two US presidents, total US debt has increased by 115%, to a record $23 trillion.
Over the same period, US GDP increased (in nominal dollars) from $14.8 trillion to $21.5 trillion, a far more modest increase of $6.7 trillion. This also means that over the past 12 years, or the presidency of Obama and Trump, it took $1.85 in debt to generate $1.00 in GDP growth, the highest such ratio on record.
One other startling observation: whereas US debt prior to the financial crisis of 2008 was rising at a fairly aggressive pace, extrapolating current total US debt based on where it would have been had it not been for the Fed’s housing and credit bubble, indicates a level just around $16 trillion. Instead, debt is currently at $23 trillion. This suggests that it has cost the US an additional $7 trillion in debt, or 44% of what debt would have been had it not been for the Fed’s serial bubble creation just to paper over the consequences of the global financial crisis.
The ominous side effects of this record debt pile up are starting to be felt in the US budget as well: in fiscal 2019, the government spent just shy of $600 billion on interest payments equivalent to nearly the entire US Medicare budget, and more than the amount spent on the combined costs of education, agriculture, transportation and housing.
Furthermore, as we reported last week, the US debt is expected to increase by well over $1 trillion annually for the foreseeable future: while deficit for 2019 came in just under $1 trillion, at $984 billion, it is expected to grow by over $1 trillion each year for the foreseeable future.
“Reaching $23 trillion in debt on Halloween is a scary milestone for our economy and the next generation, but Washington shows no fear,” said Michael A. Peterson, CEO of the conservative Peter Peterson Foundation. “Piling on debt like this is especially unwise and unnecessary in a strong economy.”
While the key drivers of US government spending are mandatory programs such as Social Security, Medicare and anti-poverty programs, a major fiscal stimulus enacted by the Trump administration – which as we reported yesterday failed to achieve any sustainable increase in US GDP – has grown the deficit considerably.
One final piece of bad news: according to the CBO’s baseline forecast, the US debt picture is dismal and only set to get far worse. The chart below hardly needs any explanation.
Tyler Durden
Fri, 11/01/2019 – 19:25 - A "Red Army of Mediocrities": Our Soviet-Style University System
A "Red Army of Mediocrities": Our Soviet-Style University System
Authored by Thomas DiLorenzo via LewRockwell.com,
In an April 15 Boston Globe article entitled “A Message to All Professional Thinkers: We Either Hang Together or We Hang Separately,” historian Niall Ferguson described the now-routine “outing” of conservative professors at American Universities by the hard-Left Marxists who control most of them. The usual procedure is to first lie about something the conservative (or libertarian) supposedly said to whip a “Twitter mob” into a hateful frenzy. The local media then pick up on it and pile on. Spineless faculty “colleagues” either cower in fear or join the mob by signing a petition to curry favor with the administration (to increase their chances of another 1 percent pay raise). If the conservative or libertarian professor is not tenured, he or she is fired. Otherwise, he or she is marginalized, harassed, discriminated against, and “encouraged” to leave voluntarily to avoid such a miserable existence. No human resources bureaucrats are ever concerned about “hostile work environments” when it comes to academic conservatives or libertarians; only the Left is to be protected from hostility and “insensitive” speech.
The KGB-style faculty and administrators who enforce this pervasive censorship are what Ferguson calls a “Red Army of Mediocrities.” They are mediocrities because very few of them are real scholars but uneducated political rabble rousers who simply stayed in school their entire adult lives, armed with terminal degrees in such phony and fraudulent academic “disciplines” as “Feminist Theology” or “Global Studies.” They are, says Ferguson, descendants of “the illiberal, egalitarian ideology that once suppressed free speech in Eastern Europe.”The Real Lincoln: A Ne…Thomas J. DilorenzoBest Price: $1.99Buy New $7.68(as of 11:05 EDT – Details)
It’s far worse than Ferguson describes in his short op-ed, for anti-conservative and anti-libertarian discrimination in hiring has been rampant for decades. Yours truly recalls attending a Liberty Fund conference about thirty years ago where one of the other participants, Professor Henry Manne, remarked that “we have lost the universities.” That was thirty years ago, and he was referring to the nearly complete Leftist takeover already, at that time, of the American university system and its assault on academic freedom and free speech. The Leftist assault on free speech has festered exponentially since then with speech codes, safe spaces, requirements to report to the authorities “unsafe speech,” the organization of riots to “protest” conservative campus speakers, and other Stasi/KGB-style tactics.
There are a few exceptions here and there, such as Grove City College and Hillsdale College, neither of which has ever accepted government funding, and a few academic programs funded by wealthy alumni, but they are a drop in the academic ocean. Even then, the conservative academics funded by such alumni donors are usually thought of by the majority Leftist faculty as imposters in need of extermination and expulsion.
Such programs may comprise less than one percent of a university’s faculty budget, with the rest funded by government, yet the Leftist faculty complain endlessly about the supposedly illegitimate “bias” caused not by the 99% government funding but by the minute private funding. Political funding of 99% of a university’s budget could not possibly create a pro-government bias in research and teaching, they insist; only private, voluntary donations can do that. This goes for hundreds of incorrectly labeled “private” colleges and universities which, though calling themselves “private,” receive millions or billions in government funding annually. “He who takes the king’s shilling becomes the king’s man” is as true as ever.
Niall Ferguson ends his op-ed with a call for a “Nonconformist Academic Treaty” among university faculty and administrators who still defend freedom of speech. The communistic academic censors must be confronted with “massive retaliation,” just as the Soviet Union was threatened with such by NATO during the Cold War, he says. This is what he means when he says that “we” must hang together or hang separately.
Such a “treaty” would likely garner very few signatures because of the fact that, with few exceptions, American academe is a socialist institution. Almost every last college and university is partly or totally funded by government, and with government funding comes government control of the means of production, the very definition of socialism. Almost all university professors are therefore essentially government bureaucrats and, like all bureaucrats, they understand that the way to survive is to never, ever, break the rules or rock the boat, no matter how rotten the rules may be. They understand that if they do, the Red Army of Mediocrities will take its revenge, fire them if possible, or at least never again give them a merit pay raise. They may also end up being assigned an 8 A.M. class on the main campus along with an evening class at one of the far-away branch campuses on the same day as an added touch of petty revenge.
University boards of trustees are mostly useless since they are easily bamboozled, lied to, or intimidated by academic administrators. Many of them remain quiet, for to complain and not be asked back as a trustee may harm their social lives. (At my own place of employment alumnus Tom Clancy, the famous author, once complained at a trustee meeting that the tuition was so high that the son of a mailman like himself could never afford it. He was dropped from the board the next year). There are no shareholders since universities are either government bureaucracies or “nonprofit” institutions, so there is no shareholder pressure either. It is even confusing as to who the real “consumers” are since the students who sit in the classrooms are rarely the ones paying the extortionate tuition bills – at least until they graduate and are confronted with mountains of government-guaranteed student-loan debt.The Road to Serfdom: T…F. A. Hayek, Bruce Cal…Best Price: $2.31Buy New $2.99(as of 10:05 EDT – Details)
All of this creates a socialistic system of monopoly control of “higher” education that is now firmly in the hands of Leftist ideologues and a large army of uneducated, academic frauds and imposters who are sworn enemies of free speech, academic freedom, and freedom of inquiry. As F.A. Hayek warned in The Road to Serfdom in a chapter entitled “The End of Truth,” under collectivism of any form, “truth” is not determined by research, discussion, debate, and scientific inquiry, but by the platitudes and decrees handed down by the state. In such a world “contempt for intellectual liberty” is “found everywhere among intellectuals who have embraced a collectivist faith and who are acclaimed as intellectual leaders.” Under such a regime “intolerance, too, is openly extolled,” wrote Hayek in 1944. This is a perfect description of American universities today.
This is the road American academe has been on for several generations now, and no “treaty” among conservative professors, most of whom are, like all government bureaucrats, just counting the days until retirement, is likely to salvage what is left of academic freedom. Salvation will lie in the private institutions of the civil society, educational institutions like the Mises Insitute, the home-schooling movement, the Ron Paul Curriculum, and most importantly, the secession of the masses from the socialist indoctrination academies that American universities, like the “public” schools, have become. Meanwhile, we need more Niall Fergusons to at least ring alarm bells over the necessity of mass resistance.
Tyler Durden
Fri, 11/01/2019 – 19:05 - Hong Kong Officer Faces Death Threats After Firing Live Round, Says He "Doesn't Regret" It
Hong Kong Officer Faces Death Threats After Firing Live Round, Says He "Doesn't Regret" It
It’s unclear exactly when it happened (the BBG story doesn’t say), but Jacky, a Hong Kong Police Officer was working during one of the weekend demonstrations/riots that have become typical of the city in recent months. He had worked many prior demonstrations. But this time, he was beginning to feel threatened.
For hours, his unit had been engaged in what increasingly felt like a battle with protesters. Several rounds of non-lethal weapons fire, including pepper spray and rubber bullets, but the crowd wouldn’t disperse.
So he decided to engage in an option commonly viewed as a last resort. He pulled out a gun, and fired a live round into the air.
“It was the first time I felt that way – not that I would necessarily die, but that something was going to happen to me and my unit,” he said, speaking to a news outlet for the first time since the incident. “It’s the thing I had to do at that moment.”
Nobody was hurt, but for Jacky, the danger was only just beginning. Protesters accusing him of police brutality quickly doxxed him, and began posting death threats online. Two days after the shooting, BBG reports, the calls flooded in filled with violent threats about his family.
One online post offered a bounty: 500,000 HKD to kill Jacky.
“Do you feel heroic?” one person asked. Others simply cursed at him. He switched off his phone after a day, but then the emails came in droves. Some were death threats: One message online offered a HK$500,000 ($64,000) bounty to kill him.
Police acted swiftly to increase his protection. He was moved to a secure location with his family. He doesn’t regret firing the round, which he says he did to save his colleagues. But the response has been baffling. The repercussions facing his family, even his young daughter, have been surprising.
Jacky quickly moved out of the police quarters where he was staying and into a secure location. He didn’t leave the room for three weeks afterward, he said. But for him, what happened to his daughter was even worse: Shortly after he pulled her from school, her desk was painted black and vandalized. She hasn’t been able to return.
“I don’t regret having to save my colleagues, but regret that it ended up having an effect on my daughter,” Jacky said, adding that the psychological pain of the personal attacks after his information was leaked was far worse than battles with protesters involving Molotov cocktails, bricks and corrosive acid. “I don’t know how our society has come to this.”
According to BBG, both police and protesters have been victims of this kind of ‘doxxing’. At least 11 people have been arrested for doxxing officers, which can lead to charges of disclosing personal information without consent, incitement or access to a computer with dishonest or criminal intent, BBG says. Nobody has been arrested for doxxing protesters.
Beyond the physical violence, protesters and police alike have been victims of “doxxing,” when personal information is maliciously leaked online. In August, former Hong Kong Chief Executive Leung Chun-ying promoted a website offering cash bounties to identify demonstrators. The following month, a Weibo account of China’s state-owned CCTV accompanied its post about a doxxing website with a call to “unmask” protesters.
Making his financial situation even more precarious, Jacky has been on leave since the incident as HK police investigate (standard procedure any time a weapon is discharged). It’s likely the investigation will clear Jacky, but protesters are more worried about the police using these incidents as a convenient excuse to bring “the Great Firewall” to Hong Kong. Though at this point, it seems like warm relations between the police and large swaths of the people won’t ever be restored. According to Jacky, the situation between police and the public has gotten persistently worse. When protests started in June, he said he heard some demonstrators swearing at police.
“That night, I still thought our job as police was to facilitate these protests,” he said, noting that he was struck by how young some of the protesters were. “I was asking them to leave. ‘Why don’t you go home? Do your parents know where you are?'”
But they turned increasingly violent and anti-police as the weeks wore on. To deal with this, Jacky says he constantly reminds himself that the protesters aren’t really shouting at him, they’re shouting at the government.
Tyler Durden
Fri, 11/01/2019 – 18:45 - Enough "Quid Pro Quo" Gaslighting!
Enough "Quid Pro Quo" Gaslighting!
Authored by Alex Bruesweitz via HumanEvents.com,
Horse trading is the oxygen of politics; it is how politicians are persuaded to care about things that otherwise would not make their radar. Not only does it happen all the time, but it is a core feature of our political system; representative government relies on this kind of political trading to ensure a plurality of interests and needs are satisfied.
Members of Congress routinely trade “policy for policy.” You sponsor my bill, and I’ll sponsor yours, you vote for a road in my district, and vice versa. Members even trade policy for personnel and hiring purposes: you support my bill, and I’ll let so-and-so’s hearing move forward, you appoint me to this, and I’ll recommend your protege for that. These deals can even cross the blood/brain barrier between states and the federal government.
It is not corruption. It’s the warp and woof of a democratic political system. But in routinely branding President Trump’s dealings with Ukraine as potential “corruption,” and pointing to the exchange of unrelated asks as proof of that corruption, our friends in the fourth estate are acting in willful ignorance and bad faith.
The President has taken a firm position that he did not hold out foreign aid to Ukraine as a condition for investigating Hunter Biden’s activities there. But, even if he did, bargaining isn’t corruption—it’s policymaking.
Rod Blagojevich.
GOVERNANCE WOULD HARDLY BE POSSIBLE
An esteemed panel of federal judges in Chicago made precisely this point a few years ago. You may recall the prosecution of former-Illinois Governor Rod Blagojevich on various federal charges. And although the judges largely upheld his conviction, the U.S. Court of Appeals for the Seventh Circuit commentary on the affair was crystal clear. At least one of the counts that the trial judge had sent to the jury was just politics, pure and simple, and could not have been a crime.
“[A] proposal to trade one public act for another, a form of logrolling, is fundamentally unlike the swap of an official act for a private payment.”
In 2008, then-Illinois Senator Barack Obama was elected to serve as President of the United States. Appointment of his successor in the Senate, until an interim election was held, fell by operation of statute to Governor Blagojevich. In the words of Judge Frank Easterbrook, writing for the court, the Governor saw this as a “bonanza.” Among other things, Governor Blagojevich (through intermediaries) was alleged to have asked President-elect Obama for an appointment to the Cabinet (for himself) in exchange for him appointing Valerie Jarrett to the interim seat in the Senate. Alternatively, he was alleged to have asked the President-elect to “persuade a foundation to hire him at a substantial salary after his term as Governor ended, or find someone to donate $10 million and up to a new ‘social welfare’ organization that he would control.”
The President-elect declined on all counts, but the lawyerly point is this: the trial judge told the jurors that if it found the Governor had proposed any of these three deals, it could return a verdict of guilty.
Not so fast, said Judge Easterbrook.
Writing for a unanimous court, Judge Easterbrook noted that, indeed, the trial judge’s instructions to the jury supported a conviction “even if [the jury] found that his only request of Sen. Obama was for a position in the Cabinet.” But not all the Governor’s proposals were the same. According to the court, “[A] proposal to trade one public act for another, a form of logrolling, is fundamentally unlike the swap of an official act for a private payment.”
In other words, swapping one policy for another is a political commonplace. “Governance would hardly be possible without these accommodations,” the court went on to observe.
Rudy Giuliani.
INVESTIGATING CORRUPTION IS—AND SHOULD BE—POLICY
To be sure, some folks may disagree with the President’s foreign policy, but elections matter in a representative democracy, and President Trump was duly elected. Whether or not you agree with his politics, he has been elected to do a job: govern.
So let’s suppose—strictly for the sake of argument—that the President did withhold foreign aid to Ukraine in exchange for a commitment to investigate allegations of corruption. This is, quite literally, the exchange of one policy for another—horse-trading in every sense. Does the United States have no policy interest in making sure that the countries with which it interacts—and to which it sends aid money—do not engage in corrupt practices? Of course, it does. The case for “corruption” would require that President Trump withdraw aid in exchange for personal profit—not policy gains that are ultimately good for American foreign policy.
At its core, the case for impeachment is more than a sham: it’s a misinformation campaign in which Democrats and their media are willfully ignoring the way our policy process works to prevent our President from governing.
Tyler Durden
Fri, 11/01/2019 – 18:25 - How Iran Used Google To Disrupt 5% Of Global Oil Production
How Iran Used Google To Disrupt 5% Of Global Oil Production
Authored by Tsvetana Paraskova via OilPrice.com,
Officials at Saudi Aramco believe that Iran used satellite maps from Google Maps to precisely attack the oil facilities in Saudi Arabia in the middle of September, a U.S. Senator who visited the Kingdom after the attacks said, raising concerns that no energy infrastructure is safe.
Joe Manchin, Senator for West Virginia, visited Saudi Aramco facilities two weeks after the attacks. The U.S. Senator spoke to Aramco officials and shared part of his conversation during the North American Infrastructure Leadership Forum in Washington, as carried by the Washington Examiner.
On September 14, the Abqaiq facility and the Khurais oil field in Saudi Arabia were hit by attacks, which resulted in the temporary suspension of 5.7 million bpd of Saudi Arabia’s crude oil production, or around 5 percent of global daily oil supply.
U.S. President Donald Trump, Secretary of State Mike Pompeo, and Energy Secretary Rick Perry all blamed Iran for the attack. Saudi Arabia has also pointed the finger at Iran.
Senator Manchin was shown a video of the missile attacks in Saudi Arabia, he said at the forum.
The Senator asked a Saudi Aramco official whether the oil giant is concerned about someone working at the facility getting the information or the coordinates of possible strikes to hostile actors.
“He looked at me and said, ‘If we thought that was a problem, we would be, but basically it’s all Google, Google Maps.’ He said, ‘It’s so accurate,’” the Senator said, as carried by Washington Examiner.
The revelation that clear images on Google Maps can help terrorists target oil and gas facilities had Senator Manchin worried about the state of the U.S. energy infrastructure, especially natural gas pipelines.
An attack on a single natural gas pipeline in the United States could lead to mass blackouts, Neil Chatterjee, chairman of the Federal Energy Regulatory Commission (FERC), said last month, discussing America’s energy infrastructure in the aftermath of the attacks in Saudi Arabia.
Tyler Durden
Fri, 11/01/2019 – 17:45
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