Self-Interest and the Pathology of Power

Social Fractals and the Corruption of America

Social fractals and social control myths help explain the complete corruption of America.

By Charles Hugh Smith

Part I

Kathy K. recently elucidated a powerful concept: social fractals. We typically think of fractals--structures that are scale-invariant--as features of Nature or finance. For example, a coastline has the same characteristically ragged appearance from 100 feet, 1,000 feet and 10,000 feet in altitude. It is scale-invariant, i.e. its characteristics remain constant whether it is viewed on a small, medium or large scale.

The windmills of our collective minds

Dutch Pull the Plug on Offshore Wind Subsidies

By D. BRADY NELSON

The nation known for its iconic windmills is throwing in the towel on offshore wind power, as Dutch officials have determined the Netherlands can no longer afford large-scale subsidies for expensive wind turbines that cannot produce electricity at economically competitive prices.

The decision is a powerful blow against renewable power advocates who have long asserted Holland proves renewable power can be practical and economical.

Offshore Wind ‘Very Uncompetitive’

“Offshore wind remains a very uncompetitive option,” Dutch Minister of Economic Affairs Maxime Verhagen told Wind Directions: The European Wind Industry Magazine.

In the meantime, the debasement of paper money continues.

There will be no end to ‘quantitative easing’

Money

by DETLEV SCHLICHTER

The Bank of England is expected today to announce another round of debt monetization, called ‘quantitative easing’. A majority of economists polled by Dow Jones Newswire earlier this week expect the central bank’s policy committee to agree “to £50 billion ($79 billion) of additional bond purchases using freshly created money to underpin demand and ensure its 2% inflation target is met. Some expect it to go for £75 billion.”

Deadly Games

Energy policy based on renewables will win hearts but won't protect their owners from frostbite and death due to exposure

By Kevin Myers

Russia's main gas-company, Gazprom, was unable to meet demand last weekend as blizzards swept across Europe, and over three hundred people died. Did anyone even think of deploying our wind turbines to make good the energy shortfall from Russia?

Of course not. We all know that windmills are a self-indulgent and sanctimonious luxury whose purpose is to make us feel good. Had Europe genuinely depended on green energy on Friday, by Sunday thousands would be dead from frostbite and exposure, and the EU would have suffered an economic body blow to match that of Japan's tsunami a year ago. No electricity means no water, no trams, no trains, no airports, no traffic lights, no phone systems, no sewerage, no factories, no service stations, no office lifts, no central heating and even no hospitals, once their generators run out of fuel.

Alas. Politicians are also Human. Really.

How Kennedy bought 1,200 hand rolled Cuban cigars just hours before he ordered blockade of communist state 50 years ago
By LEE MORAN

President John F Kennedy ordered an aide to buy him as many Cuban cigars as he could just hours before he authorised the U.S. trade embargo - which subsequently made them illegal.

Kennedy asked his head of press and fellow cigar smoker Pierre Salinger to obtain '1,000 Petit Upmanns' on February 6, 1962, so he could have them in his hands before they were deemed contraband.

Then, seconds after he was told the next morning that 1,200 of Cuba's finest export had been bought for him, he signed the decree to ban all of the communist state's products from the U.S.

Read more:http://www.dailymail.co.uk/news/article-2098064/John-F-Kennedy-bought-1-200-Cuban-cigars-hours-ordered-US-trade-embargo.html#ixzz1lu1jnctG

Trade and Prosperity

The quest for African Trade Liberalization

by Marian L. Tupy

A wonderful short video explaining the benefits of trade liberalization among African countries:

Why Jews Don’t Farm

Literacy and Farming

by Steve Landsbur

In the 1890s, my Eastern European Jewish ancestors emigrated to an American Jewish farming community in Woodbine, N.J., where the millionaire philanthropist Baron de Hirsch provided land, tools, and training at one of the nation’s first agricultural colleges. But within a generation, the family had settled in Philadelphia where they became accountants, tailors, merchants, and eventually, lawyers and college professors.

De Hirsch had a vision of American Jews achieving economic liberation by working the land. If he’d had a better sense of history, he would have built not an agricultural college but a medical school, because for well over a millennium prior to the settlement of Woodbine, Jews had not been farmers—not in Palestine, not in the Muslim empire, not in Western Europe, not in Eastern Europe, not anywhere in the world.

Have you reached your breaking point yet?

INTRODUCING THE GOVERNMENT’S NEWEST UNPAID SPY: YOU

by SIMON BLACK 

One of the most terrifying aspects of George Orwell’s seminal work 1984 was his description of how society had turned into one giant police agency. People were encouraged to rat each other out, groomed since childhood to be unpaid government spies:

“[Children] adored the Party and everything connected with it… All their ferocity was turned outwards, against the enemies of the State, against foreigners, traitors, saboteurs, thought-criminals. It was almost normal for people over thirty to be frightened of their own children.”

You Don't Bring Me Flowers Anymore

Japan is dying

By Al Fin

Japan is dying, and it has nothing to do with the Fukushima nuclear plant that was demolished by a massive earthquake and tsunami. Japan's death is due to debt and demographics -- the two twin demons of destruction sweeping through many of the world's most advanced nations, from Asia to Europe to North America.

Japan's Demographic and Debt Crisis

As many as 1/3 of Japan's population will disappear by the year 2060, due to low birthrates.

In year 2060, Japan will have 87 million people. The number of people 65 or older will nearly double to 40 percent, while the national work force of people between ages 15 and 65 will shrink to about half of the total population, according to the estimate, made by the National Institute of Population and Social Security Research. The total fertility rate, or the expected number of children born per woman during

An orderly EMU break-up, à la Française

Salut souverainistes

By Ambrose Evans-Pritchard

For those wanting more details on the euro break-up plan drafted by French economists, here is the link to the L’Observatoire de L’Europe website.

A few extracts, loosely translated: "The obstinate determination of governments to take us by forced march deeper into the euro impasse can only lead to the general aggravation of the economic situation in Europe."

"Even though our American and Chinese competitors have an interest in the survival of the single currency, the euro is condemned to an uncontrollable explosion sooner or late". (A nice twist that one, inverting the false and widely believed conspiracy theory that the US is trying to destroy the euro.)

If you are not on the table, you are on the menu

Why Our Currency Will Fail

By Chris Martenson

The idea that the very same economic forces that are currently plaguing Greece, et al., are somehow not relevant to the United States' circumstances does not hold water.  As goes the rest of the world, so goes the US. 

When we back up far enough, it is clear that money and debt are there to reflect and be in service to the production of real things by real people, not the other way around. With too much debt relative to production, it is the debt that will suffer. The same is true of money. Neither are magical substances; they are merely markers for real things. When they get out of balance with reality, they lose value, and sometimes even their entire meaning.

America Before The Entitlement State

Mutual Aid Vs The Ponzi Gang

By Yaron Brook and Don Watkins,

Reacting to calls for cuts in entitlement programs, House Democrat Henry Waxman fumed: “The Republicans want us to repeal the twentieth century.” Sound bites don’t get much better than that. After all, the world before the twentieth century–before the New Deal, the New Frontier, the Great Society–was a dark, dangerous, heartless place where hordes of Americans starved in the streets.

Except it wasn’t and they didn’t. The actual history of America shows something else entirely: picking your neighbors’ pockets is not a necessity of survival. Before America’s entitlement state, free individuals planned for and coped with tough times, taking responsibility for their own lives.

Getting stuck paying the bill

The case of Hong Kong in brief

By Tim Staermose

Hong Kong’s total population is around 7 million. The workforce is 3.75 million.  So generous are the tax breaks and allowances, only about 1.5 million people pay any tax at all.

A single person can earn HK$108,000 a year (about US$14,000) before owing any tax.  And a married person with a dependent spouse can earn HK$216,000 (US$28,000) tax-free.

Why We Are Totally Finished

Capitalism is dead and that is why we are totally screwed

by Davos Sherman Okst

Capitalism Fixes Problems & Preserves Democracy: Capitalism is what we should be relying on to fix our problems. Capitalism has its own ecosystem, just like biology's ecosystem. An economic ecosystem that weeds out the weak has parasites that eat the failures and new bacteria that evolves and grows replacements for that which failed. A system that keeps everything in balance.

The problem is we are no longer a capitalistic society. What we were taught in school is now utter and absolute nonsense. Capitalism is a thing of the past.

As outlined in "It's Not A Financial Crisis - It's A Stupidity Crisis", we created two back to back bubbles. The air out of the Tech Bubble was sucked up for fuel by our next stupidity crisis: The Housing Bubble.

The New Brazil vs anti-modern celebs

Appeasing anti-development fantasists

James Cameron and other wealthy Hollywooders are wrong if they think they can carry on bossing Brazil about.

by John Conroy 

Film director James Cameron, responsible for Terminator, Titanic and, more recently, Avatar, has been working on a considerable side-project for a few years now. Cameron film fans shouldn’t get their hopes up, however. This side-project is more political than filmic. He has been trying to prevent the Brazilian government from constructing Belo Monte, the world’s third-largest hydroelectric dam, on the Xingu river which runs through the Amazonian rainforest.

That a Western movie director has taken an interest in what happens in parts of the Brazilian interior is not without precedent. For some time now, be it John Boorman’s Emerald Forest(1985) or John McTiernan’s Medicine Man (1992), various movie-makers have treated Brazil’s forests as a source of locations and actors to set and populate their fairytales of environmental destruction. 

How Change Happens

It’s not politics

By Jeffrey Tucker

What drives the innovations that improve our standard of living at such an amazing clip? It’s not politic

My brother is teaching a semester in London, and he casually video Skyped me last week to show me around his apartment, which is small but charming. I reciprocated by hauling up the cover of the e-book I am reading, and shared my desktop to show a YouTube performance of Renaissance music I thought he would enjoy. We chatted a bit more and hung up. No “long distance” charges.

Feelings versus Facts

Illusions of Recovery 

There is no means of avoiding a final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of voluntary abandonment of further credit expansion, or later as the final and total catastrophe of the currency involved.” – Ludwig von Mises

  

The last week has offered an amusing display of the difference between the cheerleading corporate mainstream media, lying Wall Street shills and the critical thinking analysts like Zero Hedge, Mike Shedlock, Jesse, and John Hussman. What passes for journalism at CNBC and the rest of the mainstream print and TV media is beyond laughable. Their America is all about feelings. Are we confident? Are we bullish? Are we optimistic about the future? America has turned into a giant confidence game. The governing elite spend their time spinning stories about recovery and manipulating public opinion so people will feel good and spend money. Facts are inconvenient to their storyline. The truth is for suckers. They know what is best for us and will tell us what to do and when to do it.

Pushing Tensions to the Limit?

Russia and the United States

As Russia and the United States prepare for their respective presidential elections, tensions between the countries are growing. The central point of contention is U.S. ballistic missile defense (BMD) plans. Russia has several levers, including its ability to cut off supply lines to the NATO-led war effort in Afghanistan, to use in the standoff over BMD, but the United States could retaliate by supporting the current protests in Russia. Moscow is willing to escalate tensions with Washington but will not push the crisis to the point where relations could formally break.

Analysis

Relations between the United States and Russia are incredibly tense as both countries prepare for their respective presidential elections in 2012. The campaign season has presented both sides opportunities to escalate tensions, but it is unclear how far each side will go.

From "Hedge" To "Securitised" To "Ponzi"

Bill Gross On Minsky's Take Of The Liquidity Trap

by Tyler Durden

Over the weekend, we commented on Dylan Grice's seminal analysis which excoriates the central planning "fools", who are perpetually caught in the "lost pilot" paradigm, whereby the world's central planners increasingly operate by the mantra of “I have no idea where we’re going, but we’re making good time!” and which confirms that in the absence of real resolutions to problems created by a century of flawed economic models, the only option is to continue doubling down until terminal failure.

Basically, the take home message there is that once "economists" get lost in trying to correct the errata their own models output as a result of faulty assumptions (which they always are able to "explain away" as one time events), they drift ever further into unknown territory until finally we end up with such monetary aberrations as "liquidity traps", "zero bound yields" and, soon, NIRP (which comes after ZIRP), if indeed the Treasury proceeds with negative yields beginning in May under the tutelage of the Goldman-JPM chaired Treasury Borrowing Advisory Committee.

It takes, at least, two to tango

China Takes On Skeptics of Aid to Euro Zone

By Eliot Gao

Chinese Premier Wen Jiabao offered a forceful justification for helping Europe out of its debt crisis, in remarks that appeared aimed in part at countering public skepticism about the wisdom of using Chinese money to support rich world countries.

In remarks published Sunday, Mr. Wen pointed out that it's in China's best interest to aid its largest export market.

"Now that Europe is facing a [sovereign] debt crisis, we must consider our relations with Europe strategically, and preserve our national interests," Mr. Wen said, according to a statement on the central government's website.

Putin has Europe over a barrel. Again.

Power games

By The Automatic Earth

Western Europe is going to find itself very dependent on Russia as an energy supplier in the coming years, and as Eastern Europe already knows, that is an uncomfortable position to be in.

The dispute between Russia and the Ukraine over gas transit is not new. The Ukraine has been helping itself to gas for many years, and much of Ukrainian politics is based on jockeying for control of gas revenues.

Über Alles After All

Europe’s German future

By Christopher Caldwell

Last week Germany reclaimed its status as the leading power in Europe. In the two years since it became apparent that Greece was, essentially, bankrupt, there have been dozens of emergency meetings of the countries that use the common European currency, the euro. Most of the euro-using states believe that Germany—with a booming industrial economy, vast trade surpluses, a reputation for fiscal probity, and a history that makes it reluctant to reject the counsel of France—ought to cover the bill. Germany has long argued that Greece must become competitive again by selling off state assets and cutting government handouts. More recently, Germany has added another demand—that EU authorities be empowered to discipline Greece and other delinquent countries. At the Brussels summit on January 30, the Germans won. 

Aggregate nonsense

In the meantime, the debasement of paper money continues.

by DETLEV SCHLICHTER

The economic policy debate is dominated by wishful thinking and fallacies of the most dangerous kind propagated no less by the high and mighty in the policy bureaucracy and the alleged experts in the media.

Here is my point, and every clear-thinking person already knows it: That economic growth, and thus recovery from the crisis, will come about through the actions of governments is complete and utter nonsense. It is an illusion to assume that running budget deficits and printing lots of money and manipulating prices will make the economy better. Nevertheless, this fantasy is being reflexively regurgitated ad nauseam in countless reports and ‘analyses’ in the media so that nobody really bothers thinking about it anymore. A large part of the public seems to have been numbed into passively accepting it as the truth.

Corporate Power vs The Free Market

The Left and Public Choice Theory

by mark pennington

The mention of public choice theory to those on ‘the left’ of politics can prompt a variety of reactions. Some are based on ignorance about the very existence of public choice economics as a theoretical perspective. This reaction was demonstrated to me following one of the first lectures I gave in my academic career. Having listened to me speak for an hour on the power of incumbent firms to ‘capture’ regulatory agencies an attending student who was an activist in the Socialist Workers Party asked me, ‘when did you become a Marxist?’ Needless to say, for someone who considers himself a radical ‘anti-Marxist’ I was taken aback by this approach! What the question exemplifies though is an attitude that is widespread in academic circles – the assumption that an interest in power imbalances that favour business interests must equate with one having leftist or socialist sympathies. The idea that there might be a classical liberal/free market understanding of ‘power relations’ as exemplified by public choice theory is a possibility that simply hasn’t occurred to this particular species of left-winger.

A wrong solution to the right problem

How Europe Has Evolved From A Democracy To A Bankocracy And Why Austerity Will Lead To Chaos

A new way looking at the economy based on the central idea that what is important is not complicated and what is complicated is never important. 

by Tyler Durden

In one of the clearest (and most optically pleasing) discussions of recent months, David McWiliams (of Punk Economics) succinctly explains how Europe has evolved from a democracy to a bankocracy, the implications of which lead to austerity for the people and a Franco-German imposition (the 'fiscal compact') that can only lead to social unrest and chaos.

In this brief (and expertly illustrated) video, the Irish economist clarifies Europe's 'dirty little secret' where economic policy is being run almost exclusively for the banks which, as we see in Greece and Ireland, means the political elite are becoming more and more detached from the people. The terror of the r-word (referendum) looms large as McWilliams analogizes the two ways out of a debt crisis (squeeze the debtor or forgive the debtor) with the catholic and protestant perspectives on sin and forgiveness.

While falling short of calling for governments to go full-Keynesian (everyone knows you never go full-Keynesian), he (focusing on the problems of the current hopeful solution) summarizes the fiscal union as envisaged by France and Germany (which actually penalizes countries that are in trouble, rather than help them) as not a friendly-union but a vindictive strait-jacket put in place to help banks, not countries.

It comes as no surprise to him that the price of Gold (and Bunds) is firm as the 'example' that Greece is likely to set (or face extreme social upheaval) will domino-like stumble across the other troubled nations and as he points "we have been warned". Our view remains that austerity works if countries manage to cut expenses while keeping a balance. Alas, the balance is out of skew due to 30 years of runaway full-Keynesianism, which leads indeed to the problems that McWilliams so well espouses.

Let's Dream A Grand Dream For Greece

The case of Japan

By Nathan Lewis

In 1949, Japan was a wreck. Four years had passed since the end of World War II, but the economy was still moribund. The major cities, flattened and burned during the war, remained mostly unreconstructed. Only two trains a day ran on the most important rail line, between Tokyo and Osaka. Hyperinflation made normal commerce impossible. What industrial assets remained after the war, such as electricity generation plants and factories, were being stripped by the occupying army as “reparations,” and shipped overseas. The previous government was disbanded, and a new constitution, and a new government, were established. People were on the brink of starvation.

This was the beginning of one of the greatest economic advances of the twentieth century.

In comparison, Greece’s problems are trivial. Banks are insolvent? That is nothing but paper accounting. Try having your major cities bombed to rubble, and a generation of young men slaughtered on islands in the Pacific. Government default? So what. Hyperinflation? Nowhere to be seen. Starvation? Hardly. Occupation by a hostile foreign military? Not on anyone’s list of worst fears.

The End of the Debt Supercycle

It's Time to Make the Hard Decisions

By John Mauldin

Back in the 1930's, Irving Fisher introduced a concept called the 'debt supercycle.' Simply put, it posits that when there is a buildup of too much debt within an economy, there reaches a point where there simply is no other available solution but to let it rewind.

What are they thinking ?

It's The Leadership Stupid

by Mike Krieger

It’s the first time we have power with people that don’t have courage.  The people on top have power without courage.  You cannot find any other society like it.  Take the knights.  The knights were people who of course, their trade was risking their lives.  In theory, The President of the United States was supposed to be first in battle.  Not someone pushing a button.  The only way you can have a safe society is by moving these types of people (that risk nothing personally and take all the upside) out of their positions.  Making them more accountable.

- Nassim Taleb (in this fantastic interview )

From our perspective, this is a critical idea. As we have said for several years, we do not see Iran as close to having a nuclear weapon. They may be close to being able to test a crude nuclear device under controlled circumstances (and we don't know this either), but the development of a deliverable nuclear weapon poses major challenges for Iran.

Moreover, while the Iranians may aspire to a deterrent via a viable nuclear weapons capability, we do not believe the Iranians see nuclear weapons as militarily useful. A few such weapons could devastate Israel, but Iran would be annihilated in retaliation. While the Iranians talk aggressively, historically they have acted cautiously. For Iran, nuclear weapons are far more valuable as a notional threat and bargaining chip than as something to be deployed. Indeed, the ideal situation is not quite having a weapon, and therefore not forcing anyone to act against them, but seeming close enough to be taken seriously. They certainly have achieved that.

- Stratfor  “Considering a U.S.-Iranian Deal,” January 24th, 2012

A strange coincidence

45% Of Greeks Have Never Used The Internet

If one were to consider that nearly half the population of a given country has never had the pleasure of killing otherwise efficient time with the likes of Facebook, and other fad internet sensations, one would assume that the efficiency of the population would be far higher than other places whose citizens spend every waking hour gazing at a monitor. One would be wrong. As the following chart from Eurostat via Goldman shows, about 45% of the Greek population has never used the internet. Surprisingly the balance of the PIIGS is not far behind, with Portugal, Italy and Spain hot on Greece heels (which 5 years ago had two thirds of its population never interact with the web). Is it possible that sitting in front of a computer, uploading millions of pics and "liking" this and that does indeed do miracles for globalization and corporate efficiency? 

The Cradle of Civilization is rocking amid an array of winds and storms

A History Lesson In Crisis

by Tyler Durden

With the world ever more lethargic daily, as if in silent expectation of something big about to happen (quite visible in daily trading volumes), it is easy to forget that just about a year ago the Mediterranean region was rife with violent revolutions in virtually every country along the North African coast. That these have passed their acute phase does not mean that anything has been resolved. And unfortunately, as BMO's Don Coxe reminds us, it is very likely that the Mediterranean region, flanked on one side by the broke European countries of Greece, Italy, Spain (and implicitly Portugal), and on the other by the unstable powder keg of post-revolutionary Libya and Egypt, will likely become quite active yet again. Only this time, in addition to social and economic upheavals, a religious flavor may also be added to the mix. As Coxe says: "Today, the Mediterranean is two civilizations in simultaneous, rapidly unfolding crises.

To date, those crises have been largely unrelated.

A republic, if you can keep it

The Revolution of 1913

By Bill Bonner

Readers will scarcely have given any thought to the fact that they have never lived in the system of government argued for by Madison, Jay, and Hamilton in the Federalist Papers.

“It may come as a shock …” wrote John Flynn, “to be told that [you] have never experienced that kind of society which [our] ancestors knew as the American Republic …” Flynn, the editor of the popular weekly the Saturday Evening Post, had already come to this conclusion in 1955. In his book The Decline of the American Republic, Flynn observed that Americans needlessly “live in the war-torn, debt-ridden, tax-harried wreckage of a once imposing edif ice of the free society which arose out of the American Revolution on the foundation of the U.S. Constitution.”

An empire needs a source of income sufficient to fund its military campaigns, regulatory regimes, and domestic schemes. It also needs a strong central authority to direct its ambitious new programs. In one short 12-month span, a year the writer Frank Chodorov calls the “Revolution of 1913,” the empire got the tools it needed. That year—the same year European countries abandoned the gold standard in preparation for World
War I—the old Republic ceased to exist.

WHERE THE MONEY COMES FROM

A lynch mob with PhDs

Banker-bashers

 The mad political pursuit of ‘evil’ Fred Goodwin confirms that bankers are to posh commentators what paedos are to tabloid hacks.

By Brendan O’Neill 

The mad pursuit of Fred Goodwin and his ill-gotten knighthood confirms that bankers are the new paedophiles. Bank bosses are to posh commentators what paedos were to hacks at the News of the World - wicked creatures one can rail against in order to feel puffed-up and Good. Yes, the broadsheet bruisers and opportunistic politicians calling for Fred the Shred’s scalp might not use foul phrases like ‘kiddie fiddler’ and they might pepper their output with serious-looking graphs and pie charts, but don’t be fooled - behind the erudite veneer there lurks the old tabloid desire to project society’s sins on to one moral misfit and cast him out of decent society.

Dumb as a rock

19 Crazy Things That School Children Are Being Arrested For In America

With each passing year, the difference between America's prisons and America's public schools becomes smaller and smaller.  As you read the rest of this article, you will be absolutely amazed at some of the crazy things that school children in America are being arrested for.  When I was growing up, I don't remember a single police officer ever coming to my school.  Discipline was always handled by the teachers and by the principals.  But today, there are schools all over the country that have police officers permanently stationed in the halls.  Many other schools will call out police officers at the drop of a hat.  In the classrooms of America today, if you burp in class, if you spray yourself with perfume or if you doodle on your desk, there is a chance that you will be arrested by the police and hauled out

The Problem with Privatization

It's about competition
By Steven Horwitz

Classical liberals commonly favor “privatization” of many government activities.  Their case, of course, is that the private sector would provide goods and services at lower cost and of higher quality than government can.  Since classical liberals are right about this, why do I think there’s a problem with privatization?

The answer is that the call for privatization does not get at the real reason the private sector works better than the political sector.  The great advantage of the private sector is not private ownership per se but that private owners compete with one another.  Classical liberals would do better to contrast not the “private” and “public” sectors, but the “competitive” and “monopolistic” sectors.  If the goal is efficiency in delivering the goods, private ownership is a necessary but not a sufficient condition.  Instead of calling for the “privatization” of government services, classical liberals should be calling for “de-monopolization.”

Private Monopoly

The Breakdown of the Kremlin Clans

Russia's Shifting Political Landscape 

One of the issues causing -- and prolonging -- Russia's current political instability is the complete breakdown of the Kremlin's power clans.

By Stratfor 

When Prime Minister Vladimir Putin came to power in 1999, he began creating a complex organization comprising many ambitious and powerful people to help him rule the country. Putin understood that he would need a mix of people who could handle Russia's need for tight security and control in the short term but strategize for a more modern and liberal economy in the future -- seemingly conflicting aims, but Putin saw both as necessary to address the problems facing the country.

Though there are countless small groups and loyalties among those in the Kremlin, Putin's system can be divided essentially into two clans -- the siloviki and the civiliki. Two very ambitious (and at times ruthless) men ran these clans: Deputy Prime Minister Igor Sechin,

The German Dilemma

Germany's Role in Europe and the European Debt Crisis

By George Friedman

The German government proposed last week that a European commissioner be appointed to supplant the Greek government. While phrasing the German proposal this way might seem extreme, it is not unreasonable. Under the German proposal, this commissioner would hold power over the Greek national budget and taxation. Since the European Central Bank already controls the Greek currency, the euro, this would effectively transfer control of the Greek government to the European Union, since whoever controls a country's government expenditures, tax rates and monetary policy effectively controls that country. The German proposal therefore would suspend Greek sovereignty and the democratic process as the price of financial aid to Greece.

Strange things are happening on the Nile ...

Egypt caught in spiral of disaster
 

By Victor Kotsev 

Many things that are hard to believe - or explain - happen in Egypt; unfortunately, it all looks more like a spiraling nightmare than a fairy tale in the last year or so. The latest violence on Wednesday, which resulted in at least 74 dead and over 1,000 wounded, and which The New York Times described as "the deadliest soccer riot anywhere in more than 15 years", is a fitting example of that. 

The calamity came in the wake of another large brawl on Tuesday, between members of the secular opposition and Muslim Brotherhood supporters who reportedly attempted to block their march against the military government of the Supreme Council of the Armed Forces. Over 70 people were wounded in the clashes. [1] 

The social and political foundations of culture

The Politics of Johann Wolfgang Goethe

by Hans-Hermann Hoppe

This year marks the 250th birthday of Johann Wolfgang von Goethe. Most Europeans know that he was the greatest of all German writers and poets and one of the giants of world literature. Less well known is that he was also a thorough-going classical liberal, arguing that free trade and free cultural exchange are the keys to authentic national welfare and peaceful international integration. He also argued and fought against the expansion, centralization, and unification of government on grounds that these trends can only hinder prosperity and true cultural development. Because of his relevance to the ongoing construction of Europe, I'd like to nominate Goethe as the European of the millennium.

Born in 1749 in the free imperial city of Frankfurt am Main into an upper-middle-class family, Goethe studied law in Leipzig and Strasbourg. However, on receiving his doctorate and practicing briefly as a lawyer, he set out on a spectacularly successful career as poet, dramatist, novelist, lyricist, artist, and critic of architecture, art, literature, and music. He was also a natural scientist and a student of anatomy, botany, morphology, and optics.