The IMF and Greece

'Serious Errors' and 'Crying Need'

Christine Lagarde, indicating what she thinks of the IMF's rulebook. Overruled by 'crying need'.

by Pater Tenebrarum

Someone at the IMF has leaked a a document marked 'strictly confidential' to the press, which contains an internal critique of how the IMF handled the bailout of Greece. In spite of admitting to breaking the institution's own rules, the IMF's bureaucrats insist that of they 'had to do it all over again', they would break them again. This is how bureaucracies in regulatory democracies generally act. Laws and rules are not meant to be followed in 'emergencies', both real and imagined ones. In the end, no-one is ever punished for breaking the law or skirting regulations. However, that is not even the main problem in this particular case. Let us also leave aside for the moment that a free unhampered market economy using a market-chosen money would have no use for an institution like the IMF at all. Here is a summary of the recent revelations: 

“In an internal document marked "strictly confidential," the IMF said it badly underestimated the damage that its prescriptions of austerity would do to Greece's economy, which has been mired in recession for the last six years.

The IMF conceded that it bent its own rules to make Greece's burgeoning debt seem sustainable and that, in retrospect, the country failed on three of its four criteria to qualify for aid.

But the fund also stressed that the response to the crisis, coordinated with the European Union, bought time to limit the fallout for the rest of the 17-nation euro area. And while IMF officials said the lessons learned would lead them to take a tougher stance in future bailouts, they also said that there was little else the fund could have done at the time.

Gushing about America’s Energy Future

A triumph of market forces rather than government planning

By Desmond Lachman

In November, the International Energy Agency (IEA) recognized the remarkably positive developments in the U.S. energy sector of the past few years. Not only did the IEA project that U.S. oil production would exceed that of Saudi Arabia by 2020, it also projected that the United States would become virtually energy independent by 2035. However, what the IEA did not do was emphasize how much of this good news has occurred as the result of market forces rather than government planning aimed at securing energy independence.

The IEA is now projecting that U.S. oil production will increase markedly to over 11 million barrels a day by 2020. That should allow U.S. oil imports to decline to 4 million barrels a day from their present level of around 10 million barrels a day. The IEA is also forecasting that the United States will become a major natural gas exporter over the next few years.

Whether or not the IEA’s bold projections materialize, there can be little doubt that major change is underway in the U.S. energy sector. At the start of the Obama administration in January 2009, the expectation was that U.S. oil production would continue its decline of the past two decades and that oil imports would continue to increase. Instead, there has been a veritable boom in U.S. oil and gas production that has already significantly reduced U.S. energy import dependence.

Since 2008, U.S. oil production has increased by around 25 percent. This has facilitated a reduction in oil imports as a share of U.S. oil consumption from 60 percent in 2005 to around 42 percent at present. More dramatically yet, the United States has now overtaken Russia as the world’s largest natural gas producer, as a result of a boom in shale gas production. In less than a decade, shale gas production has increased from 2 percent of U.S. natural gas production to around 37 percent at present.

Energy independence has been a foreign policy goal of successive U.S. administrations since President Nixon set that goal in 1973 in response to a major Middle Eastern oil supply disruption that followed the Yom Kippur War. However, over the past four years, the turnaround in the U.S. energy sector toward virtual energy independence has been driven by market-related phenomena rather than by the implementation of a national energy plan.

Civilization and the War on Entropy

When we finally escape every need we have for cities, it will mean we’ve also finally escaped our need for civilization

by DREW AUSTIN 

“The ‘abstract’ and the ‘concrete’ from now on would have lives of their own, participating in a perpetual ballroom dance where partners are exchanged promiscuously according to design.”

                                        -Sanford Kwinter

Two threads of discourse dominated twentieth-century urbanism in the United States: the Jane Jacobs-Robert Moses dichotomy and the rise of the suburbs. The former was fundamentally a question of power. Should hyperintelligent master planners decide how cities develop, or should more agency remain at the block level, in the hands of city-dwellers themselves? The questions of how cities should function and whether they should favor vibrant street life or big business, infrastructural megaprojects and automobile throughput all followed from that primary question of power.

The suburbanization debate was slightly more one-sided and, as the trend intensified, the discussion assumed a more urgent tone. The car-dependent developments that exploded on the urban peripheries after World War II not only had their own serious social, environmental, and aesthetic problems, but they were undermining the central cities themselves by draining their residents, money, and cultural vitality without offering a satisfactory replacement. A long list of essential urbanist texts supports the argument against conventional suburbia, with few convincing rebuttals in favor of the trend.

By the 1990s, cities started making a comeback and the sense of urgency about solving the problems of suburbanization began to wane ever so slightly. It became easier for urbanists to ignore the difficult periphery and focus on the city—the Jacobs-Moses question—once again. Many continue to ponder the recent revitalization of American cities, a phenomenon exemplified by New York’s transformation into the tourist-friendly Giuliani/Bloomberg project that by now has fully matured and proven itself a model for smaller cities to emulate. Ed Glaeser and Richard Florida, among others, have made careers on explaining this phenomenon, flawed though their accounts may be. The suburban threat to the continued existence of cities had subsided—cities were back—but a nascent phenomenon had by then raised fresh doubts about the abiding need for classical urban space: the internet.

French Are Clueless About the Economy

For the past 10 years, France has had one of the highest levels of public spending in the world

By Judith Sloan

I'VE made the point before - I have a fraught relationship with France. What's not to love about boeuf bourguignon, the Riviera and Sancerre white wine? And how good are tarte tatin, the Musee D'Orsay and Carcasonne? (OK, Carcasonne is a bit tacky these days.)

But when it comes to running an economy, let's face it, the French have no bleedin' idea.

Let me pose this question: when did the French government last run a budget surplus? Here's a hint: Wyatt Roy's parents were still at school and probably didn't know each other. The answer is 1974-75.

But, boy, do they know how to run budget deficits, as the chart shows. Deficits in excess of 3 per cent of GDP are common. More recently, we have seen budget deficits above 7 per cent of GDP. The government sector in France accounts for more than half of total output and government debt is running at 90 per cent of GDP.

If you are a fully-signed up member of the Keynesian school of thought, the expectation is that, with all that continuous pump-priming, the French economy should be going gang busters. But, alas, the opposite is the case.

Unemployment in France is 10.6 per cent and rising. Youth unemployment is just over 25 per cent. The French economy is flat-lining, having been in and out of recession for the past four years.

So how did it come to this and what are the solutions to France's economic woes?

Compound Interest : Friend Or Foe?

Compound interest doesn't just only "allow" for growth (which sounds quite benign), it demands perpetual growth

By Raul Ilargi

Amid all the superficial up and down rumblings of stocks and bonds, and hyped up analysis thereof, none of which makes you any wiser (hey, I told you Abenomics can't work..), it's a good idea to look at some of the more profound workings of the financial system. I saw an interesting take on an angle into this, even though unfortunately it was by itself also superficial.

The angle in question was provided by Walter Hickey for Business Insider, in an article (originally) entitled " Compound Interest Is Responsible For Modern Civilization " (it later turned into "A Simple Math Formula Is Basically Responsible For All Of Modern Civilization", but that’s not even true: just because something can be expressed in a math formula doesn't mean it turns into that formula). It's interesting, and it's not bad, but, sorry Walter, with all respect, I don't think it's good enough.

And it made me wonder what people make of the whole compound interest notion, what they know about it, how they see it, what their intellectual or even emotional reaction is. I'd love to hear that from you. We've all grown up with it, to the extent that we probably don't give it enough thought; we view it as some kind of natural law - which it isn't - .

My own take is that while Hickey presents an interesting summary, the buck doesn't stop where the article does (at only the positive take on it); it reads too much like an Ayn Rand history lesson. In my opinion, you can't really talk, these days, about compound interest merely as "look at all the glorious things it's done for us", no more than you can talk about only the benefits of the oil industry, car manufacturing, GMO crops, nuclear energy or suburbs without providing a balancing part of your story that touches on the negatives as well. We got the brains, might as well use them.

I find it hard not to ponder the idea that even if compound interest is responsible for the civilization we know today, you can still read that in two very different ways, positive as well as negative. Or you can suggest that compound interest, even if it has perhaps been instrumental in building civilization, will inevitably also be responsible for the demise of that civilization. No compound interest story can be considered well written if it doesn't - also - touch on that part of the equation.

Our present discontents are precisely those of half a millennium ago

Taxed beyond Endurance 

By A. Daniels

For reasons neither interesting nor necessary to go into, I was reading Sir Thomas More’s History of Richard III the other day. I came across a passage that will have a certain resonance today among Britain’s taxpayers. It comes from the Duke of Buckingham’s speech to the Aldermen of London, in which he tries to raise their enthusiasm for Richard, then merely Duke of Gloucester, to be proclaimed King:

For who was there of you all that would reckon himself lord of his own goods, among so many snares and traps as were set therefor, among so much pillaging and plundering, among so many taxes and tallages, of which there was never end and often time no need, or if any were, it rather grew of riot and unreasonable waste than any necessary or honourable charge?             

So that there was daily plundered from good men and honourable, great substance of goods, to be lavished among unthrifts so extravagantly that Fifteenths sufficed not, nor any usual names of known taxes; but under the easy name of “benevolences and goodwill,” the commissioners of every man so much took, as no man with his good will would have given. As though the name of benevolence had signified that every man should pay, not what himself of his good will was pleased to grant, but what the King of his good will was pleased to take. Who never asked little, but every thing was raised above the measure: amercements turned into fines, fines into ransoms, small trespass to misprision, misprision into treason.

I could not but think on reading this of the French use of the word ‘solidarity,’ whose main meaning is now high taxation for redistribution (not least to itself) by a vast and dependent bureaucracy. 

Here I should add that Richard III promised to behave differently from his predecessor Edward IV, who had raised forced contributions from property-holders for his scheme of waging wear in France, from which in the event only a small elite of favourites around him benefitted. He called these  forced contributions ‘benevolences;’ Richard III outlawed them, but soon found himself obliged to solicit forced ‘loans.’ Whether he would ever have repaid them the Battle of Bosworth Field rendered unknowable; but it is likely that if every they had been repaid, it would have been in debased currency.

There is a strange consolation in knowing that our present discontents are precisely those of half a millennium ago.  

Why the Turn on Turkey?

Turkey’s Riots Threaten a Decade of Progress

by Eric Margolis

Western politicians and media have been scolding Turkey’s prime minister Recep Erdogan over this past week’s anti-government demonstrations in Istanbul and Ankara.

What began as a local protest over the foolish plan to raze trees in Gezi Park near Istanbul’s bustling Taksim Square quickly exploded into major protests thanks to the ham-handed response of Istanbul police, who tear-gassed and beat demonstrators. Turkish police have never been famed for gentleness.

PM Erdogan’s curt dismissal of the crowd as "looters" further inflamed the situation. In the West, Erdogan was accused of growing authoritarianism and trying to remake Turkey into an Islamic state. Even the normally sensible "Economist" magazine accused Turkey’s leader of trying to become a new Ottoman sultan.

What hypocrisy. These were the same Western newspapers and politicians who ardently backed Turkey’s former governments that were little more than sock puppets for the military. The very same opinion-makers lauded Egypt’s brutal dictator, Husni Mubarak, as a "statesman." So-called NGO’s like Freedom House and Amnesty International, cat’s paws for western governments, attacked Erdogan.

The demonstrators in Turkey’s cities were mostly young, secular and indulging in a springtime flash riot, facilitated by new social media and support from abroad. Many were rightly angered by Erdogan’s wrong-headed decision to take a lead role in trying to overthrow Syria’s government, a key trading partner for Turkey. Others, by his plans to limit public drinking and the eternal dispute over women’s head scarves.

What we have been witnessing is an attempt by anti-Erdogan secularists and far rightists, joined by members of Turkey’s long quiescent far left, to achieve what they could not do at the ballot box: ousting Erdogan’s moderate Islamic AK party from power.

Neocons are meddling all over the globe

Defund the American Comintern, and bring the outside agitators home

by Patrick J. Buchanan

A Cairo court has convicted 43 men and women of using foreign funds to foment unrest inside Egypt in connection with the overthrow of President Hosni Mubarak.

Sixteen of those convicted were Americans. All but one, Robert Becker of the National Democratic Institute, had already departed. Becker fled this week rather than serve two years in an Egyptian prison.

And U.S. interventionists are in an uproar.

"Appalling and offensive," said Sen. Pat Leahy of the verdicts.

"The 2011 revolution was supposed to end the repressive climate under Mubarak," said The Wall Street Journal of our ally of 30 years whom Hillary Clinton called a family friend.

This "crackdown," decries The Washington Post, was defended with "cheap nationalism and conspiracy theories." As for Egypt's proposed new law for regulating foreign-funded groups promoting democracy, it is "based on ... repressive and xenophobic logic."

Yet the questions raised by both the Cairo and Moscow crackdowns on U.S.-funded "democracy" groups cannot be so airily dismissed.

For these countries have more than a small point.

While U.S.-funded democracy promotion is portrayed as benign, the National Endowment for Democracy, the International Republican Institute, DNI and Freedom House have been linked to revolutions that brought down regimes in Serbia, Ukraine, Georgia, Uzbekistan and Kyrgyzstan, and nearly succeeded in Belarus.

People who pride themselves on bringing about revolutions should not whine when targeted regimes treat them like troublemakers.

And who directs these "pro-democracy" groups?

Before 2011, Freedom House was headed by ex-CIA Director Jim Woolsey, who says we are in "World War IV." The IRI is chaired by John McCain, who pushed for U.S. intervention in the Russia-Georgia war and is clamoring for air strikes on Syria.

Syria Is Now Saudi Arabia's Problem

The battle for a town on the Lebanese border marks the kingdom's first attempt to lead Syria's fractured opposition

BY HASSAN HASSAN

Hezbollah can finally claim a victory in Syria. The town of Qusayr, adjacent to the Lebanese border, has fallen to the Lebanese militia after nearly a month of fierce battles with Syrian rebels. Dozens of Hezbollah's fighters have been killed, despite air cover and ground support from Bashar al-Assad's regime.

The Qusayr battle has been constantly, and wrongly, described as a turning point in the Syrian war. Why has this small town of some 30,000 residents become "strategic," as it is constantly described in the press, all of a sudden? The town had previously been run by its Sunni residents for more than a year, with little mention of its strategic benefits.

Hezbollah's open military intervention in Syria partly explains the publicity the Qusayr battle has received. As a result, the "Party of God" has lost much of its political and ideological capital in the region -- a capital the militia had painstakingly acquired from its three-decade career of "resisting" Israel.

But beyond the supposed military benefits of Qusayr, the battle for the town carried important consequences for the balance of power within the Syrian opposition. Qusayr is arguably the first battle in Syria to be completely sponsored by Saudi Arabia, marking the kingdom's first foray outside its sphere of influence along the Jordanian border. Riyadh has now taken over Qatar's role as the rebels' primary patron: In one sense, the Saudis can also claim a victory in Qusayr, as they have successfully put various rebel forces under the command of their ally in the Free Syrian Army (FSA), Chief of Staff Gen. Salim Idriss.

Although the Syrian rebels received military aid from various countries and private donors, Qatar initially emerged as the main sponsor of the opposition. Its alliance with Syria's Muslim Brotherhood helped it control the political opposition and the armed rebels' most prominent factions, including Liwa al-Tawhid in Aleppo.

Why Sweden has riots

The fault-line in Polly Toynbee’s perfect society

by Johan Norberg

‘All of them should have been very happy,’ Robert A. Heinlein begins his 1942 novel Beyond This Horizon. The material problem has been solved on this future earth, poverty and disease have been eradicated, work is optional. And yet parts of the citizenry are not enthusiastic. Some are bored, others are preparing a revolt. Why should that be, in such a utopian world?

A similar puzzlement has been the dominant reaction from commentators after riots broke out and cars and buildings were burned in heavily immigrant-populated suburbs of Stockholm in late May. Sweden? Since the standard interpretation is that violence is the only weapon the marginalised have against an oppressive socioeconomic system, it is more difficult to explain it when it takes place in ‘the most successful society the world has ever known’, as Polly Toynbee once called it.

But it hasn’t stopped some from trying. If all you have is two terms of sociology studies, everything looks like a justified grievance. Leftists abroad have blamed the rioting on the liberalisation that has taken place in Sweden in recent years, and the supposed increase in inequality and poverty. The country’s big social democratic daily, Aftonbladet, tried to point to the effects of austerity (in a country where it has not been implemented) and claimed that the kids in the suburb of Husby rioted because ‘the health care centre, the post office, the midwives’ centre and the youth centre have been wound up’.

In fact, there are three youth centres in Husby. Its old health care centre closed, but a new one took its place. The midwives moved, but just one station away on the metro. You can find postal services 14 minutes from the centre, on foot. Where I live, you need to walk for 12 minutes. One shivers at the thought of what I could have been like had I lived another two minutes away. Would I also spend Friday nights torching nursery schools?

The Swedish poverty rate may very well be too high, but at 1.2 per cent, no European country has a lower one. The average in the European Union is 8.8 per cent. If poverty is the cause of riots, almost every city on the continent should have been burned down before Stockholm’s turn came, including most of those in Norway and Switzerland.

But inequality has increased, you say. Yes, since the extremely egalitarian mid-1980s (the last time Stockholm saw large-scale youth riots, by the way). But since 2005, when Toynbee proclaimed Sweden the egalitarian utopia, it has barely moved. My country is the most equal in Europe save for Slovenia. Of course, some might argue that you need equality at Slovenia’s level to maintain social harmony. That’s unless you had heard of the series of mass protests — sometimes violent — which have rocked Slovenian cities since last November, resulting in the fall of the government.

Reality grounds together Abe and Hollande

Abe, Hollande reach deal to push nuclear technology

BY MIZUHO AOKI

French President Francois Hollande and Prime Minister Shinzo Abe agreed Friday to deepen cooperation on developing and exporting nuclear power plant technologies, and to strengthen security ties.

In a joint statement following their summit in Tokyo, the two leaders agreed to arrange talks between their foreign and defense ministers, commonly known as two-plus-two talks, to discuss joint development of defense equipment as well as exporting such items overseas.

Through such talks, Japan aims to stop France from exporting dual-use items to China that could improve the Chinese military’s capabilities.

A French naval contractor sold ship-based helicopter landing systems to China, triggering concern in Japan that it will raise the potency of Chinese surveillance ships deployed around the disputed Senkaku Islands in the East China Sea.

Hezbollah’s Vietnam?

Hezbollah has entered Syria with no exit strategy

By MICHAEL YOUNG

The only thing odd about Hezbollah’s intervention in the Syrian conflict is that it took over two years for the party and its backers in Tehran to make the decision. That’s because whatever one thinks of Hezbollah, the triumph of Syria’s rebels always posed an existential threat to the party and its agenda. 

The victory in Qusayr was undeniably an important one for Hezbollah and the Syrian regime, knocking the rebels out of a swath of strategic territory in the province of Homs, linking Damascus to the coast. It now allows the Assad regime to turn its attentions to other areas from where the regime was forced to withdraw.

Attention is now focused on Aleppo, where Hezbollah combatants have been amassing recently. However, we can’t forget that the rebels have already been pushed out of neighborhoods around Damascus. And the recent deployment of Patriot missiles and F-16 aircrafts to Jordan suggests there are expectations of a regime offensive in the southern province of Deraa, considered the most likely location from where rebels could mount an attack against the Syrian capital.

Hezbollah’s deepening involvement in the Syrian war is a high-risk venture. Many see this as a mistake by the party, and it may well be. Qusayr will be small change compared to Aleppo, where the rebels are well entrenched and benefit from supply lines leading to Turkey. In the larger regional rivalry between Iran and Turkey, the Turkish army and intelligence services have an interest in helping make things very difficult for Hezbollah and the Syrian army in northern Syria, particularly after the car-bomb attack in Reyhanli in May. 

The Class Struggle Behind the 'Turkish Spring'

Keeping Islamism at bay is not a reason to support dictators

By Ian Buruma

One interpretation of the anti-government demonstrations now roiling Turkish cities is that they are a massive protest against political Islam. What began as a rally against official plans to raze a small park in the center of Istanbul to make way for a kitschy shopping mall quickly evolved into a conflict of values.

The fight appears to represent two different visions of modern Turkey — ­secular versus religious, democratic versus authoritarian. Comparisons have been made with Occupy Wall Street. Some observers even speak of a "Turkish Spring."

Clearly, many Turkish citizens are sick of Prime Minister Recep Tayyip Erdogan's increasingly authoritarian style, his steely grip on the press, the restrictions on alcohol, the arrests of political dissidents and now the violent response to the demonstrations. People fear that Sharia law will replace secular legislation and that Islamism will spoil the fruits of Kemal Ataturk, the founder of modern Turkey, who strove to modernize post-­Ottoman ­Turkey.

The current unrest in Turkey is less of a religious conflict as it is a class-based one.

It would seem that religion is at the heart of the Turkish problem. Political Islam's opponents regard it as inherently anti-democratic.

But things are not so simple. The secular Kemalist state was no less authoritarian than Erdogan's populist Islamist regime. If anything, it was more so. It is also significant that the first protests in Istanbul's Taksim Square concerned not a mosque but a shopping mall. Fear of sharia law is matched by anger at the rapacious vulgarity of developers and entrepreneurs backed by Erdogan's government. There is a strong leftist bent to the Turkish Spring.

So, rather than dwell on the problems of contemporary political Islam, which are certainly considerable, it might be more fruitful to look at Turkey's conflicts from another, now distinctly unfashionable, perspective: class. The protesters, whether they are liberal or leftist, tend to be from the urban elite — Westernized, sophisticated and secular. Erdogan, meanwhile, is still very popular in rural and provincial Turkey among people who are less educated, poorer, more conservative and religious.

The All-Seeing State

The inevitable corruption of the permanent bureaucracy 

By Mark Steyn

A few years ago, after one corruption scandal too many, the then Liberal government in Canada announced that, to prevent further outbreaks of malfeasance, it would be hiring 300 new federal auditors plus a bunch of ethics czars, and mandating “integrity provisions” in government contracts, including “prohibitions against paying, offering, demanding or accepting bribes.” There were already plenty of laws against bribery, but one small additional sign on the desk should do the trick: “Please do not attempt to bribe the Minister of the Crown as a refusal may offend. Also: He’s not allowed to bribe you, whatever he says.” A government that requires “integrity provisions” is by definition past the stage where they will do any good.

I thought of those Canadian Liberal “integrity provisions” passing a TV screen the other day and catching hack bureaucrats from the IRS Small Business/Self-Employed Division reassuring Congress that systems had now been put in place to prevent them succumbing to the urge to put on Spock ears and moob-hugging blue polyester for the purposes of starring in a Star Trek government training video. The Small Business/Self-Employed Division had boldly gone where no IRS man had gone before — to a conference in Anaheim, where they were put up in $3,500-a-night hotel rooms and entertained by a man who was paid $27,500 to fly in and paint on stage a portrait of Bono. Bono is the veteran Irish rocker knighted by the Queen for his tireless campaign on behalf of debt forgiveness, which doesn’t sound the IRS’s bag at all. But don’t worry, debt forgiveness-wise Bono has Africa in mind, not New Jersey. And, as Matthew Cowart tweeted me the other day, he did have a big hit with “I Still Haven’t Found What I’m Looking For,” which I believe is now the official anthem of the IRS Cincinnati office.

It took Congressman Trey Gowdy of South Carolina to get to the heart of the matter: “With all due respect, this is not a training issue,” he said. “This cannot be solved with another webinar. . . . We can adopt all the recommendations you can possibly conceive of. I just say it strikes me — and maybe it’s just me — but it strikes me as a cultural, systemic, character, moral issue.”

He’s right. If you don’t instinctively know it’s wrong to stay in $3,500-a-night hotel rooms at public expense, a revised conference-accommodations-guidelines manual isn’t going to fix the real problem.

No 'peace at home' in Turkey

To old hands in Turkish politics, the current unrest is reminiscent of the hegemonic style of the Democrat Party leadership of the 1950s

By Jacques N Couvas
"Peace at home, peace in the world" is the official motto of the Turkish Republic. Coined in 1931 by the republic's founder, Mustafa Kemal Ataturk, it implies a causal relationship, but the events this week in Istanbul and dozens of other cities of Turkey suggest that causality can work in reverse order, too. 

With protests continuing over the past week, two years of Arab Spring and intense socioeconomic unrest in southern Europe seem to be spilling into Turkey, which until now had stayed out of trouble. 

Still, the economy is strong, although not as strong as it has generally been in the past decade. As a result, the similarities Turkey shares with northern and southern Mediterranean countries that are also going through a crisis have more to do with poor leadership. 

Financial success, fueled by foreign direct investment (FDI) in luxury real estate in Istanbul and along Turkey's Aegean coast and by massive privatization of state enterprises, has given the ruling Justice and Development Party (AKP) unparalleled popularity as well as an increasing feeling of invincibility. 

Since AKP's 2011 electoral victory, this sentiment has translated into diminishing transparency and accountability by key government figures. Recep Tayyip Erdogan, AKP's leader and the Turkish prime minister, and a handful of close collaborators have ostentatiously disregarded calls by trusted advisors to consider the average citizen's concerns and be more inclusive of the 50% of Turkey's population that has not voted for AKP. 

Lack of government transparency, such as in southern Europe, and arrogance towards citizens and their fundamental freedoms, such as in the Middle East, have paved the way to an explosive manifestation of the sense that enough is enough, resulting in three deaths, over 1,000 injuries and 1,700 arrests.

Meet the 'Friends of Jihad'

Every grain of sand in the Levant knows the CIA is "assisting" Qatar and Saudi Arabia to weaponize the "rebels"

By Pepe Escobar 

Western politicos love to shed swamps of crocodile tears about "the Syrian people" and congratulate themselves within the "Friends of Syria" framework for defending them from "tyranny". 

Well, the "Syrian people" have spoken. Roughly 70% support the government of Bashar al-Assad. Another 20% are neutral. And only 10% are aligned with the Western-supported "rebels", including those of the kidnapping, lung-eating, beheading jihadi kind. 

The data was provided mostly by independent relief organizations working in Syria. The North Atlantic Treaty Organization (NATO) received a detailed report in late May - but, predictably, was not too keen on releasing it. 

As Asia Times Online has been stressing for months, the Sunni business classes in Damascus and Aleppo are either neutral or pro-Assad. And most Sunnis now regard the gangs of foreign mercenaries weaponized by Qatar and the House of Saud as way more repellent than Assad. 

A Tutorial on Money, Gold and Inflation

The gold standard alone makes money independent of governments, of dictators, of political parties, and of pressure groups

By Murray Sabrin

In his New York Times column, “Lust for Gold” (April 12), Paul Krugman embraces once again monetary inflation as one of the ways to create prosperity, one of the longest enduring myths in economics.  By disparaging gold as money, Krugman also reveals his lack of understanding of monetary economics.  In addition, Krugman’s support for deficit spending also puts him in the camp of George W. Bush, Dick Cheney, who said “deficits don’t matter.”  In short, Krugman as well as Republican politicians just cannot get enough of the welfare-warfare state.

Krugman writes, “…historically, gold has been anything but a safe investment.”  However, in 1968 gold was $35 per ounce; you could buy a brand new automobile for about 80 ounces, or $2,800.   Today, at $1,500 an ounce, you need only 20 ounces of gold to buy a brand new $30,000 automobile. In over four decades, gold has increased in purchasing power while the dollar has declined in purchasing power.  This is just example of many how gold has maintained its purchasing power over time.

So what is Krugman saying about gold that it is not a “safe investment?” Its purchasing power has increased while the dollar’s has plunged since I graduated from college.  Is Krugman implying that gold is not safe because the government has and could confiscate the yellow metal, as FDR did 80 years go this month?  And in 1971, President Nixon defaulted on the dollar when he closed the gold window when he told foreign government and other “official” holders of gold that the United States would not honor its commitment to redeem dollars at $35 per ounce.

Yes, gold is not “safe” when the people have to rely on the integrity of government officials to honor their commitment to be good stewards of a nation’s monetary affairs.

As far as returning to a gold standard, Krugman quotes his idol, John Maynard Keynes that the gold is a “barbarous relic,” with a link to the alleged deconstruction of gold as a reliable monetary standard.

Compare Keynes conclusion that gold is an artifact of barbarians with Ludwig von Mises’s insights about the opponents of the gold standard and how gold money leads to a check on government spending running amuck.

The False Choice in Europe Between Austerity and Growth

There is no path to prosperity other than profitable work and thrift

By Patrick Barron

The debate in Europe over what policies the debt ridden countries should pursue is being falsely constructed as a choice between austerity and growth.  Not only is there another, more appropriate alternative, but these two alternatives themselves are not properly defined.  The misconstruction of the euro has led to unsustainable debt levels.  The simplistic alternatives offered are (1) cutting spending and raising taxes–the austerity option–and (2) even more monetary stimulus–the growth option–which promises that even more credit will stimulate an economy to higher levels of production from which debt can be amortized.  These alternatives emerge out of a failure to understand why the countries are in debt in the first place and why previous credit injections have failed to ignite increased production.  Therefore, if the problem is not understood, the solutions offered are likely to fail.

The Real Cause of the Euro Debt Crisis

The establishment of the euro led to lower interest rates, as there were explicit and even some implicit statements that no member of the euro zone would be allowed to default.  This led to a classic case of moral hazard, whereby borrowers assume increased risk due to the promise that losses will be born either wholly or partially by others.  The increased debt was supported by euro expansion by the European Central  Bank, which monetized sovereign debt in a backdoor method.  But rather than lead to increased profitable production, the profits of which could amortize the debt, the increased debt led to unprofitable, speculative investment and expansion of welfare benefits.  There were no profits for debt amortization.

Long-Run Silence

Give me the right to free speech, and I will use it to claim all my other rights

By mark steyn

The other day, Niall Ferguson, a celebrity historian at Harvard, was at an "investors' conference," the kind of speaking gig he plays a lot of: You get a ton of money to go see a small number of extremely rich people and tell them something provocative — but not too provocative. So, at this conference of money guys in Carlsbad, somebody brings up the best-known quote from the most influential economist of our age — John Maynard Keynes's line that "in the long run we are all dead" — and Ferguson responds to the effect that, well, Keynes was a childless homosexual, so he would say that, wouldn't he? It's not an original thought: In fact, the only reason I didn't include it in the passage on Keynes in my book was that I felt it had been done a bazillion times before. But it evidently was so shocking to the California crowd, many of whom undoubtedly have friends who are gay hedge-funders or are thinking of becoming one, that everybody had the vapors about it, and poor old Ferguson found himself instantly transformed from one of Time's "100 most influential people in the world" into the Todd Akin of Harvard. "This takes gay-bashing to new heights," shrieked Tom Kostigen of Financial Advisor, who really needs to get out of the house more.

In the long run, Keynes is dead. So Obama was unable to place a Sandra Fluke/Jason Collins supportive phone call to him. But "the Queen of King's," as he was known at Cambridge, would have been amused by his newfound status as America's most bashed gay. In 1917, in Washington for Anglo-American debt talks, Keynes wrote home to his lover Duncan Grant about what a ghastly place it was: "The only really sympathetic and original thing in America is the niggers, who are charming."

If I understand the Gay Enforcers' position correctly, Keynes's homosexuality is no reflection on his economic theories, but Ferguson's homophobia most certainly is a reflection on his economic theories, which can now be safely dismissed by all respectable persons. Recognizing the threat to his highly lucrative brand, Professor Ferguson immediately issued an "unqualified apology." He is married to one of the bravest women on the planet, Ayaan Hirsi Ali, who has stood firm for a decade against loons who want to kill her as they did her friend Theo van Gogh. Up against a bunch of hysterical ninnies threatening only his speaking fees, Ferguson caved.

Club Fed: Where Fantasies Are a Way of Life

Fed bureaucrats and their academic accomplices think of themselves as central planners who can do no wrong and make no mistakes

By Thomas DiLorenzo

The Nobel prize-winning Austrian School economist F.A. Hayek titled his last book The Fatal Conceit to describe the conceit of the notion that socialist central planners could possibly possess all of the detailed knowledge that is in the minds of millions in a market economy to “plan” a socialist economy. His 1974 Nobel prize speech was entitled “The Pretense of Knowledge” and conveyed the same message. Despite the fact that the whole world learned of just how right Hayek, Mises, and the Austrians were for so many decades about socialism upon its worldwide collapse in the late 1980s, America’s central planners keep marching ahead with more and more failed central plans that are based on pretentious fantasies dressed up with unintelligible mathematical economic models – just like the Soviet central planners of the twentieth century.

I speak of course of the Federal Reserve Board and its economic central planners. A caricature of this socialistic central planning mentality was recently on display in the 2012 Annual Report of the Federal Reserve Bank of Minneapolis. The entire 40-page publication is devoted to not one but two interviews with the Minneapolis Fed’s president, one Narayana R. Kocherlakota, who had one of his employees (Doug Clement) throw him a series of softball pitch-style questions.

Hezbollah don't take no mess

The Susan and Samantha show goes Middle East

By Pepe Escobar 
The "Friends of Syria" are appalled. Their much vaunted "rebel held" stronghold of Qusayr is gone. This BBC headline sums it all up: "Syria conflict: US condemns siege of Qusayr." 

For White House spokesman Jay Carney, "pro-government forces", to win, needed help from by their "partners in tyranny" - Hezbollah and Iran. Right: so the "rebels" weaponized by Saudi Arabia, Qatar and the CIA, not to mention jihadis of the Jabhat al-Nusra kind, are partners in what, "freedom and democracy"? 

Spin out, facts in. This is a monster strategic defeat for the NATO-Gulf Cooperation Council-Israel axis. [1] The supply lines from Lebanon to Homs of the Not Exactly Free Syrian Army (FSA) gangs and the odd jihadi are gone. The Syrian Arab Army (SAA) will next move to Homs and the whole Homs governorate. The final stop will be two or three Aleppo suburbs still controlled by the FSA. 

There's absolutely no way Qusayr can be spun in the West as yet another "tactical withdrawal" by the FSA. The rebels insist they "withdrew". Nonsense. It was a rout. 

Et tu, Gul? Then fall, Erdogan

Turkey in Turmoil

By M K Bhadrakumar 

One thing that Turkish Prime Minister Recep Tayyip Erdogan said before pushing ahead on Tuesday with a four-day tour of the Maghreb tour still hangs suspended in the air. Hardly anyone picked it up. He said Turkish intelligence is looking into possible links between the recent incidents in Istanbul, scene of violently suppressed protests, and foreign elements. 

Erdogan hinted that some leads are already available with the Turkish intelligence. "Our intelligence work is ongoing. It is not possible to reveal their names. But we will have meetings with their heads." 

His words suggested that there might have been concerted foreign interference. Logically, the eyes turn toward Damascus, Tehran and Baghdad. But then, Erdogan also blamed Twitter for inciting unrest. He said,

There is now a menace, which is called Twitter. The best examples of lies can be found there. To me, social media is the worst menace to society.