Good luck with that ‘exit strategy’!

Roubini attacks the gold bugs

by DETLEV SCHLICHTER

Earlier this month, in an article for “Project Syndicate” famous American economist Nouriel Roubini joined the chorus of those who declare that the multi-year run up in the gold price was just an almighty bubble, that that bubble has now popped and that it will continue to deflate. Gold is now in a bear market, a multi-year bear market, and Roubini gives six reasons (he himself helpfully counts them down for us) for why gold is a bad investment. Roubini does not quite go so far as to tell his readers that there is no role whatsoever for the yellow metal. Investors should have a “very modest” share of gold in their portfolios, as a hedge against extreme risks, which, the good professor assures us, are almost so negligibly small that they are “irrational fears”, really, but beyond that there is little reason to bother with gold.

Interestingly, “very modest” is indeed a good description of gold’s share in the global asset mix. According to some studies gold accounts for only around 1 percent of global asset holdings. In terms of asset breakdown we already are where Roubini thinks we should be. So why bother? Those of us – such as yours truly – who hold a more pessimistic outlook as to the efficiency of current policies and the sustainability of the current monetary infrastructure, and who accordingly hold a bigger share of their wealth in gold, are evidently “paranoid”, and as they now reap the deserved reward for their dreadful negativity courtesy of a declining gold price, why not ignore them? It is, after all, a tiny minority. But it is evident from Roubini’s essay that he not only considers the gold bugs to be wrong and foolish, they also annoy him profoundly. They anger him. Why? – Because he thinks they also have a “political agenda”. Gold bugs are destructive. They are misguided and even dangerous people.

Asia's Rise of the Rest

Asia's New Power Brokers

By Robert Kaplan

Significant movements in world affairs often go unnoticed by the media. For what fits inside the strictures of hard news are usually dramatic statements by politicians, dramatic actions by military units or dramatic economic shifts. But what also really changes history are the gradual developments that accrue over time. That's one of the reasons you are liable to learn more by reading serious books or scholarly reports than by reading newspapers. Asia is a case in point.

The news about Asia is relentlessly repetitive and often insignificant, however tragic in human terms sometimes. Indeed, the recent building collapse in Bangladesh was heartrending, but geopolitically it was of marginal importance. The jousting between China and Japan over disputed islands in the East China Sea is important -- but after reading about it for months on end, unrevealing. The same with the islands in the South China Sea. We already know that Japan has a more activist prime minister and for years his country has been shedding its quasi-pacifism, if only the media would finally tell us more.

Syria's Collapse

Can Washington Stop It ?

by Andrew J. Tabler

Syria is melting down. The ruling regime’s attempt to shoot its way out of the largest uprising it has ever faced has killed over 80,000 people and displaced roughly half of Syria’s population of 22 million. If the current monthly death tolls of around 6,000 keep up, Syria will by August hit a grim milestone: 100,000 killed, a number that it took almost twice as long to reach in Bosnia in the early 1990s. This a full two years after U.S. President Barack Obama pronounced that President Bashar al-Assad needed to “step aside.”

Comparisons to the Balkans do not suffice to describe the crisis in Syria, however. The real danger is that the country could soon end up looking more like Somalia, where a bloody two-decade-long civil war has torn apart the state and created a sanctuary for criminals and terrorists. Syria has already effectively fractured into three barely contiguous areas. In each, U.S.-designated terrorist organizations are now ascendant. The regime still holds sway in western Syria, the part of the country dominated by the Alawite minority, to which the Assad family belongs; and fighters from Hezbollah, a Shiite Islamist group backed by Iran, regularly cross the increasingly meaningless Lebanese border to join Assad’s forces there. Meanwhile, a heavily Sunni Arab north-central region has come under the control of a diverse assortment of armed opposition groups.

Is Obama Starting A War With Syria Just A Distraction From All The Scandals?

For now, Obama is saving his own skin, and that is the most important thing. To him.

by Michael Snyder

Well, isn't that convenient?  At the moment when the Obama administration is feeling more heat then ever before, it starts another war.  Suddenly everyone in the mainstream media is talking all about Syria and not about the IRS scandal, Benghazi, NSA snooping or any of the other political scandals that have popped up in recent weeks.

As if on cue, Obama made headlines all over the globe on Thursday by claiming that the Syrian government has used chemical weapons against the rebels "multiple times", and that the U.S. was now ready to do more to assist the rebels.  That assistance is reportedly going to include "military support" for the rebels and a no-fly zone over at least part of Syria is being discussed.  Without a doubt, these are acts of war, and this conflict is not going to end until Assad has been ousted.  But Assad will not go quietly. 

And all it would take is for Assad to fire a couple of missiles at Tel Aviv for a huge regional war to erupt in the Middle East.  And what happens if Russia or China decides to get involved in the conflict in Syria?  Obama is playing with fire, but he has shown again and again that he is willing to do virtually anything if it will benefit him politically.

Freedom: The Unfolding Revolution

By  Jonah Goldberg

‘Why are there no libertarian countries?”

In a much-discussed essay for Salon, Michael Lind asks: “If libertarians are correct in claiming that they understand how best to organize a modern society, how is it that not a single country in the world in the early twenty-first century is organized along libertarian lines?”

Such is the philosophical poverty of liberalism today that this stands as a profound question.

Definitions vary, but broadly speaking, libertarianism is the idea that people should be as free as possible from state coercion so long as they don’t harm anyone. The job of the state is limited to fighting crime, providing for the common defense, and protecting the rights and contracts of citizens. The individual is sovereign; he is the captain of himself.

It’s true, no ideal libertarian state has ever existed outside a table for one. And no such state will ever exist. But here’s an important caveat: No ideal state of any other kind will be created either. America’s great, but it ain’t perfect. Sweden’s social democracy is all right, but if it were perfect, I suspect fewer cars would be on fire over there.

How Does It End?

Today, an economic forecast is more like the analysis of a criminal mind than the evaluation of economic data

By Monty Pelerin

The days of reasonable economic forecasting are over. Today, an economic forecast is more like the analysis of a criminal mind than the evaluation of economic data. The dominating role of government overpowers markets intentionally. In the short-term that will continue. Reactions to Federal Reserve minutes referencing continuation, alteration or cessation of quantitative easing cause stock markets to move by over 100 points. Other markets are affected by government interventions, just not so noticeably.

Long term, markets will overpower government. But, to paraphrase Keynes, in the long term many of us will no longer be around. In the meantime, economic forecasting is more political than economic. Dinosaur government affects everything it touches. Markets remain important although government is currently overpowering them. These deliberate distortions may continue for some time.

Markets left alone would reveal the truth about the sorry condition of our country. Government is doing everything it can to hide this condition from the populace. The nature of any government is to make itself look better in the eyes of the people. Big government has the power and means to do so.

3 Reasons the ‘Nothing to Hide’ Crowd Should Be Worried About Government Surveillance

Most people think the federal government would have no interest in them, but many discover to their horror how wrong they are

By Scott Shackford

Responding to a popular reaction to news of the National Security Agency’s massive data collection program, blogger Daniel Sieradski started a Twitter feed called “Nothing to Hide.” He has retweeted hundreds of people who have declared in one form or another that they are not concerned that the federal government may spy on them. They say they have done nothing wrong, so they have nothing to hide. If it helps the government fight terrorists, go ahead, take their civil liberties away.

In his blog, a frustrated Sieradski listed many of the abuses of power our federal government is known for; he is not happy with the "nothing to hide" crowd.

There are many, many reasons to be concerned about the rise of the surveillance state, even if you have nothing to hide. Or rather, even if you think you have nothing to hide. For those confronted by such simplistic arguments, here are a three counterarguments that perhaps might get these people thinking about what they’re actually giving up.

1. Every American Is Probably a Criminal, Really

That Americans think they have nothing to hide in the first place is a sign of how little attention they're paying to the behavior of our Department of Justice. Many Americans have run afoul of federal laws without even knowing it. Tim Carney noted at the Washington Examiner:

Copy a song to your laptop from a friend's Beyonce CD? You just violated the Digital Millennium Copyright Act. Did you buy some clothes in Delaware because they were tax free? You're probably evading taxes. Did you give your 20-year-old nephew a glass of wine at dinner? Illegal in many states.

Benito would have been very pleased

Great moments in bureaucratic excess: City officials in Hartford shut down barber giving free haircuts in park

by Mark J. Perry

On May 14, I posed the question above on Twitter, and we now know that the answer is: “About 30 days.”

From today’s Associated Press:

An 82-year-old barber who has been giving free haircuts to the homeless in exchange for hugs for 25 years has been kicked out of a park by city health officials. Anthony “Joe the Barber” Cymerys has been a fixture every Wednesday for years at Bushnell Park, where he cuts hair and his friends hand out food to the needy.

But shortly after Cymerys set up shop this week, he said, health officials and police confronted him and his friends and told them they had to leave because they didn’t have permits.

The bozo leviathan sees everything . . . and nothing

Big Politically Correct Brother

By Mark Steyn

Every time I go on his show, my radio pal Hugh Hewitt asks me why congressional Republicans aren’t doing more to insist that the GOP suicide note known as “the immigration deal” include a requirement for a border fence. I don’t like to tell Hugh that, if they ever get around to building the fence, it won’t be to keep the foreigners out but to keep you guys in.

I jest, but only very slightly and only because the government doesn’t build much of anything these days — except for that vast complex five times the size of the Capitol the NSA is throwing up in Utah to house everybody’s data on everything everyone’s ever done with anyone ever.

A few weeks after 9/11, when government was hastily retooling its 1970s hijacking procedures for the new century, I wrote a column for the National Post of Canada and various other publications that, if you’re so interested, is preserved in my anthology The Face of the Tiger. It began by noting the observation of President Bush’s transportation secretary, Norman Mineta, that if “a 70-year-old white woman from Vero Beach, Florida” and “a Muslim young man” were in line to board a flight, he hoped there would be no difference in the scrutiny to which each would be subjected. The TSA was then barely a twinkle in Norm’s eye, and in that long-ago primitive era it would have seemed absurd to people that one day in America it would be entirely routine for wheelchair-bound nonagenarians to remove leg braces before boarding a plane or for kindergartners to stand patiently as three middle-aged latex-gloved officials poke around their genitals. Back then, the idea that everybody is a suspect still seemed slightly crazy. As I wrote in my column, “I’d love to see Norm get his own cop show:

“Captain Mineta, the witness says the serial rapist’s about 5′10″ with a thin mustache and a scar down his right cheek.”

“Okay, Sergeant, I want you to pull everyone in.”

“Pardon me?”

“Everyone. Men, women, children. We’ll start in the Bronx and work our way through to Staten Island. What matters here is that we not appear to be looking for people who appear to look like the appearance of the people we’re looking for. There are eight million stories in the Naked City, and I want to hear all of them.”

A decade on, it would be asking too much for the new Norm to be confined to the airport terminal. There are 300 million stories in the Naked Republic, and the NSA hears all of them, 24/7. Even in the wake of a four-figure death toll, with the burial pit still smoking, the formal, visible state could not be honest about the very particular threat it faced, and so in the shadows the unseen state grew remorselessly, the blades of the harvester whirring endlessly but, don’t worry, only for “metadata.” As I wrote in November 2001, “The bigger you make the government, the more you entrust to it, the more powers you give it to nose around the citizenry’s bank accounts, and phone calls, and e-mails, and favorite Internet porn sites, the more you’ll enfeeble it with the siren song of the soft target. The Mounties will no longer get their man, they’ll get you instead. Frankly, it’s a lot easier.” As the IRS scandal reminds us, you have to have a touchingly naïve view of government to believe that the 99.9999 percent of “metadata” entirely irrelevant to terrorism will not be put to some use, sooner or later.

"It can't happen here" just did.

The Very Real Threat Posed by the NSA

By Gene Healy
As a Senate candidate in 2003, Barack Obama called the PATRIOT Act "shoddy and dangerous." Once safely in power, Obama started demonstrating his remarkable capacity for "growing in office" -- expanding federal powers while piously moralizing about their potential abuse.

As a senator, he voted to reauthorize the surveillance law in 2006; and as president, signed another PATRIOT renewal from Europe via presidential autopen in 2011.

Sen. Ron Wyden (D-Ore.) has long warned of a "secret PATRIOT Act" -- a classified interpretation of the law that allows the administration to undertake massive data collection on American citizens.

Last week, we got a glimpse of what he meant, when a National Security Agency contractor revealed that the agency has assembled a database of at least seven years' worth of Verizon customers' call records -- a practice that apparently extends to other carriers.

"Nobody is listening to your calls," the peevish president said last week; they're "sifting through this so-called metadata," trying to identify potential leads.

About that "metadata": It allows the government secretly to track who a target communicates with and where he's physically located. That knowledge can be used to unearth who's leaking to reporters, when and where political opponents are meeting -- even who's sleeping with whom.

The NSA's massive call-records database is thus a potential treasure trove for bad-faith political actors -- it can be used to ferret out the sort of information that governments have historically used to blackmail and control dissenters.

We needn't resort to hyperbolic examples like the East German Stasi to understand the dangers here -- there's a relevant comparison much closer to home. A series of congressional investigations in the 1970s taught Americans shocking lessons about Cold War-era surveillance abuses.

In 1974, the House Judiciary Committee tasked Deputy Attorney General Laurence Silberman with reviewing former FBI Director J. Edgar Hoover's secret files.

H.L. Mencken and Thinking Independently

Mencken was a champion of the individual, of rationality, of the human mind in a century of collectivism of many sorts

“I believe that it is better to tell the truth than a lie. I believe it is better to be free than to be a slave. And I believe it is better to know than to be ignorant.”

By Bill Bonner.

The writings of H.L. Mencken — the Sage of Baltimore — have been a constant companion for me since the start of my writing life. The brilliance, the language, the insight, the derring-do opinionating, the history, the astounding literacy — it’s all here, and it all flows seemingly without limit. All these features are combined in one mind and life, yet none of these features is the reason why it is important to read Mencken. The most important reason is that Mencken assists in the great struggle to free yourself from intellectual conventions and become a mature observer of the world.

To mature means to gradually let go of dependence on others and to depend on your own resources. It also means to accept responsibility for the judgments you make, and not slough them off on other people. It is the same with thinking. To mature means to break loose from canned forms of thought that you once accepted without question, and instead see the world for what it is. It is the essential step toward living a free life.

Modern American democracy seems to war against this kind of maturation. Take a look at the best-selling political and financial books on the conventional lists. Their goal is to play to your biases, to bring you the comfort of having something you already think reinforced. In politics, it means cheering for party X over party Y on grounds that you accept ideology X over ideology Y. There simply is no large market for people who accept some of each or reject both.

In finance, it means believing that the world is either progressively coming together or falling apart. The evidence to support this either/or proposition is assembled in order to confirm as true what you would otherwise think.

This is the easy path. But it is not obtaining maturity. It is not thinking for yourself. It is dependence. It consists in shaping your thinking to a model forged by others. People who read only this way imagine that they are educating themselves. Actually, they are only gorging themselves on settled conventions.

If we really want to think hard and maturely, we need to encounter ideas that cause some element of discomfort. We need to leave our comfort zones and imagine that perhaps the mob is not as smart as people say. Maybe we can only find the truth of a situation in an opinion that cuts against the grain, is not represented by political party, and departs radically from settled orthodoxies. When we realize this, we enter on the road to intellectual maturity.

The thinkers and writers who can assist in this process are few. When they do appear, they disappear just as quickly for lack of champions. I fear this might be the fate of H.L. Mencken. For decades, he was there to stir the pot and work against mob opinion. This is why he opposed U.S. entry into World War I. This is why he was a literary progressive in times when most people were stuck in the past. This is why he ridiculed Prohibition when the entire Northeast religious and government establishment thought it was a brilliant idea. This is why he never shrank from flailing orthodoxies that were accepted by nearly everyone.

France Shoots Itself In Foot

Economic rationality has never stopped the French government from shooting the country, in the foot

By Wolf Richter   

On Friday, France vetoed the launch of free-trade negotiations between the EU and the US, though France has been racking up a trade surplus with the US and has much to lose if the US retaliates. The problem: cultural protectionism. It wanted “protection of cultural services and a clear and explicit exclusion of the audio-visual sector,” whined Foreign Trade Minister Nicole Bricq at a Friday meeting of the EU trade ministers. Catch phrases for American movies and TV shows!

Her speech and the veto were hushed up in Europe, and I couldn’t find any reference to it in the major media outlets. But an unnamed “EU diplomat” leaked the text of her speech to the Chinese media group Xinhua, which wasn’t shy about spreading the word.

It was the day that the European Council was supposed to approve a mandate to start haggling over the Transatlantic Trade and Investment Partnership (TTIP) with the US. All along, France had vociferously threatened to shut down the process before it even got started unless the European Commission included in advance a non-negotiable, iron-clad “cultural exception” to protect the French market from a tsunami of evils, namely American movies – a theme that goes back two decades.

France concocted this “cultural exception” under socialist President François Mitterrand and, with the support of a handful of other countries, forced it on the 1992-93 negotiations of the General Agreement on Tariffs and Trade (GATT), the so-called Uruguay Round – under the pretense that applying GATT principles to movies and other audiovisual products “would undermine their cultural specificity (and unique status), in favour of their commercial aspects.”

Since then, the concept of “cultural exception” has become, according to UNESCO, a “tacit understanding,” without legal value, “that culture is not like any other merchandise because it goes beyond the commercial....” Sounds good. It was propagated by conservative Jacques Chirac when he ascended to the French presidential throne in 1995 and has now become part of the DNA of France’s political class.

It permitted France not only to subsidize its film industry with taxpayer money but also to impose quotas on theaters and TV channels as to the percentage of time that French productions must be shown, even if they’re lousy, and even if no one comes to see them. With the quotas, the government tried to limit access to American movies. On the basis that the State knows best what the people need to watch.

An Unimaginable Figure

The momentum being sucked away from the budget debate

The nation’s most unlikely, yet stalwart, fiscal hero

by Peter Coyne.

“Suppose you were an idiot. And suppose you were a member of Congress. But I repeat myself.”

                                                 – Mark Twain

Enter last Friday’s Washington Post commentary:

“After two years of harrowing confrontations in Washington, the national debt is no longer growing out of control and policymakers from President Obama to House Speaker John A. Boehner have rushed to take credit…”

Did the debt shrink? Have changes been made to the structural deficit built into the nation’s fiscal plan?

Ha! Of course not.

One estimate from Professor Laurence Kotlikoff, an economist at Boston University, takes account of all the projected unfunded liabilities and interest payments and puts the U.S. debt at $222 trillion.

It’s a laughable figure. Unimaginable, even.

“The deficit is getting better,” explains I.O.U.S.A. protagonist Robert Bixby tried to explain to the Post on Friday [our cynical ears can hear him snickering over a can of Tab], “but it’s not a result of any hard choices Congress made. They all want to get on the aircraft carrier, like George Bush with his ‘Mission Accomplished’ banners.”

Secret Police State

What’s worse: the NSA or the East German Stasi?

BY CHRISTIAN CARYL

President Barack Obama is headed off to Germany next week, and while he's there he should expect to get an earful about the National Security Agency surveillance scandals that have been dominating the news in the United States over the past week.

The Germans are scandalized. "Germans so outraged at U.S. over spying that Merkel will raise the issue directly with Obama,  says the Washington Post. A leading German data protection official is telling German Internet users to avoid American companies like Facebook and Google, since, he says, all of the data in their networks is likely to be scooped up for use by U.S. intelligence. A German parliamentarian says that the revelations about the extent of National Security Agency (NSA) surveillance remind him of the Stasi, the old East German secret police. (Let's leave aside, for the moment, the point that European governments still do plenty of spying of their own, and intrude in the lives of their citizens in ways that many Americans would find repugnant.)

German touchiness on the subject has a lot to do with history. There was that singular unpleasantness with the Gestapo a few years back, of course -- but for all its crimes the Nazi secret police was actually a fairly small organization that depended heavily on a wide net of enthusiastic informers within a broadly regime-loyal population. And then there's the horrifying tale of East Germany's Ministerium fuer Staatssicherheit, the Ministry for State Security, known more widely by the abbreviated version of its name -- the Stasi. It was this agency that was responsible for building up what was probably the most expansive surveillance state in history.

The Americanness of the American Revolution

Why the Founders succeeded

by Myron Magnet

Why was the American Revolution, of all great revolutions, the only successful one, resulting in two centuries and more of unexampled freedom and prosperity? The French Revolution, by contrast, illuminated by America’s example and Enlightenment thought, began in blissful optimism but collapsed into a blood-soaked tyranny much worse than the monarchy it deposed. It spawned a military dictatorship that convulsed Europe and roiled half the globe for over a decade with wars of grandiose imperial aggression that slew at least 3 million. And the result of 25 years of turmoil? The Bourbon monarchy, minus the Enlightenment of its earlier incarnation, settled comfortably back down on its throne.

The Russian Revolution switched one despotism for another; and a century later, after the millions of deaths from its purges, slave camps, and intentionally inflicted famines, Russia remains a despotism, without rights or justice. We all get only one life: imagine someone born under the billowing flags of the new Soviet Union in 1917, who had to live that whole single life without the freedom so much as to speak the truth of the squalid, oppressive reality he saw in front of his own eyes. One single life—and what you can make of the one you have depends so much on what others have done to mold the time and place in which you live.

The Founders knew that truth so well that they announced their nationhood by significantly changing John Locke’s catalog of natural rights. The shift began in the Virginia Declaration of Rights, where George Mason emended Locke’s right to “Lives, Liberties and Estates” to “Life and Liberty, with the Means of acquiring and possessing Property, and pursueing and obtaining Happiness and Safety.” Two months later, Thomas Jefferson penned the final pithy formulation of “Life, Liberty and the pursuit of Happiness” in the Declaration of Independence. The pursuit of happiness! Who but the Americans made a revolution to vindicate the paramount right of each individual to try to make the most of his life by his own effort as he sees fit?

The view from Taksim Square

Turkey’s agony – how Erdogan turned a peaceful protest into a violent nightmare

by Claire Berlinski 

By now, everyone has heard of the brutal suppression of protests all over Turkey, which began with a peaceful sit-in in Istanbul to protect a hapless apology for a park from demolition. Right by the city’s unofficial centre, Taksim Square, Gezi Park had been slated to become yet another one of the ruling AKP’s signature Ottoman-cum-Disneyland construction projects. It was hardly much of a park, by London standards, but it was one of the last remaining places in the area with a few trees and a bit of room to stroll around. The protesters found the idea of losing that tiny refuge from Istanbul’s urban chaos unbearable.

The police removed the inoffensive tree-huggers in a surprise dawn raid, using violence so disproportionate and sadistic — and unfortunately for the police, so filmed — as to set off enraged demonstrations around the country. These, in turn, provoked even more psychotic retaliation from the police. Every story you’ve read of the brutality the cops inflicted on peaceful protesters is true, and more. I saw it. I’ve been seeing it with my own eyes for weeks, but by far the worst took place on Tuesday, when the police descended in the early morning to retake Taksim Square, directly after Prime Minister Recep Tayyip Erdogan had lulled the protesters with promises to meet them the next day to listen to their concerns.

The surprise attack began at 7.30 a.m. Black smoke quickly rose over the square, and tear gas enveloped the entire neighbourhood. Then the water cannon arrived, half a dozen, followed by another burst of gas. While at least six cameras from Taksim were feeding this scene live to the entire country, Istanbul Governor Huseyin Avni Mutlu assured the public, on Twitter, that ‘some protestors used materials that release fog and smoke. We should all know that their purpose is making the impression that the police used excessive gas.’ It didn’t occur to him, I suppose, that it is not just fog and smoke that indicates the presence of a lachrymatory agent. He also promised the protesters that only Taksim itself would be ‘cleaned’. The protesters and the park, he swore, would ‘never’ be harmed.

Three hours later, protesters formed a human chain around the park to prevent the police from recapturing it, but the cops shot rubber bullets, beat up journalists, and detained not only countless protesters, but their lawyers — 79 lawyers, according to the Istanbul Bar Association. The government is now dropping hints about an ‘operation’ against ‘provocateurs’ on Twitter — not an idle threat, for many have already been detained for writing ‘misinformation’, which apparently encompasses, among other things, tweeting the phone numbers of physicians on duty. A Turkish journalist reports that prosecutors have obtained warrants to seize any mobile phone they require. I have not yet been able to confirm this, but it wouldn’t in the least surprise me.

Why Farm Subsidies Survive

Government is biased toward the past

By Robert Samuelson 

The farm bills now before Congress -- one from the Senate, the other from the House -- attest, if nothing else, to the inertia of politics. There is no "public interest" (a phrase often meaningless in Washington) in having government subsidize farmers. Food would be produced without subsidies. The uncertainties and insecurities faced by farmers from unpredictable weather and global markets, though often compelling, are paralleled by the uncertainties and insecurities faced by many industries from disruptive technologies, erratic business cycles and shifting public tastes. Yet, unlike most industries, agriculture is lavishly subsidized and protected by government.

The explanation is force of habit. Since the Great Depression of the 1930s, when there were plausible reasons to aid farmers, government has consistently accorded agriculture special treatment. The politics of doing so long ago became self-perpetuating. Without the massive subsidies, the Agriculture Department would be far less important. So would the congressional agriculture committees and the crowd of farm groups (sometimes, it seems, one for almost every crop) that lobby for benefits. And certainly the farmers who receive payments and protections feel entitled to them.

All this creates a powerful and shared vested interest in safeguarding the status quo, even as different interest groups and their congressional champions fight ferociously over the structure and distribution of benefits. The cost has been considerable. From 1995 to 2012, the various subsidies totaled $293 billion -- more than $16 billion annually -- according to the Environmental Working Group (EWG), a critic of present programs. This understates the true costs, because it includes only the on-budget costs of explicit subsidies. Excluded are higher consumer prices paid on some products (sugar, for instance) that are partially shielded from market competition.

The Character of Edward Snowden

It will take millions more like him to give freedom a fighting chance in an age of leviathan State control

by JEFFREY A. TUCKER

Edward Snowden, age 29 and now temporarily living in Hong Kong, is the overnight sensation who leaked details about the National Security Administration’s (NSA) practice of massive and sweeping surveillance of Americans’ browsing habits. He has also provided a model of what it means to live a principled life, even when it comes at personal expense. 

What his leak revealed is truly chilling and even infuriating. He demonstrated that websites and cell phone companies are sharing their databases with the U.S. government in real time—without so much as court orders—and thereby making every one of us a victim of snooping and possibly vulnerable to blackmail for so long as we shall live.

Much more important for any lover of freedom, however, is the manner in which he went about his defiance. He acted peacefully, openly, with total dedication to principle. He took responsibility for speaking the truth. He did it with a clean conscience. He has been willing to face the consequences for his actions. 

It will take millions more like him to give freedom a fighting chance in an age of leviathan State control.

1984 and the Surveillance State

The Eyes Watching You

by SARAH SKWIRE

In the kind of horrifying coincidence that surely would have prompted one of his more acerbic essays, the news that various U.S. government surveillance agencies have been gathering data from millions of citizens’ phones, email accounts, and web searches broke during the week of the 64th publication anniversary of George Orwell’s 1984. As the news reports poured in, and as sales of 1984 surged by an astonishing 6,884 percent, a friend asked me whether the PRISM story strikes me as more Orwellian or more Kafkaesque.

My response? We’d better hope it’s Kafkaesque.

No one wants to inhabit a Franz Kafka novel. But the surveillance states he describes do have one thing going for them—incompetence. In Kafka’s stories, important forms get lost, permits are unattainable, and bureaucrats fail to do their jobs. Like the main character in Kafka’s unfinished story, “The Castle,” if you were trapped in Kafka’s world you could live your whole life doing nothing but waiting for a permit. But at least you could live. Incompetence creates a little space.

This Is What Crisis Feels Like

Collapse happens very slow and then all at once

by Simon Black

On December 1, 2001, Argentina’s economy was in trouble. Unemployment was high, debt was high, and recession had taken hold. But life was somewhat ‘normal’.

Basic services still functioned. And no one had to really worry about... food. Or water. Then it all changed. Literally within a day.

On December 2nd, our bankrupt government imposed measures that essentially froze everyone’s bank accounts. You can just imagine– one day having access to your funds, and the next day being completely cut off.

Within a matter of days, people were out in the streets doing battle with the police. The government soon defaulted on its debt, and the currency went into freefall.

I was doing some post-graduate work in Boston at the time. As a foreigner in the US, I wasn’t really able to work… so I was living on a tight budget from my savings.

Yet, overnight, I went from being able to pay my rent and living expenses to being completely cut off from my funds. I had nothing.

But when I spoke to my family back in Argentina, I realized that they had it even worse.

Everything became scarce. The electricity went out all the time. Even food on the grocery store shelves ran low. You would eat what you had available at home.

And in a way, food became a medium of exchange. Within just a few days, people went from having confidence in their currency to not trusting it at all. No one wanted to accept paper money anymore, especially for something as valuable as food.

And if they did, it would be at 2-3 times the normal price. With all of this unfolding, I flew back down to see my family.

The euro is not much like the historical gold standard

Νo market signal operates directly on ECB's balance sheet the way that loss or gain of gold reserves did

by Kurt Schuler

From time to time I see comments in the press or on the Internet comparing the euro to the gold standard. In point of fact, they have little in common.

Most obviously, of course, the euro is a fiat currency having a floating exchange rate, while under different forms of the gold standard, national currencies were redeemable in, well, gold at a set rate.

The euro is in several ways more monolithic than the historical gold standard was. Under the gold standard, many countries went off the standard and later returned. The United States, for instance, went off the gold standard near the start of the Civil War and returned to it in 1879. Britain went off it during the Napoleonic Wars. No country has so far left the euro area, so of course no country has returned to the euro area.

The euro is a single currency. A euro note in Finland is accordingly interchangeable with a euro note in France in terms of the ability to spend it readily on local goods without any transaction fees. Under the gold standard there were multiple national currencies, which while exchangeable at set rates were not fully interchangeable. A century ago you would have had a hard time spending a Canadian $50 note in Atlanta even though the Canadian and U.S. dollars were worth the same amount of gold.

In the euro area there is a single central bank practicing a single monetary policy, reflected in a single main policy interest rate. Under the gold standard there were multiple central banks as well as other monetary authorities and free banking systems. The central banks had differing policy interest rates (for some examples see the spreadsheet for “policy interest rates” available in this data set I edit).