Ghost Hunters

We pine for the things that might have been, 

the words that were never said, 

and the love that remains elusive.

Not bad.

 “Life can’t be all bad when for ten dollars you can buy all the Beethoven sonatas and listen to them for ten years."

                                                     -William F. Buckley Jr.,

A War Between Two Worlds

No easy way out 

By George Friedman

The murders of cartoonists who made fun of Islam and of Jews shopping for their Sabbath meals by Islamists in Paris last week have galvanized the world. A galvanized world is always dangerous. Galvanized people can do careless things. It is in the extreme and emotion-laden moments that distance and coolness are most required. I am tempted to howl in rage. It is not my place to do so. My job is to try to dissect the event, place it in context and try to understand what has happened and why. From that, after the rage cools, plans for action can be made. Rage has its place, but actions must be taken with discipline and thought.

I have found that in thinking about things geopolitically, I can cool my own rage and find, if not meaning, at least explanation for events such as these. As it happens, my new book will be published on Jan. 27. Titled Flashpoints: The Emerging Crisis in Europe, it is about the unfolding failure of the great European experiment, the European Union, and the resurgence of European nationalism. It discusses the re-emerging borderlands and flashpoints of Europe and raises the possibility that Europe's attempt to abolish conflict will fail. I mention this book because one chapter is on the Mediterranean borderland and the very old conflict between Islam and Christianity. Obviously this is a matter I have given some thought to, and I will draw on Flashpoints to begin making sense of the murderers and murdered, when I think of things in this way.

The Global Warming Check Is in the Mail

Of Papers and Meetings … 

by Pater Tenebrarum

"In climate research and modeling, we should recognize that we are dealing with a coupled non-linear chaotic system, and therefore that long- term prediction of future climate states is not possible"

The Inter-governmental Panel on Climate Change (IPCC), Third Assessment Report (2001), section 14.2.2.2, p. 774 

(emphasis added)

The above sentence went missing from subsequent IPCC reports. Apparently it was once part of the 'consensus' though. Even though it has disappeared, it nevertheless inadvertently blurted out the truth. A famous 'Climate-gate' e-mail dialog follows below: 

Dr. Phil Jones – CRU emails – 5th July, 2005:

“The scientific community would come down on me in no uncertain terms if I said the world had cooled from 1998. OK it has, but it is only 7 years of data and it isn’t statistically significant….”

 Dr. Phil Jones – CRU emails – 7th May, 2009:

“Bottom line: the ‘no upward trend’ has to continue for a total of 15 years before we get worried.”

 Dr Kevin Trenberth – CRU emails – 2009:

“The fact is we can’t account for the lack of global warming at the moment and it is a travesty we can’t.” 

Well, it has been more than 15 years of 'no warming' now. Time to get worried? You betcha. A new paper by the above mentioned Dr. Trenberth acknowledges the  importance of the so-called Pacific Decadal Oscillation in determining relatively short term warming and cooling cycles ('short term' meaning decades in this case). But the so-called 'skeptics' have pointed to this for a very long time. More about the paper can be found here. 

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The Pacific Decadal Oscillation. Keep in mind that in the mid 1970s, the 'scientific consensus' was worried about global cooling and an imminent new ice age – click to enlarge. 

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A recent article in 'Nature' discusses the 'case of the missing heat' and what progress is being made in explaining away the fact that none of the models predicting global warming by CO2 forcing can account for the observed reality. As a reminder, here is the difference between the model predictions and what has actually happened: 

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The predictions of Hansen's climate model presented to the US Congress in 1988, versus the reality (source: climatesense-norpag) – click to enlarge.

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However, instead of simply admitting that the models may be wrong, the heat is held to be 'hiding out' in the oceans. It is apparently widely hoped that it will return in time to save careers and grants. From Nature: 

“Now, as the global-warming hiatus enters its sixteenth year, scientists are at last making headway in the case of the missing heat. Some have pointed to the Sun, volcanoes and even pollution from China as potential culprits, but recent studies suggest that the oceans are key to explaining the anomaly. The latest suspect is the El Niño of 1997–98, which pumped prodigious quantities of heat out of the oceans and into the atmosphere — perhaps enough to tip the equatorial Pacific into a prolonged cold state that has suppressed global temperatures ever since.

“The 1997 to ’98 El Niño event was a trigger for the changes in the Pacific, and I think that’s very probably the beginning of the hiatus,” says Kevin Trenberth, a climate scientist at the National Center for Atmospheric Research (NCAR) in Boulder, Colorado. According to this theory, the tropical Pacific should snap out of its prolonged cold spell in the coming years.“Eventually,” Trenberth says, “it will switch back in the other direction.” 

Translation: 'please dear Lord, let it switch back as soon as possible' or: the warming check is in the mail. That is however perhaps less likely than thought (see further below why). If one looks at the chart of the PDO above, a common sense question immediately springs to mind: why was the warming trend prior to 1940 almost identical to that between 1976 and 1998, when obviously, CO2 emissions at the time cannot have been a major factor? This is not explained anywhere. Could it be that natural climate variability is actually the major factor in driving both warming and cooling phases and that CO2 emissions by humans are in fact a negligible input?

Interesting is also the following comment by another climate researcher cited in the Nature article: 

…none of the climate simulations carried out for the IPCC produced this particular hiatus at this particular time. That has led sceptics — and some scientists — to the controversial conclusion that the models might be overestimating the effect of greenhouse gases, and that future warming might not be as strong as is feared. Others say that this conclusion goes against the long-term temperature trends, as well as palaeoclimate data that are used to extend the temperature record far into the past. And many researchers caution against evaluating models on the basis of a relatively short-term blip in the climate. “If you are interested in global climate change, your main focus ought to be on timescales of 50 to 100 years,” says Susan Solomon, a climate scientist at the Massachusetts Institute of Technology in Cambridge.” 

(emphasis added)

Does that mean that if there is no warming for another century, their vaunted 'models' will still not be proved wrong? If that is so, then the science is guaranteed to only 'advance one funeral at a time' as the saying goes. By the way, the differentiation between 'skeptics' and 'scientists' is an insult to the many skeptics who are in fact scientists (and whose ranks are set to swell in our opinion).

Regarding the long term paleo-climate record, here is an instructive chart putting the 'catastrophic' global warming of the 20^th century into proper perspective (source of the chart is this extremely interesting article on the chance that warming will actually turn into cooling).

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Temperature anomaly vs. atmospheric CO2 over the past 11,000 years (data gathered by examination of ice cores)- click to enlarge.

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Several 'skeptics' are naturally pointing out that their work is suddenly 'integrated' into the 'consensus' with not a word being mentioned of the ridicule and opposition they had to endure for so long. For instance, here are Dr. Sebastian Lüning and Prof. Fritz Vahrenholt: 

“It took a while, but ocean cycles have finally been adopted by the IPCC as an important climate factor. With John Fasullo, Kevin Trenberth has written in a new paper appearing in the journal Earth’s Future that the warming pause taking place since 1998 indeed may have something to do with the Pacific Decadal Oscillation (PDO). Also even Trenberth’s pal Stefan Rahmstorf suddenly thinks it’s a good possibility [...]

-

In 2012 when we brought up the PDO as one of the triggers for the 1976-1998 warming in our “Die kalte Sonne” book and proposed ocean cycles as a sort of pulse generator for temperature cycles on a decadal scale, we were met with fierce resistance from the German climate science establishment. Now less than 2 years later, “Die kalte Sonne” finds itself as mainstream science.” 

They also mention an interesting comment made by Julia Slingo of the Met Office at a Royal Society meeting last year. She was playing 'devil's advocate' (the 'devil' being all those who say the climate models are crap, i.e., the 'deniers') and asked a well known alarmist a question he ultimately couldn't answer: 

“At a Royal Society meeting in 2013, Julia Slingo of the Met office played devil’s advocate and posed the following question to Prof. Jochen Marotzke of the German Max Planck Institute of Meteorology, see the 42:46 markroyalsociety.org/marotzke.mp3:

“…it’s a great presentation about 15 years being irrelevant,  but I think, some of us might say if you look at the Pacific Decadal Oscillation and it’s timescale that it appears to work, it could be 30 years, and therefore I think, you know, we are still not out of the woods yet on this one. … If you do think it’s internal variability, and you say we do think the Pacific Decadal Oscillation is a key component of this, and it’s now in it’s particular phase, but was previously in the opposite phase, could you not therefore explain the accelerated warming of the 80s and 90s as being driven by the other phase of natural variability?”

Simplifying Slingo’s  incoherence: “If the current cooling is due to the negative PDO phase, then wouldn’t the warming of the 80s and 90s be a result of the positive PDO phase back then?”

Marotzke answers after much incoherence of his own:

“Um…I guess I’m not sure.”

These people make no sense at all. They are sure it’s the oceans’ cold phase gobbling up heat when temperatures fail to rise. But when temperatures increase, they just can’t be sure that the oceans are involved at all, and insist they would not bet much money on it. Of course it just can’t work only one way. Marotzke is delivering only what would call unadulterated absurd science.” 

(emphasis added to Ms. Slingo's query)

What does 'we're not out of the woods' really mean? That they are scared they have exaggerated and are, as one commentator at Anthony Watts' site remarked 'in need of an exit strategy'? 

The Problem of Modeling the Future of a Complex System

The big problem is that the climate models that are at the root of the 'catastrophic anthropogenic global warming' forecasts are trying to do something that is literally impossible. Below is a video of a presentation by Christopher Essex,  Professor and Associate Chair in the Department of Applied Mathematics at the University of Western Ontario and former director of its Theoretical Physics program. Now, one thing we can expect Professor Essex to know a thing or two about are the mathematics behind the modeling, and this is what the presentation focuses on. It is done in a way that makes it possible even for a layperson to easily discern what the problems of these models are, and that in fact, these problems are insurmountable, at least at present.

As an aside, Professor Essex is of course both a 'skeptic' and a scientist, and he is far from alone. For instance, we would like to point readers to a 2009 paper he  co-authored with eight other scholars (and which has been reviewed by 50 others) entitled 'Critical Topics in Global Warming'. The introduction tells us a little bit about the so-called 'consensus':

“The issue of global warming is the subject of two parallel debates: one scientific, focused on the analyses of complex and conflicting data; the other political, addressing what is the proper response of government to a hypothetical risk. Proponents of an immediate and sweeping regulatory response insist that the scientific debate has long been settled. But a fair reading of the science, as presented in the Fraser Institute's Independent Summary for Policymakers (ISPM), proves otherwise. The supplements to that report go deeper into some of the key topics and provide even more evidence that popularized notions about the causes and consequences of global warming are more fiction than fact.”

When looking at the presentation below, it becomes crystal clear why the science, especially with regard to climate models, simply cannot be regarded as 'settled':

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“Believing 6 Impossible Things Before Breakfast and Climate Modeling”, by Christopher Essex 

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 The 'Quiet Sun'

Now a few remarks on why the 'missing heat' may well go on missing for a good while yet. Below is an excerpt from arecent article published by the BCC regarding the activity of the sun, which has declined to its lowest in at least a century. Scientists are baffled by this behavior – something highly unusual is evidently happening: 

“I've been a solar physicist for 30 years, and I've never seen anything quite like this," says Richard Harrison, head of space physics at the Rutherford Appleton Laboratory in Oxfordshire. He shows me recent footage captured by spacecraft that have their sights trained on our star. The Sun is revealed in exquisite detail, but its face is strangely featureless. "If you want to go back to see when the Sun was this inactive… you've got to go back about 100 years," he says.

This solar lull is baffling scientists, because right now the Sun should be awash with activity. It has reached its solar maximum, the point in its 11-year cycle where activity is at a peak. This giant ball of plasma should be peppered with sunspots, exploding with flares and spewing out huge clouds of charged particles into space in the form of coronal mass ejections.

But apart from the odd event, like some recent solar flares, it has been very quiet. And this damp squib of a maximum follows a solar minimum – the period when the Sun's activity troughs – that was longer and lower than scientists expected.

"It's completely taken me and many other solar scientists by surprise," says Dr Lucie Green, from University College London's Mullard Space Science Laboratory. The drop off in activity is happening surprisingly quickly, and scientists are now watching closely to see if it will continue to plummet.

"It could mean a very, very inactive star, it would feel like the Sun is asleep… a very dormant ball of gas at the centre of our Solar System," explains Dr Green.

This, though, would certainly not be the first time this has happened.  During the latter half of the 17th Century, the Sun went through an extremely quiet phase – a period called the Maunder Minimum. Historical records reveal that sunspots virtually disappeared during this time.

Dr Green says: "There is a very strong hint that the Sun is acting in the same way now as it did in the run-up to the Maunder Minimum." Mike Lockwood, professor of space environment physics, from the University of Reading, thinks there is a significant chance that the Sun could become increasingly quiet.

An analysis of ice-cores, which hold a long-term record of solar activity, suggests the decline in activity is the fastest that has been seen in 10,000 years. "It's an unusually rapid decline," explains Prof Lockwood. "We estimate that within about 40 years or so there is a 10% to 20% – nearer 20% – probability that we'll be back in Maunder Minimum conditions."

The era of solar inactivity in the 17th Century coincided with a period of bitterly cold winters in Europe. Londoners enjoyed frost fairs on the Thames after it froze over, snow cover across the continent increased, the Baltic Sea iced over – the conditions were so harsh, some describe it as a mini-Ice Age. 

(emphasis added)

The article naturally goes on to point out that according to the IPCC, the effect of CO2 emissions tops every other influence on the climate (no wonder, as CO2 emissions can be taxed. Try taxing the sun!), although the odd men out who think the sun is far more important are mentioned in passing. But not to worry! At worst we will miss the 'polar lights' henceforth. Somehow this doesn't feel very reassuring – after all, if the Maunder minimum was irrelevant to the climate, then why was there a 'little ice age'?

Admittedly, it remains an open question how important the sun's activity is to the climate – after all, if a complex system like the earth's climate cannot be successfully modeled, this holds for the past as well as for the future. It is not possible to state apodictically that the Maunder minimum 'produced' the little ice age. Intuitively though, we tend to think that the sun is indeed an important factor. On a geological time scale, the last major ice age happened only a very short time ago, and we know that there have been vast variations in average temperatures over large time scales. In fact, it is only because we live in a  warming cycle on these large time scales (an 'inter-glacial period') that human civilization as we know it exists at all. Try to imagine feeding more than 7 billion people with the planet a full 8 to 10 degrees Celsius colder and with a large part of its landmass covered in ice.

Of course that is certainly not an imminent problem, but looking at the regularity with which glacial and inter-glacial periods occur, it seems obvious that it will become a problem one day. We happen to think that even a 'mini ice age' could be quite a nuisance. It would definitely make life a lot more uncomfortable in the Northern hemisphere. Currently there is no certainty what precisely the main cause of ice ages is, but cycles related to the sun (specifically the Milankovitch cycles, which describe changes in earth's orbit around the sun) are undoubtedly playing a role.

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Temperatures plus CO2 and dust concentration in the atmosphere over the past 400,000 odd years via the Vostok ice core data (and yes, CO2 tends to follow temperature, it doesn't lead; presumably there are feedback loops at work though, with higher CO2 concentration and temperature reinforcing each other during the up and downswings)- click to enlarge.

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What is slightly worrisome about the above chart is that the very cold periods tend to have a much longer duration than the warm periods, which seem to have a tendency to produce short-lived spike highs. In fact, the behavior of the long term temperature chart looks very similar to the price charts of a number of commodities. 

Conclusion:

The backtracking has begun – as a first step, 'climate skeptics' see their work suddenly integrated into the mainstream. However, we are not yet at the point where the models are rejected or the greenhouse gas-centric AGW theory is truly abandoned. Instead we're now in the 'how can we keep saying we are right while we're obviously wrong' phase. A lot is at stake after all: scientific reputations, but most importantly, a lot of money.

Policymakers don't want to hear that there is no problem, because that would close off a major source of tax revenues as well as what is currently a major avenue for crony capitalism and pork barrel spending through the subsidization of uneconomic 'green energy' schemes. Entire vast bureaucracies depend on AGW as well, and there is no alternative promotion in sight yet that could replace this sheer inexhaustible and vast fount of tax payer funded non-activity. So now the hope is that the heat is 'hiding out' deep in the oceans and ready to return at the drop of a hat (or rather, a turn of the trade winds). That may however not happen. What then?

Ariel Sharon and the death of the Israeli Dream

Sharon's shift from ‘hawk’ to negotiator told a bigger story about Israel

By DANIEL BEN-AMI

Despite the bitter differences between the admirers and critics of Ariel Sharon, the former Israeli prime minister who died on Saturday, most share one outlook in common. They claim to have divined a continuity in his career despite his apparent shift from ultra-nationalist hawk to architect of Israel’s unilateral disengagement from Gaza.

It is understandable that both sides should fall for this temptation, since it provides the easiest way to make sense of Sharon’s contradictions. Either he was a pragmatic Zionist who would do whatever was necessary to protect the embattled Jewish state. Or alternatively he was a ruthless butcher of the Palestinians whose latter-day talk of peace was merely a cynical cover for greater repression.

Both sides fail to grasp the fundamental shift that has taken place in Israeli society since the 1970s. Until that decade, the vast majority of Israelis were united behind the project of building a Jewish state within Eretz Yisrael (the historic Land of Israel that includes the present-day West Bank). This goal was generally seen as a necessary response to the scourge of anti-Semitism rather than being viewed as a religious mission. Indeed, most of the original founders of Israel considered themselves socialists. The earlier settlements, including those in the West Bank and Gaza, were founded under the auspices of early leftist Israeli governments.

Since the 1970s, however, support for this classical conception of Zionism has steadily eroded. Many Israelis have become unsure about what their country stands for. The pioneering ardour has gone, and controlling land occupied by large numbers of Palestinians is seen as problematic at least. The one important exception to this disaffection is the mainstream religious community, the backbone of the settler movement, which retains its own particular conception of Zionism.

Sharon in many ways personified the shifts within Israel itself. Indeed, in some respects he was behind the times since he was an ardent supporter of settlement for longer than many in the Israeli elite. He only retreated from the goal of settlement expansion in his final years in office.

Read more at:

http://www.spiked-online.com/newsite/article/ariel_sharon_and_the_death_of_the_israeli_dream/14517#.UtcuytLg98E 

The tide is rising for America’s libertarians

The new spirit in a rising climate of anti-politics has become an attitude, rather than a movement

By Edward Luce

Robert Nozick, the late US libertarian, smoked pot while he was writing Anarchy, State and Utopia. He would applaud the growth of libertarianism among today’s young Americans. Whether it is their enthusiasm for legalised marijuana and gay marriage – both spreading across the US at remarkable speed – or their scepticism of government, US millennials no longer follow President Barack Obama’s cue. Most of America’s youth revile the Tea Party, particularly its south-dominated nativist core. But they are not big-government activists either. If there is a new spirit in America’s rising climate of anti-politics, it is libertarian.

On the face of it this ought to pose a bigger challenge to the Republican party – at least for its social conservative wing. Mr Obama may have disappointed America’s young, particularly the millions of graduates who have failed to find good jobs during his presidency. But he is no dinosaur. In contrast, Republicans such as Rick Santorum, the former presidential hopeful, who once likened gay sex to “man on dog”, elicit pure derision. Even moderate Republicans, such as Chris Christie, who until last week was the early frontrunner for the party’s 2016 nomination, are considered irrelevant. Whether Mr Christie was telling the truth last week, when he denied knowledge of his staff’s role in orchestrating a punitive local traffic jam, is beside the point. Mr Christie’s Sopranos brand of New Jersey politics is not tailored to the Apple generation.

The opposite is true of Rand Paul, the Kentucky senator, whose chances of taking the 2016 prize rose with Mr Christie’s dented fortunes last week. Unlike Ron Paul, the senator’s father, who still managed to garner a large slice of the youth vote in 2008, Rand Paul eschews the more outlandish fringes of libertarian thought. Rather than promising an isolationist US withdrawal from the world, he touts a more moderate “non-interventionism”. Instead of pledging to end fiat money, he promises to audit the US Federal Reserve – “mend the Fed”, rather than “end the Fed”. Both find echo among the Y generation. So too does his alarmism about the US national debt. Far from being big spenders, millennials are more concerned about US debt than other generations, according to polls. They are also strongly in favour of free trade. More than a third of the Republican party now identifies as libertarian, according to the Cato Institute. Just under a quarter of Americans do so too, says Gallup.

All of which looks ominous for Ted Cruz, the Texan Republican whose lengthy filibuster against Obamacare last year lit the fuse for the US government shutdown. Mr Cruz, also a 2016 aspirant, leads the pugilistic wing of the Republican party that is prepared to burn the house down in order to save the ranch. Although also a Tea Partier, Mr Paul is cultivating a sunnier Reaganesque optimism that draws on the deep roots of US libertarianism. His brand of politics also strikes a chord with those who fear the growth of the US surveillance state – the types who view Edward Snowden (another millennial) as a hero rather than a traitor. Last year the US House of Representatives came within 12 votes of passing a bill to defund the National Security Agency. Mr Paul led the bill in the Senate. Next time they could succeed.

Read more at:

http://www.ft.com/intl/cms/s/0/cc9a31b8-7928-11e3-b381-00144feabdc0.html#axzz2qVU5fyvi

How Did The Democrats Become The Party Of The Rich?

The dog that isn’t barking in the current liberal crusade against economic inequality

By Stephen Hayward

If you brought back either of the Roosevelts—Teddy or Franklin—from the grave, the most astonishing thing they would find is that the “malefactors of great wealth” have become the benefactors of today’s liberalism, and Democrats have become the party of the rich. In the economic crisis of the 1930s, the rich hated FDR. Most of today’s rich love Barack Obama—so much so that Washington D.C. area airports ran out of space to handle all of the private jets flying in the well-heeled for both of his inaugurals. Forget the “limousine liberals” of the 1960s and 1970s, sending their own kids to private schools while advocating forced busing for everyone else; behold today’s burgeoning class of “Gulfstream liberals,” who jet about the globe while fretting about global warming.

What accounts for this astonishing state of affairs, and what does it mean for our politics in this age of supposed concern over economic inequality?

To be sure, labor unions (along with trial lawyers) still provide the majority of the Democratic Party’s campaign funds and organizational muscle on election day, but it is the super rich of Silicon Valley and Wall Street, combined with the super rich of Hollywood, who command the priority attention of Democratic Party leaders these days. Of the ten richest zip codes in the U.S. eight gave more money to Democrats than Republicans in the last two presidential cycles. President Obama doesn’t go to union halls to host fundraisers; he goes to posh Wall Street townhomes, the Hollywood hills, or to Tom Steyer’s house in Pacific Heights. Steyer, a billionaire investor and wannabeGeorge Soros, is the perfect model of today’s rich liberal, and shows where the balance of power on the Left rests today. Organized labor wants the Keystone pipeline built; Steyer, who imbibes deeply the green Kool Aid, is adamantly against Keystone. Note who Obama is siding with.

Yes, but haven’t many of the leading plutocrats, such as Warren Buffett and Bill Gates, embraced higher income taxes? Yes, they have, but one important fact has escaped notice: higher income tax rates will not touch the bulk of the fortunes of today’s plutocrats, for the simple reason that the great bulk of the accumulated wealth of Gates, Buffett, Silicon Valley and Wall Street consists of appreciated asset values—not ordinary income. Few seem to be aware that most of this wealth has never been taxed, and in the case of Buffett and Gates, who are taking advantage of the charitable foundation laws, will never be taxed. Even a return to Paul Krugman’s nirvana of 90 percent marginal income tax rates of the 1950s would do little to reduce the wealth gap in the nation.

At a time when the Democratic Party is moving leftward, away from Bill Clinton’s relatively centrist economic outlook, what explains the growth in the ranks of super-rich liberals? (Or, to flip the Thomas Frank title, what’s the matter with Connecticut?) It is worth noting that many of today’s leading liberal super-rich are not heirs of fortunes, like Stewart Mott and various Rockefellers of previous decades, whose liberalism could be attributed to personal guilt over unearned wealth. Most of today’s super rich liberals are financiers and entrepreneurs, like Google founders Larry Page and Sergei Brin. Liberal guilt is not entirely absent from the mindset of the new rich, as can be seen especially in the mindless mantra that the rich have an obligation to “give back,” as though they “took” something in creating wealth by serving the marketplace with dazzling innovations like computer software and internet marketplaces.

There are several parts to this story, but perhaps the most significant is the presumption of the new rich today that they’re simply smarter (look at how fast I got rich?, they think), and today’s elitist, technocratic liberalism appeals to their superficial intellectual vanity. As a one-time critic of the new super rich once put it, “they found it hard to imagine that there might be any social ill that could not be cured with a high SAT score.” (That critic was Barack Obama, in The Audacity of Hope.)

The dependence—if not slavishness—of Democrats on the new super rich is best revealed by the dog that isn’t barking in the current liberal crusade against economic inequality: where is the call for a straight up wealth tax? Where is today’s Huey Long, who in 1935 proposed that no one should be allowed to keep any wealth beyond $50 million—or perhaps, he suggested, only $10 million. Whatever the figure, Long said, “it will still be more than any one man, or any one man and his children and their children, will be able to spend in their lifetimes; and it is not necessary or reasonable to have wealth piled up beyond that point where we cannot prevent poverty among the masses.”

Read more at:

http://www.forbes.com/sites/stevenhayward/2014/01/08/how-did-the-democrats-become-the-party-of-the-rich/

Iraq: Deeper in Trouble or Eerie Result of US 2003 «Cakewalk»

The year 2013 has distinctively been a blessing for Islamist parties and fundamentalist Islamic governments throughout the Middle East

By Andrei AKULOV

Instability in Iraq has grown steadily over the recent months. The Iraqi government has lost control of the strategic city of Fallujah, west of Baghdad. For the first time since the American troops' withdrawal in 2011, fighters from a group affiliated with Al Qaeda and Sunni tribesmen have seized parts of the two biggest cities in Anbar province bordering Syria.

The fighting erupted after troops broke up a protest camp by Sunni Arabs in the city of Ramadi. They were protesting marginalizing the Sunnis by the Shia-led government. When Prime Minister Maliki dispatched the Iraqi army to quell a protest in Ramadi over a week ago, local tribes fought back. Maliki ordered the troops to withdraw. As a result Islamic militants appeared in Ramadi, Fallujah and Tarmiya triggering combat actions across the whole Anbar province. The Islamic State of Iraq and the Levant (ISIL) asserted control over the western Iraqi city of Fallujah on January 3 declaring an Islamic state there. They had received a boost from some local Sunni tribesmen, who had joined them to fight the forces of Iraq's Shiite-led government, while others turned against the jihadists. Local tribes, Iraqi security forces and al-Qaeda-affiliated militants fought one another for days in a kind of free-for-all messy three-way fray. Hundreds of Fallujah residents have fled. The Prime Minister reversed his decision sending army units back to Anbar. Now the Iraqi army is bracing up for a real tough fight ahead. In case of failure the whole country will be threatened with Syria-like scenario.

Root of problem

The current violence is rooted in the sectarian disputes left unresolved when U.S. troops withdrew and inflamed by the escalating conflict in neighboring Syria. Many Iraqi Sunnis claim they are being marginalized by Mr. Maliki's Shia-led government. Mr. Maliki's drive to restore control is being seen by many Sunnis as an attempt at domination and oppression, and it is taking Iraq back to the brink of a sectarian civil war. In recent months Sunni militants have stepped up attacks across the country, while Shia groups retaliated with deadly reprisals bringing the situation to the brink of full-scale sectarian conflict. On January 1 the United Nations said at least 7,818 civilians and 1,050 members of the security forces had been killed in in 2013. Islamist militants benefit from these deep-seated grievances. The upheaval testifies to the soaring capabilities of the Islamic State of Iraq and Levant (ISIL), the rebranded version of the al-Qaeda which has expanded into Syria while escalating its activities in Iraq. In the past year al-Qaeda has bounced back there killing more than 8,000 people in 2013, according to the United Nations. ISIL has become one of the main components of the so-called «rebels» fighting in the Western-backed war for regime-change in neighboring Syria. Having seized control of territory in northern Syria, it has proven capable of moving forces back and forth across the Syrian-Iraqi border to stage car bombings, assaults on military and police units, and sectarian attacks. Its stated aim is the establishment of a Sunni Muslim caliphate spanning both countries. A backdrop of near continuous urban bombings against Shi’a and government targets continues in northern Iraq and Baghdad. ISIL hopes to link its holdings in Eastern Syria with corresponding areas of control in Iraq’s majority Sunni Arab northwest. In September it bombed four key bridges linking important Iraqi border towns with urban centers closer to Baghdad. In late November, ISIL fighters paraded through a main square of Ramadi to rally support. The recent capture of positions in Ramadi and large parts of Fallujah was the first time in years that Sunni insurgents had taken ground in the province's major cities and held their positions for days.

Read more at:

http://www.strategic-culture.org/news/2014/01/10/iraq-deeper-in-trouble-or-eerie-result-of-us-2003-cakewalk.html

"Bubbles Always Pop"

An Austrian Wolf In Keynesian Sheep's Clothing

by Guy Haselmann

The world has been kept on life support mostly by government spending of trillions of dollars  and central bank printing of trillions more. Both have boosted asset prices and given the allure of economic progress. Over-zealous regulators, market rule changes, and aggressive policy stimulus have temporarily stabilized markets. Market vigilantes have been hibernating, because unclear investment rules and uncertainties around the ultimate magnitude of stimulus have prevented them from attacking bad policies or distorting asset price valuations.

It is difficult to know the extent that markets and the global economy have benefited from official policy stimulus; however, five years after the crash, economic growth and the labor recovery remain subpar. Strong growth should have been ignited by now.

Most economists still believe in the ‘official position’ that growth is edging sustainably higher and that interest rates will slowly rise to reflect it. They could be correct, but should it fail to unfold as expected, confidence in the efficacy of official policy will diminish and the social contract will break down further. Since markets require confidence, they will also react accordingly.

Some argue that economic benefits to stimulus have run its course, while the costs from looming unintended consequences have not yet been unleashed. Many believe (and I am one) that the risks and costs of current Fed policy outweigh the benefits.

Most economists still believe in the ‘official position’ that growth is edging sustainably higher and that interest rates will slowly rise to reflect it. They could be correct, but should it fail to unfold as expected, confidence in the efficacy of official policy will diminish and the social contract will break down further. Since markets require confidence, they will also react accordingly.

Some argue that economic benefits to stimulus have run its course, while the costs from looming unintended consequences have not yet been unleashed. Many believe (and I am one) that the risks and costs of current Fed policy outweigh the benefits.

* * *

The Fed’s asset purchase program (QE) and Zero Interest Rate Policy (ZIRP) are the foremost factors that have widened wealth inequalities. The richest few have benefited the most, simply because the 10% richest Americans own 80% of US stocks. The FOMC believe that its asset-price-inflation-trickle-down-policy leads to spending which ultimately leads to job creation, especially for the poor.

However, several FOMC members themselves have questioned Fed policies, citing that they have not worked as well as had been hoped, and pointing out that aggregate demand has been weak throughout the recovery. To his credit Fed Governor Jeremy Stein broached the subject of unintended consequences of Fed policies when he mentioned in his February paper, “A prolonged period of low interest rates, of the sort we are experiencing today, can create incentives for agents to take on greater duration or credit risk, or to employ additional financial leverage in an effort to ‘reach for yield’”.

Zero interest rates have incentivized corporations to issue debt in order to capitalize on the historically low interest rates; however, corporations have primarily used the money to pay greater dividends, buyback shares, or modernize plant and equipment. There is a strong case to be made that holding interest rates at zero for a prolonged period is actually counter-productive to the Fed’s efforts to achieve either of its dual mandates. This is because increasing productivity through modernization typically exposes redundancies: it allows firms to lay-off workers, while the improvement in competitiveness allows firms to drop prices.

Furthermore, and as I referenced in my 2013 paper, “Should the marginal propensity to consume of creditors exceed that of debtors, the net effect of redistribution could be to lower household spending rather than raise it. There are some conservative savers who have a predetermined goal in mind for the minimum amount of savings they wish to accumulate over time. Those investors may refuse to move out the risk curve in search of higher yields (likely widening the wealth divide). To them, lower interest rates simply mean a slower rate of accumulation, which likely will jeopardize their minimum goal. The only recourse for this investor is to save more, which is the exact opposite intention of the Fed’s policy. For example, if interest rates fall from 4% to
3%, an investor would have to increase savings by more than 20% each year to reach the same goal over 30 years.”

Another negative result of ZIRP is that banks and other lenders are discouraged from lending due to puny return levels; and, therefore, the Fed’s desire to expand lending is compromised. Are lower (or negative) interest rates supposed to increase the incentive to lend money? To assume such is absurd. Although somewhat counter-intuitive, if interest rates rose, then the supply of money willing to be lent would increase due to wider interest margins.

Policies are so unprecedented and unproven that it is possible that the Fed itself has now become a source of financial instability. This could be the case either through the potential fueling of asset bubbles, through its compromised ability to conduct future monetary policy (due to it  unwieldy $4 trillion balance sheet), or due to “unknown unknowns.”

* * *

In a low to zero interest rate policy (ZIRP) environment, investors desperately search for yield. This frequently chases investors into assets to which they are ill-suited and to which they will miscalculate liquidity and downside potential. Under ZIRP paradigms, riskier assets become the best-performing. Credit spreads collapse and equities soar.

Massive monetary ‘printing’ by global central banks has not just emboldened investors, but these actions have collectively changed their behavior and psychology. There is evidence that policies have led to mis-allocation of resources. Investors are emboldened to take what many critics believe is inappropriate or reckless levels of risk. The motto, “Don’t fight the Fed” has taken on added meaning. Moral hazard and a deep-seated bullish psychology have become rampant.

Extended Fed promises of lower rates and a continuation of asset purchases even as the economy heals, are conspiring to propel prices ever-upward. Investing today has become mostly about seeking relative yield, rather than assessing value or determining if the investment’s return is sufficient compensation for the risk.

Simply stated, investors and speculators receive ever-lower returns for ever-higher levels of risks. Over time, the ability of an investor to assess an asset’s fundamental value becomes ever-increasingly impaired. It should a warning sign to portfolio manager’s fiduciary responsibility to maximize return per unit of risk (see market liquidity section).

There have been persistent cycles of asset booms (bubbles) that eventually turned to ‘busts’. Very low or negative real rates (seen recently) always create economic distortions and the mispricing of risk, thereby creating asset bubbles. Each ‘boom’ had some differences, but the common factor has always been easy money which the Fed was too slow to withdraw. Providing liquidity is always easier than taking it away, which is one reason why the Fed has hit the “Zero Lower Bound” in the first place.

Eventually (un-manipulated) asset prices always return to their fundamental value, which is why bubbles always pop. The FOMC has backed itself into a corner. Current changes in policy are being designed around efforts to manage the unwind process seamlessly. Central bank (and government official’s) micro-management appears based on a belief that they can exert an all-encompassing central control over markets and peoples’ lives. Those in power have come to believe that policies have a precise effect that can be defined and managed. This is highly unlikely.

In ‘normal’ times there is a more discernable connection between cause and effect. However, the usual relationships particularly break down during periods of over-indebtedness, unprecedented regulatory changes, and official rates reaching the zero lower bound. Today, the world is far from ‘normal’. It is not difficult to imagine the looming fallout from policies that have promoted asset price inflation, and which have materially compromised market liquidity.

Read more at:

http://www.zerohedge.com/news/2014-01-07/austrian-wolf-keynesian-sheeps-clothing

Pimping the Empire, Conservative-Style

"Conservatives" and "Progressives" alike are pimping for the Empire when they support the Central State's essentially unlimited powers

By CHARLES HUGH SMITH

(I say "so-called" because the "Progressives" are not actually progressive, and the "Conservatives" are not actually conservative. Those labels are Orwellian double-speak, designed to mask the disastrous consequences of each ideology's actual policies.)

Let's begin by stipulating that ideology, any ideology, is an intellectual and emotional shortcut that offers believers ready-made explanations, goals, narratives and enemies without any difficult, time-consuming analysis, study or skeptical inquiry. This is the ultimate appeal of ideology: accepting the ideology relieves the believer of the burdens of analysis, skeptical inquiry, uncertainty/doubt and responsibility: all the answers, goals and narratives are prepackaged and mashed together for easy consumption.

This is one of the core messages of Erich Fromm's classic exploration of ideology and authoritarianism, Escape from Freedom.

And what is the essential foundation of authoritarianism? A central state. This is not coincidental.

What few grasp is the teleology of the centralized state: by its very nature (i.e. as a consequence of its essentially unlimited powers), the central state is genetically programmed to become an authoritarian state devoted to self-preservation and the extension of its reach and power.

This is why the Founding Fathers were so intent on limiting the powers of the Central State. They understood the teleology of the centralized state: by its very nature (i.e. as a consequence of its essentially unlimited powers), the central state is genetically programmed to become an authoritarian state devoted to self-preservation and the extension of its reach and power.

You can't cede unlimited, highly concentrated powers to the central state and then expect the state not to fulfill its teleological imperative to protect and extend its powers. The state with unlimited powers will be ontologically predisposed to view any citizen that seeks to limit its expansion of power as an enemy to be suppressed, imprisoned or marginalized.

The state with unlimited powers will be ontologically predisposed to protecting its powers by cloaking all the important inner workings of the state behind a veil of secrecy, and pursuing and punishing any whistleblowers who reveal the corrupt, self-serving workings of the state.

The state with unlimited powers will be ontologically predisposed to view any other nation or alliance as a potential threat, and thus the state will pursue any and all means to disrupt or counter those potential threats.

The state with unlimited powers will be ontologically predisposed to create and distribute propaganda to mask its self-serving nature and its perpetual agenda of extending its powers, lest some threat arise that limits those powers.

Democracy and a central state with unlimited powers are teleologically incompatible.

Though they piously claim to desire a limited State, conservatives cede it essentially unlimited powers because they want that state to be powerful enough to impose their agenda on others and reward their constituencies.

Conservatives are masters at projecting a preachy devotion to a limited state, democracy, liberty and free enterprise while their support of the Central State undermines every one of these values. Conservatives are like the preacher who issues stern sermons on righteousness every Sunday while skimming big money from pimping sordid, destructive policies Monday through Saturday.

Conservatives claim to want to limit the Central State, but their slavish support of Medicare, Social Security, the Pentagon, the National Security State, the Federal Reserve (and thus interest on the national debt), farm subsidies to Big Ag, law enforcement and the War on Drugs Gulag means they support virtually 100% of the Central State's unlimited powers. Their proposed "cuts" are farcically tiny slices designed for propaganda purposes--out of $4 trillion Federal budget, conservatives preach "austerity" while leaving the Empire and their crony-capitalist cartels entirely intact.

Conservatives claim devotion to national defense while actually having no interest in actual defense. Their sole interest is supporting their favored cartels and projecting a politically useful facade of being pro-national defense. In the real world, they support the revolving door between the Pentagon and defense contractors and profitable but ineffective weapons systems. Conservatives happily shove weapons systems down the nation's throat the Pentagon doesn't even want, all the while masking their crony-capitalist agenda behind pious claims of supporting the military.

That is particularly Orwellian: ignore the military's true needs in favor of funneling profits to your crony-capitalist pals. The same Orwellian agenda powers conservative support of the banking sector (conservatives never met a banking subsidy they didn't love), Big Ag, Big Pharma, Big Everything--conservatives will support any Big Business at the expense of the taxpayers and the national commons.

The one essential tool conservatives need to force their crony-capitalism on the citizenry is an powerful Central State--and so they support the essentially unlimited powers of the Central State with gusto, even as they bleat piously about the Founding Fathers.

The Founding Fathers had two primary concerns: foreign entanglements and the dangers of an unlimited Central State. So-called Conservatives are blind to the gap between the reality of their support of a Global Empire and an all-powerful Central State and the fantasy that they even understand the Founding Fathers' concerns, much less actively pursue them.

Conservatives are against Big Government except when Big Government benefits their constituencies. Boost the Pentagon budget by 10% a year, rain or shine, to counter every possible threat to the Empire, boost the National Security State (Homeland Security, NSA, etc.) every year, boost the War on Drugs Gulag annually, leave Medicare, Social Security and interest on the national debt as sacrosanct, and guess what--you've created a self-liquidating monster State.

Behind their preachy facade, conservatives have turned democracy into an auction of political favors. As they belly up to the limitless trough of central State revenues and power, conservatives have embraced the auction as the true mechanism of governance: banking statutes are written by banking lobbyists and then signed into law.

What is the difference between a so-called Progressive who tells us Congress has to pass a crony-capitalist healthcare law to find out what's in it and a so-called Conservative who pushes a banking law penned by lobbyists? There is none: both are pimps.

Read more at:

http://charleshughsmith.blogspot.gr/2014/01/pimping-empire-conservative-style.html