Too Big To Understand

Bigger and more extensive regulation can make a system less well-regulated

By John Aziz

One thing that has undergone hyperinflation in recent years is the length of financial regulations:

The Dodd-Frank regulatory hyperinflation crowds out those who cannot afford teams of legal counsel, compliance officers, and expansive litigation. Dodd-Frank creates new overheads which are no challenge for large hedge funds and megabanks armed with Fed liquidity, but a massive challenge for startups and smaller players with more limited resources.

As BusinessWeek noted in October:

The law requires Hedge Funds to register with the Securities and Exchange Commission, supply reams of sensitive data on trading positions, carefully screen potential investors, and hire compliance officer after compliance officer.

So, is this expansion in volume likely to improve financial stability? No — the big banks are bigger and more interconnected than ever, which was precisely the problem before 2008, and they are still speculating and arbitraging with very fragile strategies that can incur massive losses as MF Global’s breakdown and more recently the London Whale episode proves.

Andy Haldane laid out the problem perfectly in his recent paper The Dog and the Frisbee:

Catching a frisbee is difficult. Doing so successfully requires the catcher to weigh a complex array of physical and atmospheric factors, among them wind speed and frisbee rotation. Were a physicist to write down frisbee-catching as an optimal control problem, they would need to understand and apply Newton’s Law of Gravity.

Yet despite this complexity, catching a frisbee is remarkably common. Casual empiricism reveals that it is not an activity only undertaken by those with a Doctorate in physics. It is a task that an average dog can master. Indeed some, such as border collies, are better at frisbee-catching than humans.

We’re no longer citizens, we’re suspects

The new Communications Data Bill continues the trend away from privacy to giving the state full access to our private lives

by Luke Gittos 

Following complaints in the halls of Westminster over the past week, UK prime minister David Cameron announced yesterday that the Communications Data Bill will have to be redrafted. The bill - which would have granted draconian, almost open-ended snooping powers to the home secretary to monitor our communications - will now have to be rewritten with greater ‘safeguards’ to protect our privacy.

We should be clear that the retreat on this bill has little or nothing to do with a commitment to safeguarding privacy. Undoubtedly, it is an affordable concession by the Tories to the Liberal Democrat leader Nick Clegg, who indicated that his party had ‘serious concerns’ around the scope of the bill. Clegg’s concerns were typical of the governmental furore over the last week, which has been narrowly focused on the scope of the powers granted under clause 1 of the bill, but which has said nothing about its stated purpose: to facilitate greater disclosure of data from private companies to the state.

The anticipated powers under clause 1 were absurdly broad. It would have given the home secretary an almost open-ended power to make orders, outside the scrutiny of parliament, requiring communications companies to retain and provide communications data.  It would have allowed for disclosure of an absurd amount of information regarding our communication, even down to the device upon which a communication was made (assuming this information is available).

But because the criticism of the bill simply targeted the scope of these ludicrously wide powers, it is likely that the redraft will simply reflect the recommendations of the cross-party committee which scrutinised the bill. The committee, in a report published last week, recommended that the power under clause 1 be restricted in order that the home secretary only be granted the power to make orders through the ‘super affirmative’ procedure. This means that the minister will have to go through more parliamentary committees if he or she wants to extend their own powers under any future act.

Drink up while you can

When being green isn’t enough

BY FRACK GORDON

Statism rests on a fairly simple conceit: the free market is ruled by greed and exploitation, so government intervention is necessary to level the playing field. Inherent in that mindset is the assumption that the government is benevolent, and its actors are without their own selfish motivations. A selective naivety is necessary to maintain this wishful worldview against the constant barrage that is reality, and it leads to some fascinating contradictions. For example, the same group that believes George W. Bush started a war in order to drive up Halliburton’s stock price (or something), never stops to think about the potential pitfalls of handing the government other immense powers, such as defining what the term “health care” will mean.

Politicians are happy to exploit this naivety to accumulate power, feigning self-righteous idealism to mask their ulterior motive. Getting away with anything is possible as long as you claim that you’re doing it for the children, or to uplift the disadvantaged worker, or to strengthen the middle class, or to protect… the bottled soda industry?

We’ll get to that in a second. First, recall O’Brien’s dark reveal at the end of George Orwell’s classic1984: 

The Party seeks power entirely for its own sake. We are not interested in the good of others; we are interested solely in power. Not wealth or luxury or long life or happiness: only power, pure power… We are different from all the oligarchies of the past, in that we know what we are doing. All the others, even those who resembled ourselves, were cowards and hypocrites…  They pretended, perhaps they even believed, that they had seized power unwillingly and for a limited time, and that just round the corner there lay a paradise where human beings would be free and equal. We are not like that. We know that no one ever seizes power with the intention of relinquishing it. Power is not a means; it is an end. One does not establish a dictatorship in order to safeguard a revolution; one makes the revolution in order to establish the dictatorship. 

We’ll quickly slide past how Egypt is providing a very depressing recent real world example of that last line, and transition into Mark Steyn’s response to the Chick-fil-A-permitting absurdity in Chicago this past summer:

Pat Finucane wasn’t the only victim of state terror

Observers ‘shocked’ to discover that Britain colluded with loyalist death squads: where have you been for the past 30 years?

by Brendan O’Neill 

There were ‘shocking levels of collusion’ in the murder of the Irish republican lawyer Pat Finucane, said prime minister David Cameron yesterday.

Launching a long-awaited report into the 1989 killing, in which Finucane was shot dead in front of his family in his north Belfast home by loyalist gunmen, Cameron said he was ‘deeply sorry’ over the whole incident. He confirmed that the Pat Finucane Review, set up last year by the secretary of state for Northern Ireland, had found that ‘agents of the state’ were involved in the killing of Finucane; indeed, ‘state employees played key roles’ in the murder, providing assistance and information to the Ulster Defence Association which pulled the trigger in Finucane’s home. After the killing, members of both the British Army and the Royal Ulster Constabulary (RUC) lied to investigators, in a ‘relentless attempt to defeat the ends of justice’, says the review.

Cameron’s use of the word ‘shocking’ has been splashed across the media coverage. Yet while the report of the Pat Finucane Review might make for disturbing reading - highlighting a sordid instance when the British state assisted in the murder of someone it considered a pest - is it really shocking? It is well known, at least among those who looked beyond the headlines during the conflict in Northern Ireland from 1969 to 1994, that Britain’s security services colluded with loyalist paramilitaries. Some of the families of those murdered by loyalists, including Finucane’s, have been demanding inquiries into collusion for ages. In the Eighties and Nineties, radical journalists, mainly in Ireland but also a few in Britain, frequently reported on acts of collusion between the British state and loyalist death squads. Yet back then, nobody in the mainstream wanted to talk about it, much less employ a QC backed by the PM to investigate the claims and write a ‘shocking’ official report about them.

How the ‘peace process’ provokes violence

Recent riots in Belfast confirm that the politics of cultural identity does little more than reinforce sectarian divisions

by Jason Walsh 

A week of riots in Belfast is nothing new. But isn’t the peace process supposed to have put an end to all this? Think again.

The trouble started last Monday when Belfast City Council passed a motion to fly the Union flag on 18 to 20 state occasions annually, rather than on 365 days a year, as it had done previously. The motion, proposed by the liberal unionist Alliance Party, was a compromise measure; the original motion, tabled by the nationalist Social Democratic and Labour Party (SDLP) and supported by Sinn Fein, had sought to stop flying the flag entirely.

Predictably, given mainstream Unionist parties had been leafleting on the matter, an angry mob appeared at Belfast City Hall. Perhaps less predictably, and certainly not predicted by the police, a riot broke out and the building was stormed. This was followed by five further nights of violence, burnt-out cars and death threats, before it all finally tapered out on Saturday.

Press coverage has focused on outrage among the middle classes and the threat that the violence poses to traders and wider investment in the ‘New Northern Ireland’. Neither of these claims is inaccurate, but both are beside the point. The most revealing thing about the riots is that they show the vacuity of identity politics – on both sides of the sectarian divide.

A properly republican response to British sovereignty in Northern Ireland would not be to dispute the fact of its existence by lowering flags, but rather to question it and argue for Irish sovereignty. Alas, the SDLP’s motion, which is hard to read other than as an attempt to out-‘green’ Sinn Féin, focused on the cultural trappings of sovereignty - identity - rather than its reality.

War-making for Losers

Shooting Blanks

By Mark Steyn

The new U.S. Army manual for troops heading east apparently blames the tendency of Afghanistan’s U.S.-trained soldiers and policemen to shoot their Western “allies” on “American cultural ignorance.” Fortunately, the manual offers a solution:

The draft leaked to the newspaper offers a list of “taboo conversation topics” that soldiers should avoid, including “making derogatory comments about the Taliban”…

I mean, it’s not like they’re the enemy or anything.

. . . “advocating women’s rights,” “any criticism of pedophilia,” “directing any criticism towards Afghans,” “mentioning homosexuality and homosexual conduct” or “anything related to Islam.”

Stick to safe topics like the weather, the impressive increase in opium production, and how hot the local warlord’s child bride looks now she’s back in the burka. Then, after handing your trainee his weapon, try to back out of the room slowly without catching his eye.

As Scaramouche says, don’t let’s be beastly to the Taliban.

China is now world’s No. 1 manufacturer

America’s long reign as the world’s No. 1 manufacturer has finally come to an end

By Mark J. Perry

The United Nations updated its National Accounts Main Aggregates Database today with data for 2011.  The chart above compares the annual manufacturing output of the US and China from 1970 to 2011 measured in current US dollars.  Before 2004, the United Nations only reported “Mining, Manufacturing and Utilities” for China, so the comparison above is for that measure of manufacturing in both countries, rather than just “manufacturing.”

In 2010, the manufacturing output of both countries was almost exactly equal, with China at $2.373 trillion and the US at $2.365 trillion.  But in 2011, China’s manufacturing output surged by 23% while manufacturing output in the U.S. only increased by 2.8%.  That brought China’s manufacturing output last year to more than $2.9 trillion, which was almost half a trillion dollars (and 20%) more manufacturing output than the $2.43 trillion of manufacturing output that was produced in the U.S. last year.

Looking at just manufacturing (without mining and utilities) in 2011, China’s factories produced $2.34 trillion of output, which was 23% higher than factory output in the US at $1.9 trillion.

Bottom Line: In 2010 the U.S. and China produced roughly the same amount of manufacturing output, but in 2011 China clearly overtook the U.S. to become the world’s largest manufacturer.  America’s long reign as the world’s No. 1 manufacturer has finally come to an end. 

Oscar Niemeyer, R.I.P.

His Inhuman Elegance

BY THEODORE DALRYMPLE

Can an architect design a beautiful building by luck or accident, and if he does so, is it enough to redeem his life’s work? There is no doubt that Oscar Niemeyer, who has died at the venerable age of 104, built several beautiful buildings, the best of them (of all that I know) the Itamaraty Palace in Brasilia, the seat of the Brazilian Ministry of External Relations. It was not his fault that his original conception, which included the palace’s setting, was comprehensively ruined by the addition of a banal office block behind it, built to accommodate additional bureaucrats. And to mold concrete into beautiful forms, as Niemeyer did in this building, depriving it of its usual inhuman quality, took imagination and ability. Indeed, it is a feat that I’ve not seen equaled or even approached elsewhere.

An author has a right to be judged by his best book, but does an architect have the right to be judged by his best building? The cases are not analogous, for while bad books can be ignored, bad buildings cannot, and Niemeyer built many of them. An artist whose work obtrudes itself on the public cannot be judged by the same criteria as one whose work is easily avoided.

Among the terrible buildings Niemeyer built are the Edificio California in São Paulo and the National Theatre in Brasilia, the former worthy of a Soviet provincial capital and the latter more like a giant nuclear fallout shelter than like a resort of entertainment or culture. That Niemeyer was a man of talent, as his best work proves, only makes his considerable contribution to ugliness all the more unfortunate.

His greatest monument was Brasilia, where one can see his most elegant and ugliest work, the latter combining banality and brutality. The city was a joint enterprise of Niemeyer and the urbanist Lucio Costa; Costa planned the city, Niemeyer built the buildings. The overall effect is, in my opinion, inhuman (though it is only fair to mention that people who have spent their lives there love it), and the inhumanity was connected with their ideology.

As is well-known, Niemeyer was a Communist for most of his adult life and never recanted. Even at its best, his architecture lacks human warmth. The Palácio da Alvorada, the seat of the Brazilian president, is elegant in form, but no one who didn’t already know its function would dream that it was a residence. It would be suited to that purpose if man had the coldly streamlined form of the praying mantis. Niemeyer’s creations would be perfect if only no one had to live in them; people spoil them so. Attempts to humanize the interiors of his architectural forms are unavailing and look tawdry. An upholstered sofa in this setting serves the same function as a child’s teddy bear in a threatening or incomprehensible world: it is something to hang on to in an emotionally cold environment.

Niemeyer was by all accounts a charming man, and he never used his fame or position to accumulate a fortune, as he could easily have done. He was disinterested. Like many architects of the twentieth century, he built for humanity; as for men, he knew them not.

The Efficient Subsidize The Inefficient

Borrowing money becomes the only way to prop up the Status Quo, inevitably leading to insolvency

by Charles Hugh-Smith

Consider the consequences of the efficient subsidizing the inefficient. As long as the surplus generated by the efficient is larger than the cost of supporting the inefficient, the system can continue.

But once the cost of subsidizing the inefficient exceeds the surplus generated by the efficient, the system is doomed to eventual insolvency.

There is one way to fill the deficit, of course: borrow money. This is the strategy being pursued by the Status Quo in developed and developing economies alike.

Identifying the efficient and inefficient sectors is not straightforward, as everyone reports they are being highly efficient. Since most of the economy is controlled by the State (a monopoly) and its favored private monopolies/cartels, the market has few opportunities to exert competition.

How much competition is there in the higher education cartel or the sickcare (a.k.a. healthcare) cartels? Very little.

As long as the inefficient are protected from competition and amply subsidized, there are no incentives to become more efficient. In effect, becoming more inefficient is rewarded.

One broad measure of efficiency for nations which do not own the global reserve currency is trade. Nations with highly efficient sectors tend to export the products of those sectors, while nations with inefficient sectors tend to import more than they export. (Owning the reserve currency creates a unique situation I have discussed elsewhere: Understanding the "Exorbitant Privilege" of the U.S. Dollar November 19, 2012)

The Conservative Crisis

The GOP's only hope is to offer a real alternative after the inevitable overreach of liberal government

By PATRICK J. BUCHANAN

As the white flag rises above Republican redoubts, offering a surrender on taxes, the mind goes back to what seemed a worse time for conservatives: December 1964.

Barry Goldwater had suffered a defeat not seen since Alf Landon. Republicans held less than one-third of the House and Senate and only 17 governorships. The Warren Court was remaking America.

In the arts, academic and entertainment communities, and national press corps, conservatives were rarely seen or heard. It was Liberalism’s Hour, with America awash in misty memories of Camelot and great expectations of the Great Society to come in 1965.

That year, however, saw escalation in Vietnam, campus protests, and civil disobedience against the war. That August, there exploded the worst race riot in memory in the Watts section of Los Angeles, with arson, looting, the beating of whites, and sniper attacks on cops and firemen.

A year after LBJ’s triumph, black militants and white radicals were savaging the Liberal Establishment from the left, while Gov. George Wallace had come north in 1964 to win a third of the vote in the major Democratic primaries with an assault from the populist right.

Below the surface, the Democratic Party was disintegrating on ethnic, cultural and political lines. Law and order and Vietnam were the issues. Richard Nixon would see the opening and seize the opportunity to dismantle FDR’s coalition and cobble together his New Majority.

Today, the GOP strength in the House, Senate and governorships is far greater than anything Republicans had in the 1960s. The difference is that, then, we could visualize a new majority of centrist Republicans, Goldwater conservatives, Northern Catholic ethnics and Southern Protestant Democrats.

The charge of the anti-enlightenment brigade

Far from heralding a new dawn of reason, today’s New Atheists are at the vanguard of the counter-Enlightenment

by Michael Fitzpatrick 

I don’t know if many of you saw the Atheist Bus a few years ago. It toured around London for a while and on its side an advert read: ‘There’s probably no God. Now stop worrying and enjoy your life.’

I was reminded of this when I was reading a new book by Francis Spufford called Unapologetic: Why, Despite Everything, Christianity Can Still Make Surprising Emotional Sense. He asked the interesting question: what is the most objectionable word in that bus-side slogan? There was controversy in the humanist world about the ‘probably’; however, Spufford’s main objection was to the word ‘enjoy’ - ‘stop worrying and enjoy your life’. The point that Spufford made was that the underlying implication of this statement is that enjoyment is a natural state of affairs that’s only being disturbed by people being worried by preachers and believers - a point of view he briskly dismisses as complete bollocks. ‘Enjoy’ doesn’t really connect with a whole vast range of problems of human experience. That statement seems to be pitched to an idealised consumer. What would it mean to someone experiencing loss, bereavement, illness, death, indeed all the vicissitudes of life? It leaves people with no sense of any hope or consolation.

But the Atheist Bus was a great success. Beginning with a Guardian blog by Ariane Sherine – a reaction to evangelical Christian propaganda that claimed all non-believers were going to hell – it raised £144,000 in a fortnight and soon went global. The Atheist Bus is now, as you can see on the campaign website, in every country in the world, complete with a whole host of celebrity endorsements.

But here’s the question that interests me about this: the guy with the sandwich board saying ‘repent, the end is nigh’, that sort of religious propaganda, has been around all our lives. Why, suddenly, at this stage in history, has this become the focus of a major campaign among the thoughtful sections of society? Moreover, why does the campaign have such a shouty character?

What is wrong about the euro, and what is not

Hard money has a tendency to expose illusions

by DETLEV SCHLICHTER

Every Monday morning the readers of the UK’s Daily Telegraph are treated to a sermon on the benefits of Keynesian stimulus economics, the dangers of belt-tightening and the unnecessary cruelty of ‘austerity’ imposed on Europe by the evil Hun. To this effect, the newspaper gives a whole page in its ‘Business’ section to Roger Bootle and Ambrose Evans-Pritchard, who explain that growth comes from government deficits and from the central bank printing money, and why can’t those stupid Europeans get it? The reader is left with the impression that, if only the European states could each have their little currencies back and merrily devalue and run some proper deficits again, Greece could be the economic powerhouse it was before the Germans took over.

Ambrose Evans-Pritchard (AEP) increasingly faces the risk of running out of hyperbolic war-analogies sooner than the euro collapses. For months he has been numbing his readership with references to the Second World War or the First World War, or to ‘1930s-style policies’ so that not even the most casual reader on his way to the sports pages can be left in any doubt as to how bad this whole thing in Europe is, and how bad it will get, and importantly, who is responsible. From declining car sales in France to high youth-unemployment in Spain, everything is, according to AEP, the fault of Germany, a ‘foolish’ Germany. Apparently these nations had previously well-managed and dynamic economies but have now sadly fallen under the spell of Angela Merkel’s Thatcherite belief in balancing the books and her particularly Teutonic brand of fiscal sadism.

Blame it on ze Germans

The pending bankruptcy of France’s already semi-nationalized car industry is, of course, not to be blamed on high French taxes, strangling French labour market regulation, increasingly uncompetitive French wages, and grave business errors – French car companies have been falling behind their German rivals for years -, but the result of French ‘austerity’, which hasn’t even started yet and will culminate in – quote AEP, and drum roll please! – a ‘shock therapy’ next year of 2 percent. Mind you, France’s state has a 57% share in GDP, and the economy deserves the label socialist more than capitalist. Does France really need more state spending, or even unchanged state spending? Another government stimulus? I bet you could cut the French state by 10 percent instantly, and in a year or two you had faster growth, not slower growth!

The Terminator

A paean of praise to the humble cockroach

By Tim Price

“Our Russian psychosis has two curious features. Firstly, that an 80 per cent Christian Orthodox society for some reason reacts to a Mayan calendar which no one has ever seen. And secondly, that the end of the world is perceived as an economic crisis that can be survived on the banal level of consumption.”

Russian broadsheet ‘Vedomosti’, quoted in The Daily Telegraph last Friday in an article entitled ‘Russian residents buy up tinned goods and matches ahead of apocalypse’.

Speaking of apocalypse, there is an increasingly urgent debate occurring in what’s left of the financial markets over the stability of that mountain of government debt that sets its long shadow over everything. The mountain is not localised or restricted to any one region. As befits the current economic climate, it’s global in scale and intractable in structure. As Kyle Reese remarks of The Terminator in the film of the same name, the debt mountain,

“… is out there. It can’t be bargained with. It can’t be reasoned with. It doesn’t feel pity, or remorse, or fear. And it absolutely will not stop, ever…”

A bond fund manager makes the following comment on David Fuller and Eoin Treacy’s excellent Fullermoney strategy website:

“If this is a bond bubble it is the most widely anticipated ‘bubble’ I have ever seen; everyone is identifying it. A second point is that the debt de-leveraging process and time frame is not like emerging from a less leveraged recession. It is a pernicious and deflationary phenomenon. Witness that for all the stimulus the CBs [central banks] are throwing at the issue, it has been terribly hard to create growth, inflation or cause rates to rise. We are getting minimal aggregate GDP growth in the developed world even with historically unprecedented base money creation.

Bond in Bankruptcy

A Godzilla movie without the  happy ending

By mark steyn

For some reason, the quadrennial humiliation of the Republican presidential candidate now coincides with the release of the new Bond movie. Don't ask me why; probably a constitutional amendment I missed along the way. Last time round, Kevin Sessums interviewed Daniel Craig and, as a final question, asked which presidential nominee would make the better 007:

Craig doesn't hesitate. "Obama would be the better Bond because — if he's true to his word — he'd be willing to quite literally look the enemy in the eye and go toe to toe with them. McCain, because of his long service and experience, would probably be a better M," he adds, mentioning Bond's boss, played by Dame Judi Dench. "There is, come to think of it, a kind of Judi Dench quality to McCain."

A few readers may recall my response in this very space four years ago:

Oh, great. John McCain has survived plane crashes, just like Roger Moore in Octopussy. He has escaped death in shipboard infernos, just like Sean Connery in Thunderball. He has endured torture day after day, month after month, without end, just like Pierce Brosnan in the title sequence of Die Another Day. He has done everything 007 has done except get lowered into a shark tank and (as far as we know) bed Britt Ekland and Jill St. John.

And yet Daniel Craig gives him the desk job.

How A Handful Of Unsupervised MIT Economists Run The World

They are accountable to absolutely nobody

by Tyler Drusden

Ever get the feeling that the entire global economy is one big experiment conducted by several former Keynesian economists from MIT with a bent for central planning, who sit down in conspiratorial dark rooms in tiny Swiss cities and bet it all on green until they double down so much nobody even pays attention to the game? No? You should. Jon Hilsenrath, of all people, explains why.

From the WSJ:

Every two months, more than a dozen bankers meet here on Sunday evenings to talk and dine on the 18th floor of a cylindrical building looking out on the Rhine.

The dinner discussions on money and economics are more than academic. At the table are the chiefs of the world's biggest central banks, representing countries that annually produce more than $51 trillion of gross domestic product, three-quarters of the world's economic output.

Of late, these secret talks have focused on global economic troubles and the aggressive measures by central banks to manage their national economies. Since 2007, central banks have flooded the world financial system with more than $11 trillion. Faced with weak recoveries and Europe's churning economic problems, the effort has accelerated. The biggest central banks plan to pump billions more into government bonds, mortgages and business loans.

Pick your poison

Harry Truman doesn’t live here, y’all

By Jay Nordlinger

Many Republicans don’t want Susan Rice to become secretary of state. Her performance after the Benghazi attack was disgraceful, they say. Sure it was. But really: Who cares who’s secretary of state? Barack Obama is the president. The commander-in-chief. The decider. He’s the people’s choice. And whoever is secretary of state, will be his instrument. Moreover, whoever is secretary of state will agree with him — will share his worldview.

So . . .

I have a memory from the 2008 presidential campaign. A TV journalist named Gwen Ifill was scheduled to moderate the vice-presidential debate. And, interestingly enough, she had a book due out on January 20, Inauguration Day: The Breakthrough: Politics and Race in the Age of Obama. Obviously, she had a rooting interest — even a commercial interest — in Obama’s election. So why should she moderate a debate? That’s what a lot of Republicans said.

But others of us said, “Who cares, really? How would Ifill be any different from her colleagues, whether they have an Obama book pending or not? Pick your poison.”

That is my attitude about the secretary of state: Susan Rice, Hillary Clinton, John Kerry, Nancy Pelosi, Maxine Waters, Noam Chomsky (I exaggerate a little bit) — who cares who gets the nod? It will be an Obama foreign policy, regardless. It will be a foreign policy of the present-day Democratic party regardless.

Barack Obama is the people’s choice. They made that perfectly clear on November 6. Why he shouldn’t get his choice in the State Department, I’m not sure.

Is that too churlish for you? (Yeah, for me too, probably.)

Thank heaven the modern Democrats exist. How else would America get a black female secretary of state named Rice?

I was interested to read this article on a Korean rapper — not on a Korean wrapper, but about a Korean rapper. This is a rapper who spews hate and lies against the United States. Typical stuff, the kind of thing you’ve heard your whole life. (At least I have.) According to the article, this guy “is slated to perform for President Obama for a Christmas in Washington special.” Sure.

Welcome to Christmas Cubes!

Jihad on Christmas Trees

by Soeren Kern

"What will be next? Will all Easter eggs be banned in Brussels because they refer to Easter?" — Bianca Debaets, of Belgium's Christian Democratic and Flemish Party

More than 25,000 people in Belgium have signed a petition denouncing a decision to remove the traditional Christmas tree in the central square in Brussels and replace it with a politically correct structure of abstract minimalist art.

Critics accuse the Socialist mayor, Freddy Thielemans, of declaring war on Christmas by installing the "multicultural" structure of lights to placate the city's burgeoning Muslim population.

Historically, a 20 meter [65 foot] fir tree taken from the forests of the Ardennes has adorned the city's main square, the Grand-Place. This year, however, it has been replaced with a 25 meter [82] foot new-age-like structure of lighted boxes (see video here). Moreover, the traditional Christmas Market in downtown Brussels is no longer being referred to as a "Christmas Market." Instead, it has been renamed as "Winter Pleasures 2012."

The mayor's office, where more than half of the city's eleven councilors are either Muslim or Socialist or both, said the structure was part of a theme this year of "light." City Councilor Philippe Close, a Socialist, said the aim was to show off the "avant-garde character" of Brussels by blending the modern and the traditional to produce something new and different. He added: "The Christmas tree is not a religious symbol and actually lots of Muslims have a Christmas tree at home."

The One-State Illusion

Israel does need a two-state solution, because the continuation of the conflict is wrecking the country

By NOAH MILLMAN

Every now and again, when the Israeli-Palestinian conflict looks particularly intractable and/or when the Israelis seem to be operating with particularly obtuse intransigence, someone will point out that Israel desperately needs a viable two-state solution, because the alternative is a one-state “solution” that ends the Zionist dream of a Jewish state (whatever a “Jewish state” might mean – and nobody seems to agree on what it does). Some even declare that a two-state solution is already impossible, and that the only remaining option is granting the Palestinian Arabs of the West Bank (and Gaza?) equal voting rights within a bi-national state.

It should be clear to people who say these things that a one-state “solution” is an illusion, and this kind of rhetoric amounts mostly to moral posturing on the part of critics. By “posturing” I don’t mean to impugn the moral stance of said critics – they may or may not have right on their side; that’s another question – but to suggest that this stance has little chance of actually affecting reality.

Allow me to explain why a one-state “solution” is not going to be implemented.

An Islamic Egypt Not So Inevitable Anymore?

The Muslim Brotherhood faces either a protracted battle for consolidation of its power or ultimately being ousted from power

By Jonathan Adelman

The rapid rise of Muslim Brotherhood to power in Egypt after the deposing of Hosni Mubarak last year prompted many observers to see an Islamist Egypt as inevitable. After all, the Muslim Brotherhood was the best organized and most popular political party in Egypt, the opposition was divided, there was little Western support for the secular opposition and the United States welcomed Muslim Brotherhood delegations to the White House and worked openly with President Mohammed Morsi to achieve a ceasefire in the Israel-Hamas War.

All this seemed to many to be a rough replay of the 1979 Iranian Revolution.
Yet, as the mass demonstrations against the Muslim Brotherhood recently in Tahrir Square and across Egypt have shown, an Islamic Egypt, while still likely, is far from inevitable.

Charismatic leaders with strong political intuition, like Mao, Lenin, Tito, Castro and Ayatollah Khomeini, usually lead successful revolutions. They personified their revolutions and inspired the masses to coalesce around their leadership.

Morsi is no Ayatollah Khomeini, a religious leader who embodied revolutionary mysticism in his a triumphant return to Tehran in 1979 after 14 years in exile. Morsi lacks charisma and spent his life pursuing a Ph.D. at USC and chairing an Egyptian engineering school until 2010. His abrupt and radical moves do not reflect an adroit understanding of what to do when faced with a crisis.

The Ayatollah returned to an Iran rich in oil and gas revenue and quickly expropriated the great wealth the Shah had accumulated. He used this financial leverage effectively. Morsi and the Brotherhood are stewards of a very poor country. Egypt's GNP is $80 billion and its stock market is valued at $40 billion, two measures of national wealth that, by comparison, are less than 1 percent of the United States.

The Collapse of the Entitlement State

The huge amounts of public spending that the entitlement spree entails are in turn at the root of the sovereign-debt crisis

By Fabio Rafael Fiallo

The redistributive reforms (or follies) of the 20th century were largely inspired by two leading economic thinkers: Karl Marx and John Maynard Keynes. Notwithstanding their ideological differences, they had one point in common: for both of them, income equalization serves to promote economic growth.

For Marx and his progeny, class struggle would lead to the demise of capitalism and to its replacement by a superior, egalitarian system (socialism) that would usher the human kind into a world characterized by the abundance of goods and services to be distributed according to each one's needs.

A similar correspondence between income equalization and economic efficiency formed part of Keynes' ideological paraphernalia. To combat recession, he argued, income should be redistributed among the poor - through hiring workers for public works. The rationale: the wealthy save more than the low-income classes, whereas what is needed at times of recession, Keynes added, is to reactivate aggregate demand (hence consumption) so as to induce firms to increase output and enlarge payroll.

The 20th century showed the limits, or rather, the failure, of both policy visions. Contrary to Marx's anticipation, the construction of the communist paradise turned out to be an economic fiasco and a political nightmare. Keynes' policy prescriptions, for their part, led to the "stagflation" debacle that nearly paralyzed the world economy in the 1970s.

In spite of such failures, the belief that income equalization enhances economic growth continues to pervade conventional wisdom. That belief lies behind the entitlement spree that advocates soaking the rich through taxation so as to give the State the means of promoting growth by reducing inequalities among social groups, regions and countries.

Lessons from our friends in the North

The secrets of the Nordic model that has appeared immune to the crisis engulfing the rest of Europe

By Alyson JK Bailes

The European Union’s southern member states – Greece, Italy, Spain and Portugal – have become the sick men of Europe, helping to turn the EU into one of the sicker regions of the world. In contrast, Denmark, Finland, Norway and Sweden have stood out by keeping much of their reputation and self-confidence intact, as well as retaining decent growth figures.

This has been achieved without swingeing budget cuts or reneging on social obligations. These countries still exhibit the combination of efficient production, high tax and high living standards that has been called a ‘third way’ or ‘Nordic model’ in the past, and which is now seizing attention again for its apparent crisis-busting properties.

The misfortunes of Iceland – the smallest Nordic country – arguably prove the rule. Under a series of centre-right governments it privatized most strategic sectors and let the banking industry expand practically free of regulation. These were deviations from the supposed Nordic model even if Icelandic social policies remained generous. In addition, Iceland’s adversarial political culture was and remains more American or British than Scandinavian in spirit: aggravating the risk of special interest groups manipulating policy, but also making it harder for the country to pull together in a crisis. 

Iceland aside, there is reason to ask what the Nordics may be doing right that the southern Europeans – and Irish – have got wrong. But how complete is this contrast? 

By their own reserved, consensus-loving standards, the Nordics have experienced major dramas since 2008. Denmark as well as Iceland saw landslides from Right to Left in post-crisis elections, producing governments that have struggled to maintain authority. In Sweden and Finland, new nationalist and anti-EU parties have achieved parliamentary representation. In Norway, the Breivik tragedy could hardly be blamed on the euro crisis, but it brought painful soul-searching over how a Norwegian could do such things and why the police responded so ineptly. 

In economic terms, too, the Nordics’ fast rebound after 2009 now shows signs of slowing. Swedish growth for instance fell from 5.7 per cent in 2010 to 4.2 per cent in 2011, while Finland and Denmark remained static. That Sweden became the first EU member to introduce a pro-growth budget in 2012 is noteworthy for the fact that its canny Finance Minister, Anders Borg, found it necessary.

Broken Promises

Pensions All Over America Are Being Savagely Cut Or Are Vanishing Completely

By Michael Snyder

How would you feel if you worked for a state or local government for 20 or 30 years only to have your pension slashed dramatically or taken away entirely?  Well, this exact scenario is playing out from coast to coast and in the years ahead millions of elderly Americans are going to be affected by broken promises and vanishing pensions. 

In the old days, things were much different. You would get hired by a big company or a government institution and you knew that the retirement benefits that they were promising you would be there when you retired in a few decades. Unfortunately, we have now arrived at a time when government institutions and big companies have promised far more than they are able to deliver, and "pension reform" has become one of the hot button issues all over the nation. 

Many Americans that have been basing their financial futures on their pensions are waking up one day and finding that their pensions are either gone or have been cut back dramatically.  According to Northwestern University Professor John Rauh, the latest estimate of the total amount of unfunded pension and healthcare obligations for state and local governments across the United States is 4.4 trillion dollars.  America is continually becoming a poorer nation and all of that money is simply not going to magically materialize somehow.  So where is that 4.4 trillion dollars going to come from?  Well, either pension benefits are going to have to be cut a lot more all over America or taxes will need to be raised dramatically.  Either way, we are all going to feel the pain of these broken promises.