Climategate 3.0?

Over and out

The anonymous leaker responsible for 'Climategate' and 'Climategate 2.0' has released an email which many believe will spark 'Climategate 3.0'

An anonymous leaker known as 'Mr. FOIA', who was responsible for bringing the 'Climategate' and 'Climategate 2.0' emails into the public domain, yesterday (March 12th) returned to release a new email to a number of high-profile climate skeptic bloggers.

The newly circulated email is said to contain a password to a cache of thousands of emails and makes the following request:

"To get the remaining scientifically (or otherwise) relevant emails out,  I ask you to pass this on to any motivated and responsible individuals who could volunteer some time to sift through the material for eventual release."

The original 'Climategate' affair began in 2009 with the hacking of a server at the Climatic Research Unit (CRU) at the University of East Anglia (UEA) and the release of thousands of emails and computer files.

The contents of the newest batch of emails is, as yet, unknown.

THE EMAIL AS REPORTED BY WATTSUPWITHTHAT

===========================================================

Subject:  FOIA 2013: the password

It’s time to tie up loose ends and dispel some of the speculation surrounding the Climategate affair.

Indeed, it’s singular “I” this time.  After certain career developments I can no longer use the papal plural ;-)

If this email seems slightly disjointed it’s probably my linguistic background and the problem of trying to address both the wider audience (I expect this will be partially reproduced sooner or later) and the email recipients (whom I haven’t decided yet on).

The “all.7z” password is [redacted]

DO NOT PUBLISH THE PASSWORD.  Quote other parts if you like.

Releasing the encrypted archive was a mere practicality.  I didn’t want to keep the emails lying around.

I prepared CG1 & 2 alone.  Even skimming through all 220.000 emails would have taken several more months of work in an increasingly unfavorable environment.

Dumping them all into the public domain would be the last resort.  Majority of the emails are irrelevant, some of them probably sensitive and socially damaging.

To get the remaining scientifically (or otherwise) relevant emails out,  I ask you to pass this on to any motivated and responsible individuals who could volunteer some time to sift through the material for eventual release.

The Coming Collapse of the Middle East?

The regions’s borders have long been artificial. The war in Iraq accelerated their demise.

By Fred Kaplan

On Feb. 26, 2003, President George W. Bush gave a speech at the American Enterprise Institute, spelling out what he saw as the link between freedom and security in the Middle East. “A liberated Iraq,” he said, “can show the power of freedom to transform that vital region” by serving “as a dramatic and inspiring example … for other nations in the region.”

He invaded Iraq three weeks later. The spread of freedom wasn’t the war’s driving motive, but it was considered an enticing side effect, and not just by Bush. His deputy secretary of defense, Paul Wolfowitz, had mused the previous fall that the spark ignited by regime-change “would be something quite significant for Iraq … It’s going to cast a very large shadow, starting with Syria and Iran, but across the whole Arab world.”

Ten years later, it’s clear that the Iraq war cast “a very large shadow” indeed, but it was a much darker shadow than the fantasists who ran American foreign policy back then foresaw. Bush believed that freedom was humanity’s natural state: Blow away the manhole-cover that a tyrant pressed down on his people, and freedom would gush forth like a geyser. Yet when Saddam Hussein was toppled, the main thing liberated was the blood hatred that decades of dictatorship had suppressed beneath the surface.

Bush had been warned. Two months before the invasion, during Super Bowl weekend, three prominent Iraqi exiles paid a visit to the Oval Office. They were grateful and excited about the coming military campaign, but at one point in the meeting they stressed that U.S. forces would have to tamp down the sectarian tensions that would certainly reignite between Sunnis and Shiites in the wake of Saddam’s toppling. Bush looked at the exiles as if they were speaking Martian. They spent much of their remaining time, explaining to him that Iraq had two kinds of Arabs, whose quarrels dated back centuries. Clearly, he’d never heard about this before.

Many of Bush’s advisers did know something about this, but not as much as anyone launching a war in Iraq, and thus overhauling the country’s entire political order, should have known.

It wasn’t rocket science; it was basic history. And to learn the history, they didn’t have to read vast, dry dossiers assembled by the CIA or the State Department (though that might have helped). There was just one book that would have told them, in this respect, everything they needed to know: David Fromkin’s 1989 best-seller, A Peace to End All Peace.

Subtitled “The Fall of the Ottoman Empire and the Creation of the Modern Middle East,” Fromkin’s book (still available in paperback) tells the tragic story of how, toward the end of World War I, British and French diplomats redrew the map of the Middle East in ways that were certain to sow violence for decades, perhaps centuries, to come.

Lars Hedegaard Champion of Free Speech

The 'Racist' and the Unknown Man

By mark steyn

My friend Lars Hedegaard is a dapper, courtly publisher and editor just turned 70. Like many Scandinavians, he speaks very evenly modulated English, but, insofar as I can tell, his Danish is no more excitable. A cultured, civilized fellow, he was for most of his life a man of the left, as are the majority of his compatriots, alas. But, as an historian and a chap who takes the long view, he concluded that Islam posed a profound challenge to Scandinavian liberalism. And so at a stroke he was transformed into a "right-winger."

The other day in Copenhagen, he answered his doorbell and found a man in his early twenties who appeared to be "a typical Muslim immigrant" pointing a gun at him. He fired from a yard away, and, amazingly, missed. The bullet whistled past Lars's ear, and the septuagenarian scholar then slugged his assailant. The man fired again, but the gun jammed, and, after some further tussling, the would-be assassin escaped. He has yet to be found.

The attempted murder of an "Islamophobe" is part of the scene in today's Europe. Among those targeted have been such obvious "right-wing extremists" as secular feminist Ayaan Hirsi Ali, gay hedonist Pim Fortuyn, and coke-snorting anti-monarchist Theo van Gogh. While I was in Copenhagen paying a visit to Lars's Danish Free Press Society, a young Chechen jihadist opposed to all this outrageous Islamophobia prematurely detonated while assembling his bomb in his hotel room, and we all had a good laugh. But sometimes, as on Lars's doorstep, the jihad wannabe is less incompetent and gets a little closer.

How does one report an assassination attempt on a writer for expressing his opinion? Most North American media didn't report it at all. The BBC announced, "Gunman Targets Islam Critic Hedegaard" — which is true, although one couldn't but notice that the Beeb and the Euro-press seemed far more interested in qualifying the victim's identity ("Islam critic") than in fleshing out the perp's. And then there were the Swedes. Across the water from Lars's home town, most prominent outlets picked up the story from the national news agency, TT, the local equivalent of the Associated Press. Here's how they began:

The cowed West strikes again

Governmental efforts in Europe to ensure a free flow of ideas in the public sphere remain woefully inadequate

By Lawrence J. Haas

Another attack on free speech. Another cowed governmental response. Another speaker in hiding. Another incident for the media to ignore.

Ah, just another day in the West.

The latest outrage comes from the city of Arnhem in the Netherlands, where a doctoral student who interviewed a group of teenaged Muslim-Turkish immigrants on TV about their Jew-hating, and challenged their views, is now in hiding at the suggestion of Arnhem’s mayor, Pauline Krikke.

Mehmet Sahin – a doctoral student and volunteer who attempts to re-educate street youths in Arnhem – interviewed the Dutch-Turkish youths last month on Nederland 2 TV. Upon hearing their hatred of Jews and admiration for Hitler, he called the boys “pathetic” and challenged them to think differently. The interview was later subtitled into English and went viral.

Once again, Western officialdom treats a free speech practitioner as less a hero than an irritant, sending the person into hiding for his “own sake,” thus encouraging future efforts to restrict free speech and perpetuating the West’s head-in-the-sand approach to a real problem. Once again, media attention to the incident – beyond, in this case, the Netherlands and the Jewish press – is confined largely to right-wing blogs and websites.

So, here’s an idea to alter this sickening cycle of intimidation and appeasement:

Rather than ship the victim off to hiding, the government in question should spend whatever it takes to protect the person – bodyguards, a bullet-proof car, and so on – and encourage the person to continue his or her public activities, making clear that free speech is a top governmental priority.

Flammable Ice

An Energy Coup for Japan

By HIROKO TABUCHI

Japan said Tuesday that it had extracted gas from offshore deposits of methane hydrate — sometimes called “flammable ice” — a breakthrough that officials and experts said could be a step toward tapping a promising but still little-understood energy source.

The gas, whose extraction from the undersea hydrate reservoir was thought to be a world first, could provide an alternative source of energy to known oil and gas reserves. That could be crucial especially for Japan, which is the world’s biggest importer of liquefied natural gas and is engaged in a public debate about whether to resume the country’s heavy reliance on nuclear power.

Experts estimate that the carbon found in gas hydrates worldwide totals at least twice the amount of carbon in all of the earth’s other fossil fuels, making it a potential game-changer for energy-poor countries like Japan. Researchers had already successfully extracted gas from onshore methane hydrate reservoirs, but not from beneath the seabed, where much of the world’s deposits are thought to lie.

The exact properties of undersea hydrates and how they might affect the environment are still poorly understood, given that methane is a greenhouse gas. Japan has invested hundreds of millions of dollars since the early 2000s to explore offshore methane hydrate reserves in both the Pacific and the Sea of Japan.

That task has become all the more pressing after the Fukushima Daiichi nuclear crisis, which has all but halted Japan’s nuclear energy program and caused a sharp increase in the country’s fossil fuel imports. Japan’s rising energy bill has weighed heavily on its economy, helping to push it to a trade deficit and reducing the benefits of the recently weaker yen to Japanese exporters.

The Japanese Ministry of Economy, Trade and Industry said a team aboard the scientific drilling ship Chikyu had started a trial extraction of gas from a layer of methane hydrates about 300 meters, or 1,000 feet, below the seabed Tuesday morning. The ship has been drilling since January in an area of the Pacific about 1,000 meters deep and 80 kilometers, or 50 miles, south of the Atsumi Peninsula in central Japan.

The War on Terror Is Over and China Won

We were quite content to see the Americans being drawn into the mess in the Middle East in the name of fighting terrorism

By LEON HADAR

Imagine 40 years from now how a global affairs columnist for the Fox-Xinhua (or New Shanghai Times) content-providing service will analyze the world’s geo-strategic and geo-economic balance of power. This might be the way he or she recalls the visit that China’s former president Hu Jintao made in April 2006 to Washington, the capital of what was then known as the “United States.”

“Now in 2046, the city is a major tourist attraction for Chinese and Indian tourists, many of whom stay at the seven-star hotel previously known as the “White House” (the Lincoln Suite is the most expensive).

He or she (cloned in 2011) might write the following:

“As I downloaded news reports that were published in the American media on that week, what really astonished me was the extent to which President Hu’s first visit to the then U.S. capital since becoming China’s paramount leader had received so little attention in the American press. The headlines in the New York Times and the Washington Post (both of which have since been bought by our parent company) were devoted to U.S. efforts to prevent Iran from gaining access to nuclear military capability — Iran conducted its first nuclear test two years later and is now a leading nuclear military power — and to the violence in what was known then as ‘Iraq’ (now divided between Turkey, Iran, and the Syrian Federation) and was still occupied by the U.S. (which withdrew from there two years later).

“And believe it or not, much of the media coverage on the eve of the visit was focused on the refusal of the Americans to call Mr. Hu’s trip to Washington a ‘state visit’ (as the Chinese had requested).

“Indeed, in retrospect it does seem quite incredible that the nation that was the global superpower of that period seemed to have ignored China’s dramatic rise in economic, political, military, and cultural power while devoting almost its entire resources to trying to achieve regime changes and implant democracy in the Middle East.

“During the first term of the presidency of George W. Bush (whose nephew George P. Bush is now the president of the Florida-Cuba Federation), he and his aides saw China as a ‘strategic competitor’ (the Pentagon) and as an important trade partner (corporate America), and committed themselves to place the relationship with Beijing at the top of Washington’s global agenda.

“But the terrorist attacks on New York and Washington on Sept. 11, 2001, resulted in the bumping of China to the diplomatic back-burner.

Keynes' fall of Singapore

The Battle of Bretton Woods

By Martin Hutchinson 

Benn Steil's excellent new study, The Battle of Bretton Woods (Princeton, 2013), focuses on the 1944 global monetary conference as a struggle between its two principal protagonists, the US Treasury's Harry Dexter White and Britain's celebrity economist, Maynard Lord Keynes. 

Even Steil, an American who has considerable sympathy with Keynes, is quite clear that he lost, playing a bad hand poorly. To this British-born columnist with less sympathy for Keynes' bizarre economic beliefs, his Bretton Woods performance was not merely a defeat, it was a historic disaster of the order of the Fall of Singapore two years earlier, in which Lieutenant-General Arthur Percival, in spite of having more men and better equipment than his Japanese attackers, surrendered supinely within a few weeks, in the largest capitulation in British history. Keynes' failure at Bretton Woods was equally unforgiveable, and for British long-term interests even more damaging. 

Britain went into the Bretton Woods negotiations with an unfounded belief in the goodwill of Franklin Roosevelt's administration. Churchill had, a few years earlier, described the US Lend-Lease arrangements as "the most unsordid act in the whole of recorded history" - an unwarranted compliment, though one which could reasonably be applied to the Marshall Plan - under a different president, with different protagonists, and when the socialist spendthrift Britain's case for favorable treatment was far less compelling. In reality the Lend-Lease arrangements of 1940-41 were designed to leave Britain as close to insolvency as possible while she wore out her economy and people in a life-and-death struggle that had little relevance to particular British interests. 

Keynes himself had been notably uninvolved in the British economic successes of the 1930s, which contrasted so severely with US failures of that decade, but had been brought back into influence only at the outbreak of war, when Chamberlain's pacific free-market approach to Britain's needs seemed discredited. 

He was philosophically opposed to the centerpiece of British 1930s policy, the Imperial Preference agreements of 1932, which had finally ended the unilateral trade disarmament of 1846-1932 and imposed a modest 10% tariff on imports to the Empire and dominions to combat the tariffs of 50% and more imposed by Britain's trading partners, notably the United States under the 1930 Smoot-Hawley tariff. 

Keynes was also philosophically opposed to private-sector bankers, refusing to negotiate a possible post-war loan with Wall Street, which would have greatly increased his bargaining power at Bretton Woods. He apparently failed to perceive that Britain's interests coincided in many respects with Wall Street's, since both groups wanted to avoid a post-war financial system dominated by the public sector bureaucrats of Washington. 

How Capitalism Saved Chile

An anti-Pinochet film Milton Friedman might have loved—teaches us about regime change

By LEON HADAR
Driven by the wishful thinking that the political Zeitgeist is moving in their direction, pundits on the right sometimes project their own ideological leanings onto new movies or television shows, celebrating their supposedly libertarian or conservative orientation. They seem to believe, notwithstanding a director’s stated liberal views, deep inside he or she is actually a believer in the power of free markets or traditional cultural values.

Hence, while I enjoyed seeing “Avatar” in 3D, I found it difficult to buy into the notion promoted by some libertarians that the film provided a powerful defense of property rights. What I saw was what the director intended the movie to be, I think: a fierce attack on corporate power and a salute to third world indigenous politics with a strong anti-Western bias.

So I will refrain from labeling the new Chilean movie “No” a libertarian masterpiece or implying that its director, Pablo Larrain, is a secret fan of Friedrich Hayek. But then, the main protagonist in this film is an advertising executive who unlike his counterparts in “Mad Men” is portrayed as an agent of progress, one who not only wins a battle against a bunch of aging Marxists but who also leads a marketing campaign—celebrating individual freedom and the joys of consumer society—that helps topple a military dictator and give birth to a thriving liberal-democracy. So if Jean-Jacques Rousseau would have loved “Avatar,” my guess is that Milton Friedman would have probably enjoyed “No.”
“No” is one of those docudramas that, not unlike “Zero Dark Thirty,” “Argo,” and “Lincoln,” was “inspired” by real events, which means it combines truth with fiction. In this case, the truth is the national plebiscite that took place in Chile in 1988, in which voters were asked to decide whether military dictator Augusto Pinochet should stay in power for another eight years (a “Yes” vote) or whether there should be an open presidential election a year later (the result of a “No” vote).
It is also true that a marketing team employed by the anti-Pinochet coalition produced commercials to encourage the Chileans to vote “No” and that the ads ran during the 27 days of the campaign in which each side had 15 minutes to present their position nightly on state-run television.
But “Rene Saavedra,” the character of the advertising executive in the film, played by Gael Garcia Bernal (who starred as a young Che Guevara in “The Motorcyle Diaries“) is a composite of members of the pro-“No” advertising group. Which means that his personal story is fiction, although the director’s decision to shoot the film on low-definition tape used by television news crews in Chile in the 1980s creates a sense that we are watching a documentary from that era.
The apolitical Saavedra works for an ad agency making commercials for Chilean soap operas and Coca-Cola, raising a son on his own. When his left-leaning activist wife gets beaten up by police during anti-government demonstrations, Saavedra is approached by a member of the opposition who asks him to help run their campaign.

Going South

They've helped bail out southern weaklings. Now Europe's northern countries may be doomed too.

BY MOHAMED A. EL-ERIAN 

How about this for irony: Remember the solid, strong economies of Northern Europe, the ones that signed up for one bailout after another of their less well-off brethren to the south? Remember how, together with the guiding hand of the European Central Bank (ECB), they pulled the eurozone back from the brink of disaster? Not so fast. Now it's their turn to feel economic pressure, meaning they could soon risk going from being part of the solution to being part of the problem. That should be of interest to markets around the world.

This is exactly what's happening in Europe today. And it speaks to a phenomenon captured brilliantly decades ago by John Maynard Keynes, the famous British economist, who observed: "If you owe your bank a hundred pounds, you have a problem. But if you owe a million, it has."

At the outset of the eurozone debt crisis more than three years ago, everyone looked to a group of AAA-rated countries (Austria, Finland, France, Germany, Luxembourg, and the Netherlands) to anchor the European ship and throw life preservers to the struggling peripheral countries (initially Greece, Ireland, and Portugal). Their intervention was to be surgical, temporary, and reversible. They were to commit to direct lending, and they were to support additional funding from regional organizations like the ECB. And they were to do so combined with cleverly designed incentives to encourage the weaker countries to reform and, so the plan went, regain economic and financial strength.

That was, at least, the widely telegraphed intention, one that was critical to securing sufficient political and popular buy-in among the skeptical citizens of Germany and its rich neighbors. Three years later, the reality is different.

Although you might not know it from reading the newspapers, the situation in Europe remains worryingly fragile. Yes, financial markets have been calmed substantially by the "whatever-it-takes" commitment of the ECB. But underlying economic conditions continue to deteriorate at a worrisome pace. Every month Europe's stronger economies are getting pulled deeper and deeper into a crisis they neither can control nor have fully explained to their citizens.

In the coming months, Germany and others will feel forced yet again to make additional loans -- this time knowing that they will not be repaid in full. They will see their economies disrupted by a more generalized slowdown in the European trading bloc. And when these events inevitably collide, the underpinnings of the current regional economic integration, including the effectiveness and credibility of the European Union itself, will again be at risk.

What Bill Gates Got Wrong About Why Nations Fail

Did the Microsoft founder even read our book before he criticized it?

BY DARON ACEMOGLU , JAMES ROBINSON 

Our recent book, Why Nations Fail: The Origins of Power, Prosperity, and Poverty, received the harshest reviews from those who see geography and culture as the root causes of poverty, and enlightened leaders -- or even more enlightened outside donors and organizations -- as the keys to economic development. Perhaps unsurprisingly, given his dedication to international aid, billionaire foundation chief Bill Gates falls into this category: His Feb. 26 review of our book was particularly uncharitable. Unfortunately, however, it was also dead wrong on many counts.

Gates's review is disappointing, but not just because he disagrees with us. As academics, we expect that. Research is all about arguing and contradicting, finding new pieces of evidence, developing new concepts and perspectives, and getting closer to the truth. Alas, Gates fails in this endeavor. His inability to understand even the most rudimentary parts of our thesis means that his review fails to invite constructive argument. Nonetheless, we feel compelled to respond because of the undue attention the review has generated.

To start with, Gates makes some pretty baffling statements about our book, such as his assertion that "important terms aren't really defined." Actually, all of the major concepts we use in the book are defined; one just needs to read the book. Other assertions demonstrate not only that Gates is unfamiliar with the academic literature, which is understandable, but that he actually did not bother to consult the bibliographic essay and the references at the end. He writes, "The authors ... attribute the decline of Venice to a reduction in the inclusiveness of its institutions. The fact is, Venice declined because competition came along ... Even if Venice had managed to preserve the inclusiveness of their institutions, it would not have made up for their loss of the spice trade."

This is just bad history. Venice didn't decline because of the loss of the spice trade. If that were the case, the decline should have started at the very end of the 15th century. But the decline was already well underway by the middle of the 14th century. More generally, research by Diego Puga and Daniel Trefler shows that Venice's fortunes had nothing to do with competition or the spice trade.

Likewise, Gates seems to think that the Maya declined because of the "weather." Though there is certainly scholarly dispute over why Maya civilization decayed, to our knowledge no reputable scholar argues that it was due to the weather. Instead, most scholars emphasize the role of inter-city warfare and the collapse of Mayan political institutions. Nor does the book, as Gates would have it, "overlook the incredible period of growth and innovation in China between 800 and 1400." We discuss that period, and explain why it didn't translate into sustained economic growth (see Chapter 8, in particular, pp. 231-234).

Intellectuals and Race

Street corner demagogue nonsense

By Thomas Sowell

There are so many fallacies about race that it would be hard to say which is the most ridiculous. However, one fallacy behind many other fallacies is the notion that there is something unusual about different races being unequally represented in various institutions, careers or at different income or achievement levels.

A hundred years ago, the fact that people from different racial backgrounds had very different rates of success in education, in the economy and in other endeavors, was taken as proof that some races were genetically superior to others.

Some races were considered to be so genetically inferior that eugenics was proposed to reduce their reproduction, and Francis Galton urged "the gradual extinction of an inferior race."

It was not a bunch of fringe cranks who said things like this. Many held Ph.D.s from the leading universities, taught at the leading universities and were internationally renowned.

Presidents of Stanford University and of MIT were among the many academic advocates of theories of racial inferiority -- applied mostly to people from Eastern and Southern Europe, since it was just blithely assumed in passing that blacks were inferior.

This was not a left-right issue. The leading crusaders for theories of genetic superiority and inferiority were iconic figures on the left, on both sides of the Atlantic.

John Maynard Keynes helped create the Cambridge Eugenics Society. Fabian socialist intellectuals H.G. Wells and George Bernard Shaw were among many other leftist supporters of eugenics.

It was much the same story on this side of the Atlantic. President Woodrow Wilson, like many other Progressives, was solidly behind notions of racial superiority and inferiority. He showed the movie "Birth of a Nation," glorifying the Ku Klux Klan, at the White House, and invited various dignitaries to view it with him.

Such views dominated the first two decades of the 20th century. Now fast forward to the last few decades of the 20th century. The political left of this era was now on the opposite end of the spectrum on racial issues. Yet they too regarded differences in outcomes among racial and ethnic groups as something unusual, calling for some single, sweeping explanation.

Global outlook rosy; Europe's outlook grim

We are copying the Ming empire

By Matt Ridley
A "rational optimist" like me thinks the world will go on getting better for most people at a record rate, not because I have a temperamental or ideological bent to good cheer but because of the data. Poverty, hunger, population growth rates, inequality, and mortality from violence, disease and weather - all continue to plummet on a global scale.

But a global optimist can still be a regional pessimist. When asked what I am pessimistic about, I usually reply: bureaucracy and superstition. Using those two tools, we Europeans seem intent on making our future as bad as we can. Like mandarins at the court of the Ming emperors or viziers at the court of Abbasid caliphs, our masters seem determined to turn relative into absolute decline. It is entirely possible that ten years from now the world as a whole will be 50 per cent richer, but Europeans will be 50 per cent poorer.

Not that the world economy is a zero-sum game. It is a good thing if Africans and Latin Americans join Asians in getting richer at breakneck pace, as many now seem to be doing, even if we don't join in: not only because want and misery are bad whoever they happen to, but also because if others grow productive and inventive they can supply us with valuable goods and services. Why should the development of new antibiotics or thorium nuclear power remain a burden exclusively on the shoulders of Western taxpayers?

Even so, relative decline can be painful. Spanish people are richer and live longer than when their silver-sated conquistador ancestors strutted the European stage, but I am sure it does not feel like it to an unemployed youth in Bilbao. Whatever happens, we Europeans will probably have to get used to watching Asians book the best restaurants and launch the biggest aircraft carriers in the years ahead.

Absolute decline is far more scary. If Europe cannot rediscover how to grow its economy, then it will have to default on its vast debts, either directly or by inflation. Either way savers will be poorer, tax receipts will be lower and spending on schools and hospitals and roads will be lower: genuine austerity.

As the MP Douglas Carswell reminds us in his book The End of Politics, here in Britain we have public and private debts that are five times our annual economic output; we are spending £46 out of every £100 we earn to buy government - a product that, unlike most, delivers less output for more cost each year. As the Ming empire found out, the more government you buy, the less economic activity you get. A Fujian travelling salesman in 1400 was enmeshed in such a tangled bureaucracy that he could neither travel nor sell without bribes and permits, and he had to submit a monthly inventory of his stocks to the emperor.

Sound familiar? Every small businessman I talk to these days has a horror story to tell about the delays and costs that have been visited upon him by planners, inspectors, officials and consultees. Using the excuse of "cuts", the bureaucracy is taking even longer to make decisions than five years ago. In the time it has taken Britain's Government to decide whether to allow a fifth exploratory shale gas well to be drilled in Lancashire, and from the same standing start, the same investors have drilled 72 producing wells in Argentina. That the country of Watt and Stephenson should look a potential cheap-energy gift horse in the mouth in this way is staggering to this jaded optimist.

Green Cars Have a Dirty Little Secret

Producing and charging electric cars means heavy carbon-dioxide emissions

By Bjorn Lomborg

Electric cars are promoted as the chic harbinger of an environmentally benign future. Ads assure us of "zero emissions," and President Obama has promised a million on the road by 2015. With sales for 2012 coming in at about 50,000, that million-car figure is a pipe dream. Consumers remain wary of the cars' limited range, higher price and the logistics of battery-charging. But for those who do own an electric car, at least there is the consolation that it's truly green, right? Not really.

For proponents such as the actor and activist Leonardo DiCaprio, the main argument is that their electric cars—whether it's a $100,000 Fisker Karma (Mr. DiCaprio's ride) or a $28,000 Nissan Leaf—don't contribute to global warming. And, sure, electric cars don't emit carbon-dioxide on the road. But the energy used for their manufacture and continual battery charges certainly does—far more than most people realize.

A 2012 comprehensive life-cycle analysis in Journal of Industrial Ecology shows that almost half the lifetime carbon-dioxide emissions from an electric car come from the energy used to produce the car, especially the battery. The mining of lithium, for instance, is a less than green activity. By contrast, the manufacture of a gas-powered car accounts for 17% of its lifetime carbon-dioxide emissions. When an electric car rolls off the production line, it has already been responsible for 30,000 pounds of carbon-dioxide emission. The amount for making a conventional car: 14,000 pounds.

While electric-car owners may cruise around feeling virtuous, they still recharge using electricity overwhelmingly produced with fossil fuels. Thus, the life-cycle analysis shows that for every mile driven, the average electric car indirectly emits about six ounces of carbon-dioxide. This is still a lot better than a similar-size conventional car, which emits about 12 ounces per mile. But remember, the production of the electric car has already resulted in sizeable emissions—the equivalent of 80,000 miles of travel in the vehicle.

So unless the electric car is driven a lot, it will never get ahead environmentally. And that turns out to be a challenge. Consider the Nissan Leaf. It has only a 73-mile range per charge. Drivers attempting long road trips, as in one BBC test drive, have reported that recharging takes so long that the average speed is close to six miles per hour—a bit faster than your average jogger.

Keeping tribes in cultural formaldehyde

India’s Supreme Court is right to reject a Western-led bid to keep the Jarawa people isolated from everybody else

by Patrick Hayes 

Why would a UK national newspaper join forces with a Western campaign group to try to close a road thousands of miles away on a small Indian archipelago, the Andaman Islands – a road which allows over 100,000 people to access vital medical services?

For the 105,000 residents of the North and Middle Andaman districts, spread over 400 villages from Diglipur to Baratang, the Great Andaman Trunk Road provides indispensable access to the islands’ capital, Port Blair. The road, which opened in the 1980s, is a vital trade and communications route for locals, and crucially allows them to make road journeys to the only government hospital on the island. Without the road, many such journeys would have to be made by sea instead.

But the wishes of tens of thousands of local inhabitants pale in comparison to those of London-based campaign group Survival International (SI) and the Observer newspaper. As the self-appointed guardians of the ancient Jarawa tribe, thought now to number between 250 and 400 people, SI and the Observer complain that the road passes through the Jarawa tribal reserve.

The Jarawa reserve is over 1,000 square kilometres - over 12 per cent of the land area of the Andaman and Nicobar Islands, despite Jarawa making up a mere 0.1 per cent of the island’s population. Since the opening of the road, many Jarawa have chosen to cluster around it, receiving gifts and food from the locals. This has led to some unsavoury incidents, one of which was recorded on video when an off-duty local policeman was filmed goading Jarawa tribeswomen to dance for food to please visiting tourists (reported in the Observer last year).

In January this year, the Indian Supreme Court responded to what the Observer dubbed ‘domestic and international pressure’ and partially closed the Andaman Trunk Road, preventing any tourists from accessing the area. Traffic levels reportedly fell by two thirds; even before that, only eight convoys of cars were permitted to pass through each day. The Observer, which had written a series of campaigning articles supporting the closure of the road, gushed: ‘For the first time in a generation, members of the tribe are able to wander through their jungle safe from the prying eyes of the tens of thousands of tourists who travel to the islands in the Bay of Bengal every year to view them.’ SI, meanwhile, hailed the decision to partially close the road as a ‘victory’.

Bizarre Lagardonomics

The Joys of Inflation – Apparently No-One is Safe

Hello everyone, listen up, I had this really splendid idea …

by Pater Tenebrarum

If the papers and sell-side analysts can call the inflationism propagated by Shinzo Abe 'Abenomics', we feel free to call similar policy proposal from the IMF's Mrs. Lagarde 'Lagardonomics'. If we have a free-for-all in which everybody gets to make up his own economic laws on the go, we should probably make clear that this is the situation now.
Mrs. Lagarde heads a vast bureaucracy that would not even exist in an unhampered free market economy and frequently pipes up with her latest epiphanies. She has done so once again last week by making her most recent recommendation for euro area monetary policy public. It is based on the absurd theory (occasionally seen propagated in the editorial pages of the Financial Times, which is per se proof positive of its quackery status) that the best way to make the situation in euro-land as a whole better, is to make the situation in Germany worse.

According to a Reuters report:

“The euro zone may need higher inflation in countries like Germany and lower interest rates across the bloc to ensure a sustained economic recovery brings palpable benefits, the head of the IMF said on Friday.

Speaking during a visit to bailed-out Ireland, Christine Lagarde said while Europe had come a long way since last summer and financial anxieties have eased somewhat, more needed to be done to deal with "depressingly familiar" underlying issues.

Reiterating a call in January for the European Central Bank to keep its monetary policy easy, the former French finance minister said there was room for a further cut after Frankfurt kept rates at 0.75 percent this week.

"Monetary policy should remain accommodative, and we believe that there is still some limited room for the ECB to cut rates further," Lagarde said in remarks prepared for a speech delivered in front of an audience that included Ireland's representative on the ECB governing council, Patrick Honohan.

"Restoring a sense of balance means lower inflation and wage growth in the south (of the euro zone), but it also might mean allowing somewhat higher inflation and wage growth in countries like Germany. This too is an aspect of pan European solidarity."

The Global Endgame

Is pushing consequence forward the same as eliminating consequence? We will find out at some point in the near future.

by Charles Smith

This chart of the modern credit cycle, which examines the Cycle of Deflation through the lens of financialization:

The key point is that the entire global economy is in the final stages of the "winter" cycle of credit destruction and collapse of phantom collateral. 

Let's start with the 14 points:

1. "Boost Phase" of Credit Expansion 2. Overextended Credit Expansion and Over Capacity 3. Financialization and Collateral 4. Era of Financialization 5. Growing Malinvestment 6. Phantom Collateral from Asset Bubbles 7. Bubble Implosions 8. Impaired Debt and Policy Decisions 9. Stalled Consumption 10. Cheap Money Offered 11. Shrinking Loans and Bank Speculation 12. Search for Yield from Shrinking Pool of Productive Assets 13. Increasingly Speculative Investments with high Risk 14. Stagnation: Over-indebted, overcapacity with limited growth

The key dynamics here are debt saturation and diminishing returns: 

piling on more debt (i.e. borrowing more money) to stimulate spending only leads to fantastic excesses of speculation and mal-investment: $70,000 biopsies, $200 million fighter aircraft, $200,000 bachelor's degrees, McMansions in the middle of nowhere, and so on.

The actual yield on all that borrowed money keep falling: ever-larger sums are borrowed and spent, but there are fewer jobs created and ever-diminishing returns of value created.

Even though central banks are holding interest rates near zero to enable governments to borrow vast sums, substituting debt expansion for actual value creation eventually leads to debt-serfdom as interest payments start crowding out all other spending.

All too soon governments and households alike are borrowing more just to pay the interest on the mountain of existing debt. This is the inevitable result of incentivizing credit expansion and speculation.

The central banks are attempting to nullify the cycle of credit expansion and destruction by buying much of the sovereign debt being issued by profligate, hopelessly insolvent governments. Left to the open market, interest rates would rise as the risk of massive debt expansion becomes undeniable.

Eventually, higher rates would pinch off borrowing or trigger default.

The central banks are playing an unprecedented game: suppressing interest rates by expanding their balance sheets, i.e. creating money, and buying vast quantities of government bonds.

This has given government leaders a free hand to keep borrowing more to avoid any politically painful limits on substituting debt for tax revenues. The expansion of central bank balance sheets is apparently painless and apparently consequence-free. So what if the Fed expands its balance sheet from $3 trillion to $30 trillion as it enables the debt-junkies to keep borrowing without limits?

Is pushing consequence forward the same as eliminating consequence? We will find out at some point in the near future: perhaps 2015, perhaps 2021. 

How Social Darwinism Made Modern China

A thousand years of meritocracy shaped the Middle Kingdom

By RON UNZ

During the three decades following Deng Xiaoping’s 1978 reforms, China achieved the fastest sustained rate of economic growth in human history, with the resulting 40-fold rise in the size of China’s economy leaving it poised to surpass America’s as the largest in the world. A billion ordinary Han Chinese have lifted themselves economically from oxen and bicycles to the verge of automobiles within a single generation.

China’s academic performance has been just as stunning. The 2009 Program for International Student Assessment (PISA) tests placed gigantic Shanghai—a megalopolis of 15 million—at the absolute top of world student achievement.¹ PISA results from the rest of the country have been nearly as impressive, with the average scores of hundreds of millions of provincial Chinese—mostly from rural families with annual incomes below $2,000—matching or exceeding those of Europe’s most advanced and successful countries, such as Germany, France, and Switzerland, and ranking well above America’s results.²

These successes follow closely on the heels of a previous generation of similar economic and technological gains for several much smaller Chinese-ancestry countries in that same part of the world, such as Taiwan, Hong Kong, and Singapore, and the great academic and socioeconomic success of small Chinese-descended minority populations in predominantly white nations, including America, Canada, and Australia. The children of the Yellow Emperor seem destined to play an enormous role in Mankind’s future.

Although these developments might have shocked Westerners of the mid-20th Century—when China was best known for its terrible poverty and Maoist revolutionary fanaticism—they would have seemed far less unexpected to our leading thinkers of 100 years ago, many of whom prophesied that the Middle Kingdom would eventually regain its ranking among the foremost nations of the world. This was certainly the expectation of A.E. Ross, one of America’s greatest early sociologists, whose book The Changing Chinese looked past the destitution, misery, and corruption of the China of his day to a future modernized China perhaps on a technological par with America and the leading European nations. Ross’s views were widely echoed by public intellectuals such as Lothrop Stoddard, who foresaw China’s probable awakening from centuries of inward-looking slumber as a looming challenge to the worldwide hegemony long enjoyed by the various European-descended nations.

It’s Not John McCain’s GOP Anymore

By PATRICK J. BUCHANAN
Last Wednesday, Sen. Rand Paul rose on the Senate floor to declare a filibuster and pledge he would not sit down until either he could speak no longer or got an answer to his question about Barack Obama’s war powers.
Does the president, Paul demanded to know, in the absence of an imminent threat, have the right to order U.S. citizens killed by drone strike on U.S. soil?
By the time he sat down, 13 hours later, Paul had advanced to the front rank of candidates for 2016, and established himself as a foreign policy leader whose views must be consulted equally with those of John McCain.
How did he pull this off?
First, Attorney General Eric Holder arrogantly refused to rule out the possibility that President Obama could order execution by drone-strike of U.S. citizens, even here in the United States.
When Rand demanded to know what Holder was talking about, all across America people tuned in.
Here was a deadly serious issue: had we, in our determination to prosecute the war on terror ferociously, begun to sacrifice our constitutionalist rights?
Libertarians, conservatives, and liberals have all grown alarmed at the steady expansion of drone attacks from the Af-Pak to Yemen and Somalia and Lord knows where else, and from bin Laden jihadists in Afghanistan to Islamist propagandists like Anwar al Awlaki and his 16-year-old son, both U.S. citizens, in Yemen.
Whom do we have a right to kill? Americans are asking. What are the borders of the battlefield upon which we may designate an individual an enemy and kill him without warning?
Has America become part of that battlefield? Paul asked.