Central banks and illusions of independence

The mystery of Swiss Central Bankers

by Reuven Brenner 

While much attention is now paid to personalities of incoming central bankers, far less attention is paid to debating central banks' mandates in light of the unusual fiscal and financial intermediary roles they have been fulfilling since 2008. 

The crisis revealed institutional voids that the central banks filled quickly. Such ventures by central banks have been tolerated in the past too: there is nothing new about quantitative easing (QE). The Fed practiced it during the 1940-51 under the Treasury's explicit command, though the technique had no name then. The Fed stopped the practice when it became officially independent again in 1951. 

1940 fiscal parallels and the Fed's independence
Federal Reserve chairman Ben Bernanke acknowledges that he is replicating the monetary policies of the 1940-1951, though takes no note of the unusual circumstances then.  Here is a quote from a 2008 speech:

... Historical experience tends to support the proposition that a sufficiently determined Fed can peg or cap Treasury bond prices and yields at other than the shortest maturities. The most striking episode of bond-price pegging occurred during the years before the Federal Reserve-Treasury Accord of 1951. Prior to that agreement, which freed the Fed from its responsibility to fix yields on government debt, the Fed maintained a ceiling of 2-1/2 percent on long-term Treasury bonds for nearly a decade. Moreover, it simultaneously established a ceiling on the twelve-month Treasury certificate of between 7/8 percent to 1-1/4 percent and, during the first half of that period, a rate of 3/8 percent on the 90-day Treasury bill.
The Fed was able to achieve these low interest rates despite a level of outstanding government debt (relative to GDP) significantly greater than we have today, as well as inflation rates substantially more variable. At times, in order to enforce these low rates, the Fed had actually to purchase the bulk of outstanding 90-day bills.

He fails to mention that during the 1940s, the Fed was carrying out fiscal policy under explicit Treasury orders.   The low interest policy - inflation was in the double digits - helped pay for World War II and the accumulated debt. 

The Fed could do this then both because there was domestic political support for the war effort, and later, as support after the war was weakened, the global conditions stayed such that capital had few places to flow: the US was in the immediate post-war period the safest place. 

However, the world stabilized and capital started to flow to Western Europe too. At the same time, the US abolished the Office of Price Administration in 1947, and the official inflation rate this Office's policy kept artificially low until then hit double digits. Public debates then started about restoring the central bank's independence. This was done in 1951, president Harry Truman's pressure to continue with the "QE" policies to finance the Korean War too notwithstanding. 

There are similarities and differences between that decade and the situation today. 

The similarities are the monetary techniques used to achieve the low interest payments, allowing the Federal government to carry increased debts. There are similarities in the global situation too: during the 1940 decade as well as since 2007 when the present crisis started, grave problems notwithstanding, the US has been the safest place for capital to flow. Europe had big question marks hanging about its future then as now - though for different reasons. Russia, China, India and most of Latin America were not places where much capital could flow or be absorbed.

With much global savings flowing to the US, with domestic savings staying put, and with government policies elsewhere perceived unreliable, it was not surprising that the Fed could maintain low interest rates, the federal government can accumulate debts, and not default - then, as now. 

Al-Qaeda's air force still on stand-by

Lose face, will travel 

By Pepe Escobar
It was 12 years ago today. Historians will register that, according to the official narrative, 19 Arabs armed with box cutters and minimal flying skills pledged to a transnational Terror Inc turned jets into missiles to attack the US homeland, fooling the most elaborate defense system on Earth. 

Fast forward to 2013. Here's a 15-second version of the President of the United States (POTUS) address on Syria, one day before the 12th anniversary of 9/11:

Our ideals and principles, as well as our national security, are at stake. The United States is "the anchor of global security". Although the United States military "doesn't do pin pricks", we still carry the burden to punish regimes that would flout long-held conventions banning the use of biological, chemical and nuclear weapons. 

That's why I have decided to pursue an unlimited, targeted military strike against Washington DC.

For countless global citizens, this alternative version predictably sounds as far-fetched as the official version of what happened 12 years ago. The fog of war obscures in mysterious ways. But the fact remains that the current, "reluctant" (farcical) Emperorcontinues to stake his - and his nation's - "credibility" on a "limited", "kinetic" operation to reinforce his self-defined red line against chemical weapons. 

Lose face, will travel 
In theory, the Russian plan of having Damascus surrender its chemical weapons arsenal works because of its inbuilt Chinese wisdom; nobody loses face - from Obama and the US Congress to the European Union, the UN and the even more farcical "Arab" League, which is essentially a Saudi Arabian colony. 

Although Obama is on a media blitzkrieg stealing the credit for it, Asia Times Online has confirmed that the plan was elaborated by Damascus, Tehran and Moscow last week - after a visit to Damascus by the head of the national security committee of the Iranian Majlis (parliament), Alaeddin Boroujerdi. US Secretary of State John Kerry's now famous "slip" provided the opening. 

Italy floated plans to leave euro in 2011

Private investors have pulled out of Club Med, dumping their claims onto the taxpayers of Germany and the northern creditor states

By Ambrose Evans-Pritchard

So, we now know: Silvio Berlusconi seriously floated plans to pull Italy out of the euro in October/November 2011, precipitating his immediate removal from office and decapitation by EMU policy gendarmes.

Ex-ECB insider Lorenzo Bini-Smaghi has quietly dropped a few bombshells in his new book Morire di Austerita (Dying of Austerity), worth a read if you know Italian.

Mr Bini-Smaghi – until recently on the ECB's six-man executive council, and for many years Italy's man in Frankfurt – states that Silvio Berlusconi was toppled as Italian premier in November 2011 as soon as he began to rattle the EMU cage in earnest.

Specifically, he discussed (threatened?) Italian withdrawal from the euro in private meetings with other EMU governments, presumably with Chancellor Angela Merkel and France's Nicolas Sarkozy, since he does not negotiate with underlings. ("L'ipotesi d'uscita dall euro era stata ventilata in colloqui privati con i governi degli altri paesi dell'euro").

We have long suspected this. Now it is confirmed.

Trying To Stay Sane In An Insane World - Part 2

The main tools of modern finance are mystification, obfuscation and hypnosis

by Jim Quinn

In Part 1 of this article I detailed the insane solutions proposed and executed since 2008 by our owners as they attempt to retain and further expand their ill-gotten wealth, acquired through fraud, deceit, swindles, and the brilliant manipulation and exploitation of the masses through Bernaysian propaganda techniques. Madness has engulfed the entire world, with a concentration of power in the hands of a few psychopathic financial elite wielding an inordinate and dangerous expanse of power over the lives of the common man. They are a modern day version of Al Capone, except their weapons of choice aren’t machine guns, but a printing press, peddling debt, creating derivatives of mass destruction, and peddling heaping doses of disinformation. The contemporary criminal class wears Hermes suits, Rolex watches and diamond studded pinky rings, drops $500 to dine at Masa in NYC, travels by chauffeured limo, lives in $10 million NYC penthouse suites, occupies luxurious corner offices in hundred story glass towers, and spends weekends hobnobbing with the other financial elite at their villas in the Hamptons. They have nothing but utter contempt for the lowly peasants who depend upon a weekly paycheck to make ends meet. Why work when you can steal $1 or $2 billion from farmers with no consequences?

The New Guru of the Central Planners

Another attempt to square the circle

by Pater Tenebrarum

The 'Most Influential Monetary Theorist' of Our Time

Talk is cheap – but not according to Michael Woodford, who is portrayed in this Bloomberg article. It appears that Mr. Woodford is the main author of the new central bank 'shamanism' we discussed in a previous article. In their constant quest to square the circle – this is to say to answer the unanswerable question: “how can we actually make the unworkable, namely central economic planning, work?”, central bankers and their advisors meet regularly to exchange ideas, e.g. at the annual Jackson Hole gathering.

They could of course exchange ideas until the end of the universe and central planning of the economy would still not work. There is no 'better plan' (this is not to say that there are no gradations of central bank policy possible). This is not something they are ever told or would even want to hear. Whenever their interventions blow up into our collective faces, their conclusion is that a 'better plan' needs to be cooked up in order to fix what the previous plan has wrought. It is only natural that they would think so. Admitting that the free market is superior to their schemes would be like foreswearing their life's work. Everything they have ever said or done would come into question. Moreover, admitting that the economy would function far more smoothly and efficiently without their interference would be an admission that their jobs are utterly superfluous.

Thus the constant attempt to square the circle. It is in fact grotesque, almost reminiscent of a Monty Python farce. There you have all these erudite, well-educated people in one spot, earnestly discussing which levers to pull next, and it is all for nothing. Worse, it is certain to cause even more damage!

The Bloomberg article on Mr. Woodford is very interesting, because it inadvertently illustrates some of the ways in which modern-day macro-economic theorizing has become utterly detached from reality. Leave it to Bloomberg's  editors though to once again provide us with an at first glance incomprehensible headline: “Woodford’s Theories Rooted in Japan Slump Embraced by Bernanke”. It takes a brief moment to realize that Bernanke isn't embracing the 'Japan slump', but Woodford's theories, which in turn are deemed to be rooted in the Japanese post bubble experience.

Trying To Stay Sane In An Insane World - Part 1

The most dangerous man, to any government, is the man who is able to think things out for himself

 

by Jim Quinn

“I mean—hell, I been surprised how sane you guys all are. As near as I can tell you’re not any crazier than the average asshole on the street.” – R.P. McMurphy – One Flew Over the Cuckoo’s Nest

“Years ago, it meant something to be crazy. Now everyone’s crazy.” – Charles Manson 

“In America, the criminally insane rule and the rest of us, or the vast majority of the rest of us, either do not care, do not know, or are distracted and properly brainwashed into acquiescence.”– Kurt Nimmo

I have to admit to being baffled by the aptitude of the Wall Street and K Street financial elite to keep their Ponzi scheme growing. I consider myself to be a rational, sane human being who understands math and bases his assessments upon facts and a sensible appraisal of the relevant information obtained from trustworthy sources. Of course, finding trustworthy sources is difficult when you live in a corrupt, crony-capitalist, fascist state, controlled by banking, corporate and military interests who retain absolute control over the mainstream media and governmental propaganda agencies. Those seeking truth must pursue it through the alternative media and seeking out unbiased critical thinkers who relentlessly abide by what the facts expose. This is no time for wishful thinking, delusions and fantasies. In the end, the facts are all that matter. As Heinlein noted decades ago, the future is uncertain so facts are essential in navigating a course that doesn’t lead you to ruin upon the shoals of ignorance.

“What are the facts? Again and again and again – what are the facts? Shun wishful thinking, ignore divine revelation, forget what “the stars foretell,” avoid opinion, care not what the neighbors think, never mind the un-guessable “verdict of history” – what are the facts, and to how many decimal places? You pilot always into an unknown future; facts are your single clue. Get the facts!” ? - Robert A. Heinlein

Facts are treasonous and dangerous in an empire of lies, fraud and propaganda. It is maddening to watch the country spiral downward, driven to ruin by a psychotic predator class, while the plebs choose to remain willfully ignorant of reality and distracted by their lust for cheap Chinese crap and addicted to the cult of techno-narcissism. We are a country running on heaping doses of cognitive dissonance and normalcy bias, an irrational belief in our national exceptionalism, an absurd trust in the same banking class that destroyed the finances of the country, and a delusionary belief that with just another trillion dollars of debt we’ll be back on the exponential growth track. The American empire has been built on a foundation of cheap easily accessible oil, cheap easily accessible credit, the most powerful military machine in human history, and the purposeful transformation of citizens into consumers through the use of relentless media propaganda and a persistent decades long dumbing down of the masses through the government education system.

This national insanity is not a new phenomenon. Friedrich Nietzsche observed the same spectacle in the 19^th century.

“In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule.”

The “solutions” imposed by the supposed brightest financial Ivy League educated minds and corrupt bought off political class upon people of the United States since the Wall Street created 2008 worldwide financial collapse are insane and designed to only further enrich the crony capitalists and their banker brethren. The maniacs are ruling the asylum. John Lennon saw the writing on the wall forty five years ago.

“Our society is run by insane people for insane objectives…. I think we’re being run by maniacs for maniacal ends … and I think I’m liable to be put away as insane for expressing that. That’s what’s insane about it.” – John Lennon, Interview BBC-TV (June 22, 1968)

The world is most certainly ruled by a small group of extremely wealthy evil men who desire ever more treasure, supremacy and control, but the vast majority of Americans have stood idly by mesmerized by their iGadgets and believing buying shit they don’t need with money they don’t have is the path to happiness and prosperity, while their wealth, liberty and self-respect were stolen by the financial elite. Our idiot culture, that celebrates reality TV morons, low IQ millionaires playing children’s sports, ego-maniacal Hollywood hacks, self-promoting Wall Street financiers, and self-serving corrupt ideologue politicians, has been degenerating for decades.

“We are in the process of creating what deserves to be called the idiot culture. Not an idiot sub-culture, which every society has bubbling beneath the surface and which can provide harmless fun; but the culture itself. For the first time, the weird and the stupid and the coarse are becoming our cultural norm, even our cultural ideal.” - Carl Bernstein -1992

The examples of our national insanity are almost too vast to document, but any critical assessment of what we've done over the last one hundred years reveals the idiocy that has engulfed our collapsing empire.

As Entrepreneurs Keep Reminding Us, They Lied To Us In Econ. 101

A combination of passion and perseverance

By John Chisholm

Can theoretical, scientific study of complex systems inform the hardscrabble world of start-ups?

Yes.

To see how, meet the Santa Fe Institute (SFI). [1]  Founded 30 years ago in Santa Fe, NM by Nobel laureates in physics and economics, SFI is the worldwide epicenter of complexity science.  SFI first recognized that the environment, the human brain, the economy, and other complex systems have much in common:

·                     Order in them emerges not from top-down command and control but bottom-up from the interactions of large numbers of interconnected elements.  These elements may be individual species creating sustainable ecosystems; neurons creating thought patterns; or buyers and sellers creating business cycles and wage and price levels.

·                      Those interconnected elements also form feedback loops that can produce unpredictable and often extreme results (e.g., peacocks’ tails, fads, best-sellers, cancer).

·                     Diversity tends to grow with the number of combinations of elements, that is, exponentially with the number of elements (e.g., the Cambrian explosion and the Industrial Revolution).  Diversity tends to enhance robustness (e.g., genetically similar crops are more vulnerable to parasites; identical PC operating systems, to viruses).

·                     Unintended consequences arise if you try to control such systems top down (e.g., drug wars foster organized crime; draining of wetlands cause flash floods and droughts; rent control reduces the quantity and quality of housing and thus may drive up rents).

·                     The systems are dynamic and never at equilibrium.

So what do complex systems and SFI tell us about entrepreneurship?

Who and What Would the Syria War Be For?

The real question

By PATRICK J. BUCHANAN

Last week, hell came to the tiny Christian village of Maaloula where they still speak Aramaic, the language of Jesus.

“Rebels of the Free Syrian Army launched an assault aided by a suicide bomber from Jabhat al-Nusra,” the al-Qaida-linked Islamic terrorist group, writes the Washington Post.

The AP picked up the story:

One resident said bearded rebels shouting “God is great!” attacked Christian homes and churches. “They shot and killed people. … I saw three bodies lying in the middle of a street.”

Maaloula is now a “ghost town.” Christians left behind were told, “Either you convert to Islam or you will be beheaded.”

“Where is President Obama?” wailed a refugee. And, indeed, where is Obama?

He is out lobbying Congress for authority to attack the Syrian army that defended Maaloula as John McCain beats the drums for a Senate resolution to have the U.S. military “change the momentum” of the war to the rebels who terrorized the convent nuns of Maaloula.

If we strike Syria and break its army, what happens to 2 million Syrian Christians? Does anyone care?

Do the Saudis who have signed on to Obama’s war—but decline to fight—care? Conversion to Christianity is a capital offense in Riyadh.

Do the Turks, who look the other way as jihadist killers cross their frontier to set up al-Qaeda sanctuaries in northern Syria, care?

Do the Israelis, who have instructed AIPAC to get Congress back in line behind a war Americans do not want to fight, care about those 100,000 dead Syrians and 400 gassed children?

Here is Alon Pinkas, Israel’s former general consul in New York, giving Israel’s view of the Syrian bloodletting: “Let them both bleed, hemorrhage to death. That’s the strategic thinking here.”

According to two polls reported this weekend by the Jerusalem Post, Israelis by 7-1 do not want Israel to go to war with Syria. But two-thirds of Israelis favor the United States going to war with Syria.

Peggy Noonan writes that the debate on war on Syria “looks like a fight between the country and Washington.”

She nails it. The Washington Post, Wall Street Journal, and Weekly Standard are all up for air strikes. In the think tanks of D.C., the corridor talk is all about “On to Teheran!”

But what of the soldiers who will fight the neocons’ war? Major General Robert Scales speaks for our next generation of wounded warriors.

Our fighting men, Scales writes, “are tired of wannabe soldiers who remain enamored of bloodless machine warfare. … Today’s soldiers know war and resent civilian policymakers who want the military to fight a war that neither they nor their loved ones will experience firsthand.”

Enthusiasm for war is likely higher at Cafe Milano in Georgetown than in the mess hall at Camp LeJeune.

Why is opposition to the war surging? Because the case for war is crumbling.

U.S. credibility is on the line, we are warned.

If we do not attack Syria to punish a violation of Obama’s “red line,” no one will believe us again. Our allies will no longer have confidence that America will come over and fight their next war for them.

Yet George Bush blustered in his “axis-of-evil” State of the Union that “the world’s worst dictators” would not be allowed to get “the world’s worst weapons.”

And Kim Jong Il went out and tested an atom bomb and built an arsenal of nuclear weapons. And what did The Decider do? Nothing.

Did our alliances collapse because “W’s” bluff was called?

Should Congress really authorize a war on Syria because Hillary Clinton and Obama said “Assad must go!” and Obama said his “red line” has been crossed?

Or should Congress used this vote as a teaching tool for Baby Boomer Bismarcks by declaring:

“We are not taking our country to war because you blundered in issuing ultimata you had no authority to issue. Rather than go to war, you should admit your mistake, as real leaders do, and take responsibility.”

How many Syrians should we kill to restore the credibility of Barack Obama? How many Syrians should we kill to impress upon Iran how resolute we are? How many Syrians should we kill to reassure nervous allies that Uncle Sam will forever come fight their wars for them?

In America, before we put a man to death, we prove him guilty of murder “beyond a reasonable doubt.”

Should we not set as high a standard of proof before we kill a thousand Syrians and plunge the United States into another war?

Where is the evidence Assad ordered a gas attack? German intelligence says it intercepted orders from Assad not to use gas. Congressmen coming out of secret briefings say the case is inconclusive.

The American people do not want war on Syria, and such a war makes no sense. Who is trying to stampede Congress into war on Syria, and then on Iran—and why? Therein lies the real question. 

The Virus of Imperalism (Part II)

Salvation through Big Government

by Thomas J. DiLorenzo

After the American “Civil War,” the Republican Party, which for the succeeding half century would enjoy monopolistic political power matched only by the Bolsheviks in Russia, set about to deify Abraham Lincoln. During his own lifetime Lincoln was the most hated and reviled of all American presidents in history, as historian Larry Tagg has shown in his book, The Unpopular Mr. Lincoln: America’s Most Reviled President. Several decades of propaganda by the Republican Party and its associated lapdog media changed all of that. The deification of Lincoln led to the deification of the presidency itself, and eventually to the entire federal government.

The renowned novelist Robert Penn Warren (author of All the King’s Men) wrote in The Legacy of the Civil War that Official State Propaganda asserted that the Civil War left America with “A Treasury of Virtue” so powerful that it was henceforth assumed that anything the U.S. government did from then on was virtuous by virtue of the fact that it was the U.S. government that was doing it. All any American had to do to remind the world of “our” virtue was simply to recite a few lines from one of Lincoln’s political speeches about “the last best hope of earth,” or our alleged desire to “make all men free.”

The Official State Propaganda line was supplemented by the political clout of the “Progressives” of the late nineteenth century and early twentieth century, many of whom were postmillennial pietists. As Murray Rothbard wrote in his essay, “World War I as Fulfillment: Power and the Intellectuals,” many of these influential writers, journalists, politicians, preachers, scientists, and political activists “possessed an intense messianic belief in national and world salvation through Big Government” (emphasis added).

Woodrow Wilson was a Progressive pietist of the most extreme sort. After he delivered his “war message” on April 2, 1917, wrote Rothbard, he received a letter of congratulations from his son-in-law “and fellow . . . pietist and progressive, Secretary of the Treasury William Gibbs McAdoo.” “You have done a great thing nobly!” wrote McAdoo. “I firmly believe that it is God’s will that America should do this transcendent service for humanity throughout the world and that you are His chosen instrument.”

American foreign policy has not changed one iota to this day. It is still based on the premise that American presidents still possess that “treasury of virtue” handed down to them by “Father Abraham” himself; and that they are God’s chosen people to rule the world and remake it in their image. Or else.

The Virus of Imperialism (Part 1)

Endless Wars for Endless Peace

by Thomas J. DiLorenzo

In his famous 1898 essay, “The Conquest of the United States by Spain,” the great Yale University libertarian scholar William Graham Sumner argued that America had crossed the Rubicon, so to speak, and had become an imperialistic empire. It had become the Spanish empire. But Sumner was only half right. The conquest of Cubawas an imperialistic war, but so were all other American military adventures since the American Revolution. Apparently, even a man as brilliant and astute as Sumner was somewhat befogged by the endless and pervasive drumbeat of war propaganda.

“War is the health of the state,” Randolph Bourne explained in his famous essay of that title. But to the average citizen war means heavy taxation, conscription, censorship, dictatorship, and death. War enriches the state like nothing else can, while impoverishing, enslaving, and ending the lives of many of its citizens. Hence lies, myths, superstitions, and propaganda have always been the essential ingredient of the warfare state. Without them, the public would never acquiesce in the never-ending wars of conquest and imperialism that have long characterized the American state.

The War of 1812

Barely twenty years after the U.S. Constitution was ratified there arose quite a few American politicians who believed it was their “manifest destiny” to invade and conquer Canada. One of the congressional leaders of the early nineteenth-century war party, Henry Clay, celebrated the declaration of war against Great Britain on June 4, 1812, by declaring that “Every patriot bosom must throb with anxious solicitude for the result. Every patriot arm will assist in making that result conducive to the glory of our beloved country” (David and Jeane Heidler, Henry Clay: The Essential American, p. 98).

Among the “official reasons” for the invasion of Canada in 1812 were the alleged “impressment” of American sailors by the British government, but that had been going on for decades, as Justin Raimondo has pointed out. The tall tale was also broadcast that the “evil” British were encouraging Indians to attack American settlers. The real reason for the War of 1812, however, was an impulse to grow the state with an imperialistic war of conquest. The result of the war was a disaster — the British burned down the White House, the Library of Congress, and much of Washington, D.C. Americans were saddled with a huge war debt that was used as an excuse to resurrect the corrupt and economically destabilizing Bank of the United States, a precursor of the Fed.

The Mexican-American War

When James K. Polk became president in 1845 he announced to his cabinet that one of his chief objectives was to acquire California, which was then a part of Mexico. As he wrote in his diary, “I stated to the cabinet that up to this time as they knew, we had herd of no open act of aggression by the Mexican army, but that the danger was imminent that such acts would be committed. I said that in my opinion we had ample cause of war.”

A fear of Free and Frank Discussion

Branding one's political opponents as 'phobic' is a sly and illiberal tactic

By FRANK FUREDI

Poor Stephen Fry. Over the years he has been cavalier about condemning certain people as homophobic. As a consummate practitioner of the art of emotional correctness, he knows that the charge of phobia – whether homophobia, Islamophobia, Judaeophobia, xenophobia and even Europhobia (hatred of the EU) – rings all the right bells.

Yet now he finds himself on the receiving end of the phobia slur - and he isn’t happy about it. He’s been accused of being nothing less than an ‘Islamophobe’, after he defended the anti-religious crusader Richard Dawkins’ stupid remarks on Twitter regarding Islam’s undistinguished historical role.

‘Am I an Islamophobe?’, asked Fry in his cringing defence of the right to criticise what he called ‘Islamofascism’. Depicting himself as a lonely liberal valiantly fighting for unpopular causes, he lamented that the ‘squeezed liberal finds himself in the position that cannot criticise Islamofascism because it’s somehow “racist”’.

Unfortunately, Fry is very selective indeed in his defence of the right to criticise beliefs and practices that one abhors. For this squeezed liberal has no inhibitions about denouncing critics of gay marriage as homophobes. Just as some dogmatic commentators insist on equating the questioning of Islam with Islamophobia, so many defenders of the gay-marriage consensus cannot imagine that their opponents might just have some genuine intellectual or moral criticisms of gay marriage.

Allegations and counter-allegations of ‘phobia!’ point to a disturbing development in the public life of Western societies. The ascendancy of the metaphor of phobia is inversely proportional to the depoliticisation of certain views and outlooks. For example, the displacement of the term anti-Semitism by Judaeophobia represents the supplanting of a political category (hatred of Jews) with a psychological one (irrational fear of Jewish stuff). Similarly, through the narrative of Islamophobia, prejudice against Muslim people is depoliticised and turned into a medical problem. 

As is the case with all medical diagnoses, accusing someone of being phobic is really to make a statement about that person’s mental and moral condition. So the diagnosis of homophobia or Islamophobia is not so much a comment on the content of what has been said, as it is a verdict about the psychological deficits of the guilty, phobia-suffering party. When Fry protested his innocence of the charge of Islamophobia, he was in effect rejecting its implied psychological slur.

The rise of the narrative of phobia reflects the increasing influence of the therapeutic culture, which tends to interpret conflict and troublesome behaviour through the medium of psychology. In our therapeutic era, emotional dysfunctions are frequently depicted as the cause of social problems. Unprocessed or unmanaged emotions are said to be the source of many of the ills that afflict society. Even wars between nations are now attributed to some emotional or psychological defect on the part of a group or leader. The early twentieth-century term xenophobia is no longer simply a descriptive term; rather, it is a therapeutic diagnosis.

The irrational fears associated with all these so-called phobias are said to be just a few of the many emotional disorders that dominate life today. The diagnosis of phobia is a central part of a therapeutic worldview which looks upon stress, rage, trauma, low self-esteem and addiction as dominant features of the human experience.

The therapeutic worldview is not just about medicalising individuals and our behaviour. It also tries to provide a system of meaning through which human experience might be interpreted and understood. In the twenty-first century, meaning is increasingly sought in the realm and idiom of emotions. Through the policing of emotions, some attitudes are condemned as negative and others held up as positive. So hate is a negative and happiness a positive emotion. The range of emotions which fuel a ‘phobia’ are all diagnosed as negative, which is why this sentiment can be so readily pathologised.

Today’s meshing together of moral and medical categories makes it very difficult to have a mature and tolerant exchange of opinions. The labelling of someone’s speech, attitudes or behaviour as a phobia shuts down discussion. It is not possible to have a genuine, substantive debate or disagreement with someone who is diagnosed as phobic - after all, there is little point in taking the arguments of irrational and psychologically disturbed individuals seriously. Apparently, such people don’t have rational political views; they are simply possessed of an irrational mental condition.

So the narrative of phobia absolves people of the tough task of defending their views through debate, by inviting them to medicalise their opponents and in the process close down discussion. The medicalisation of political opponents represents a kind of existential annihilation of those we disagree with. Diagnosed as irrational or ill, they can be safely ignored; their opinions can be treated as symptoms of a mental disorder, which we don’t have to take seriously.

The authoritarian implications of this resorting to psychological demonisation are clear if we think back to Stalin’s Russia. There, dissidents were sometimes incarcerated in mental-health institutions. Today in the West, phobic individuals are not incarcerated, of course. But they do face cultural and institutional stigmatisation. How long before ‘phobics’ are encouraged to participate in anger-management classes or pressurised to have their awareness raised?

The dehumanising premise behind the narrative of phobia, the systematic refusal to take seriously the mental capacities of one’s opponents, is the apotheosis of closed-mindedness. When people refuse to submit their arguments to full public scrutiny, on the basis that anyone who tries to knock them down is a ‘hater’ or ‘phobic’, then issues are rarely clarified and truth remains obscured. What we end up with is debatephobia.

No, Stephen Fry and his mate Richard Dawkins do not suffer from Islamophobia. They are, to use an old-fashioned political expression, just utterly wrong.

Australia's Rejection Of Kevin Rudd May Foretell Political Change In The U.S.

The English speaking peoples tend to move in a sort of partial political sync with one another

By Jerry Bowyer

With the victory of the Tony Abbott led conservatives in Australia, we can see that the Anglosphere is now post progressive. The English speaking nations of the world: England, New Zealand, Canada and now Australia are governed by conservatives. America stands apart from them as the sole remaining major leftist-governed power in the Anglo world.

If you’d like to throw India into the mix too, you find Manmohan Singh, who is pushing to deregulate foreign investment markets and has just appointed a monetary hawk, Raghuram Rajan, as the new head of the Reserve Bank of India. Canada entirely skipped the recent wave of progressivism which swept the Anglosphere, and under PM Stephen Harper has surpassed the United States in economic freedom. Our northern neighbor is now listed by both the Heritage Foundation’s Index of Economic Freedom and the Fraser Institute’s Economic Freedom of the World as the most economically free nation in North America. Harper has been particularly diligent in cutting corporate taxes while the U.S. now has the highest corporate tax rates in the developed world.

England rejected the hard-core labourite policies of Gordon Brown, putting the Tory David Cameron in power. New Zealand has a center right government in power as well. The English speaking peoples (to borrow Winston’s Churchill’s evocative phrase) tend to move in a sort of partial political sync with one another. Thatcher paved the way for Reagan, preceding him, anticipating him and inspiring him. Then we see the near simultaneous rise of Blair and Clinton, then the later hawkish Blair corresponds with Bush. Brown and Obama moved both their countries hard left in step with one another. And as of last year, England moved right under Cameron. In Australia, John Howard allied with and paralleled with his friend Bush, Russ/Gilliard tracked with Obama.

And in what could herald yet another political shift, this time back to the right, Australia just handed a decisive victory to the Liberal National Party (the Australian conservative party), and a decisive defeat to the incumbent Labour Party under Kevin Rudd. Why?

Letters and secret files reveal the tormented life of Lina Prokofiev

New book on Soviet composer's family will show how his wife was abandoned, tortured by Stalin's police and sent to the gulag

Lina Prokofiev in Moscow in 1936 with her sons Oleg, centre, and Svyatoslav. 

By Dalya Alberge

She endured an abusive husband who likened her to "an infected tooth", and torture by Stalin's secret police, who stuck needles in her, threatened her children and drove her to the brink of madness. The tragic life of the wife of Sergei Prokofiev, one of the 20th century's greatest composers, is now revealed in hundreds of previously unpublished letters, as well as secret Soviet files.

The cruelty suffered by Lina Prokofiev at home paled against her later torture, but she never stopped loving her husband – even when he abandoned her for another woman – and she never spoke publicly of her suffering during eight years in a Siberian prison camp.

Prokofiev (1891-1953) is the composer of masterpieces such as the opera War and Peace, the ballet Romeo and Juliet and the children's fable, Peter and the Wolf. But when Simon Morrison, a British-born music professor at Princeton University and president of the Prokofiev Foundation, was given access to the unpublished documents by Prokofiev's family for a new book, he was shocked by their contents. They revealed "a real indictment of his personality", he told theObserver. "I have a moral question. Prokofiev's music is some of the most emotional of the 20th century, but he was a person of very little feeling. As a biographer, you have responsibilities. As a listener, I don't think I can listen to the music the same way again. It is a harrowing story." Letters from Lina to her children from the gulag are equally poignant, he added.

The 600 letters – whose contents are to be published on 21 March by Harvill Secker in The Love and Wars of Lina Prokofiev – were made available to Morrison by Prokofiev's older son, Svyatoslav, whose "dying wish was for his mother's story to be told in unvarnished guise".