Game of Thrones – European Style

Winter Is Coming

BY JOHN MAULDIN

In 2009-10 it seemed like this letter was all Europe all the time. There was a never-ending crisis from one corner of the Continent to the other. That time seems to have slowly faded from our collective consciousness, but the Eurozone crisis is not over, and it will not end quickly or soon. Even if it seems to unfold in slow motion – like the slow build-up in a Game of Thrones storyline to violent internecine clashes followed by more slow plot developments but never any real resolution, the Eurozone debacle has never really gone away. The structural imbalances have still not been fixed; politicians and central bankers have still not agreed to solve major fiscal problems; the overall economy still disintegrates; unemployment is staggeringly high in some countries and still rising; and the people are growing restless.

Just as in the Game of Thrones, the Eurozone drama seems to drag on interminably. It seems to take forever to get to the next installment. I think GRR Martin (the wickedly brilliant creator of the series) should be confined to his Santa Fe villa until he finishes his epic – one of the few lapses in my personal belief that we should be allowed the freedom to control our own time. I read the first of the books in 1996 and the fifth when it came out in 2011, and he will need to finish at least two more. You can do the math, but it is clearly taking longer and longer between books – just as Europe seems to be taking longer and longer between successive peaks of its crisis. Perhaps we should confine the leaders of Europe to a far-northern Scandinavian hotel with hard beds and minimal amenities until they resolve their problems.

In the latest installment of the Eurozone crisis, deflation is back and winter is coming. This week we'll look at what is shaping up to be a very interesting year in Europe. I am going to visit a number of themes and offer links to readers who want to delve more deeply, as to develop each one would take several months' worth of letters. Next year it probably shall.

One of the continuing themes in the Game of Thrones is that a winter of epic proportions looms in the immediate future, and the world is not prepared for it. "Winter is coming" is whispered by worried wise men who urge various leaders to prepare, yet they put off the necessary in the face of the urgent. Signs that a European winter, too, is coming have lately been cropping up.

Key measures of inflation are decelerating across the Eurozone, and the region is as close as it has ever been to a deflationary bust. It's troubling enough that Eurozone headline CPI collapsed from 1.1% in August to 0.7% in September and that core CPI fell from 1.0% to 0.8% over the same period; but measures of Eurozone money supply (M1, M2, & M3) are also decelerating rapidly, suggesting that the deflationary trend will most likely continue without decisive action from the ECB, which has been strangely absent from the current rush by central bankers to print mountains of money. And the ECB could actually make a case for such action!

Even worse, this new round of borderline deflationary data is coming not just from a small number of lost causes like Greece or Cyprus. Ten out of the seventeen Eurozone countries experienced rapidly decelerating inflation rates over the past few months, including Italy and France. Spain officially fell into deflation for the first time since February 2010. In many ways, the situation is even worse than the CPI numbers suggest. Note that Italy, France, and Germany all hover barely above 1% inflation. And their numbers are falling.

There are two major problems associated with an extended period of ultra-low inflation or deflation in the Eurozone. First, peripheral countries will have a much harder time servicing and retiring their debts without the extra boost to nominal GDP that positive inflation provides. Even if you are working on lowering the absolute amount of your debt, it is impossible to improve your debt-to-GDP ratio when GDP is falling and your debts are growing. Moreover, outright deflation works to crush debtors (and debtor nations) by increasing the real weight of the debt and triggering the destructive debt-deflation cycle described in Irving Fisher's Debt Deflation Theory of Great Depressions(1933).

Confessions of a Quantitative Easer

We went on a bond-buying spree that was supposed to help Main Street. Instead, it was a feast for Wall Street.

By ANDREW HUSZAR

I can only say: I'm sorry, America. As a former Federal Reserve official, I was responsible for executing the centerpiece program of the Fed's first plunge into the bond-buying experiment known as quantitative easing. The central bank continues to spin QE as a tool for helping Main Street. But I've come to recognize the program for what it really is: the greatest backdoor Wall Street bailout of all time.

Five years ago this month, on Black Friday, the Fed launched an unprecedented shopping spree. By that point in the financial crisis, Congress had already passed legislation, the Troubled Asset Relief Program, to halt the U.S. banking system's free fall. Beyond Wall Street, though, the economic pain was still soaring. In the last three months of 2008 alone, almost two million Americans would lose their jobs.

The Fed said it wanted to help—through a new program of massive bond purchases. There were secondary goals, but Chairman Ben Bernanke made clear that the Fed's central motivation was to "affect credit conditions for households and businesses": to drive down the cost of credit so that more Americans hurting from the tanking economy could use it to weather the downturn. For this reason, he originally called the initiative "credit easing."

My part of the story began a few months later. Having been at the Fed for seven years, until early 2008, I was working on Wall Street in spring 2009 when I got an unexpected phone call. Would I come back to work on the Fed's trading floor? The job: managing what was at the heart of QE's bond-buying spree—a wild attempt to buy $1.25 trillion in mortgage bonds in 12 months. Incredibly, the Fed was calling to ask if I wanted to quarterback the largest economic stimulus in U.S. history.

This was a dream job, but I hesitated. And it wasn't just nervousness about taking on such responsibility. I had left the Fed out of frustration, having witnessed the institution deferring more and more to Wall Street. Independence is at the heart of any central bank's credibility, and I had come to believe that the Fed's independence was eroding. Senior Fed officials, though, were publicly acknowledging mistakes and several of those officials emphasized to me how committed they were to a major Wall Street revamp. I could also see that they desperately needed reinforcements. I took a leap of faith.

In its almost 100-year history, the Fed had never bought one mortgage bond. Now my program was buying so many each day through active, unscripted trading that we constantly risked driving bond prices too high and crashing global confidence in key financial markets. We were working feverishly to preserve the impression that the Fed knew what it was doing.

It wasn't long before my old doubts resurfaced. Despite the Fed's rhetoric, my program wasn't helping to make credit any more accessible for the average American. The banks were only issuing fewer and fewer loans. More insidiously, whatever credit they were extending wasn't getting much cheaper. QE may have been driving down the wholesale cost for banks to make loans, but Wall Street was pocketing most of the extra cash.

The End of the Political Party

Plans to rebrand the Conservatives reveal the shallowness of party politics

By TIM BLACK

And so the Conservative Party’s efforts not to be the Conservative Party anymore continue. Following in the footsteps of Tory MSP Murdo Fraser, who suggested quasi-independence and a new name for the voter-repellent Scottish Conservative Party in 2011, Conservative local government and planning minister Nick Boles has suggested an equally cunning plan to attract those people to the Conservative Party who don’t like anything about the Conservative Party: set up a new party.

It’s not a completely new party. In fact, Boles’ suggestion, the National Liberal Party (which existed between 1931 and 1968), is an old adjunct of the Tories proper. Still, its function would be very much of this era: to ‘detoxify the Tory brand’.

Speaking to Westminster Tory discussion group, Bright Blue, this is how Boles justified reviving the NLP: ‘The Conservative Party will only rebuild itself as a national party which can win majorities on its own if it understands that it cannot do so by making a single undifferentiated pitch to every age group and in every part of the country… We could use [the NLP] to recruit new supporters who might initially balk at the idea of calling themselves Conservative.’

It’s an absurd, slightly disconcerting ploy, but the very fact that a Tory minister offered it up as a viable plan reveals much about the husk-like condition of Britain’s main parties - despite Tory leader and prime minister David Cameron dismissing the idea. Because what Boles highlights is how the political party, an institution, in the Tories’ case, built on hundreds of years of tradition and political struggle, is ceasing to be a political party at all. That is, even for the politicians themselves, the political party is no longer an embodiment of a set of ideas, a vision of how things ought to be given organisational form. In fact, the party in Boles’ telling doesn’t seem to be much at all. Rather, it is at most an electoral brand to be stamped on to a section of the political class, much as commercial logos are stamped on to bags of dried pasta.

Turkey pushes crossroads politics

It's all about Pipelineistan 

By Pepe Escobar 
While everyone is concentrated on the possibility of a tectonic shift in US-Iran relations, and while a solution may be found for the Syrian tragedy in another upcoming set of negotiations in Geneva, Turkey is silently toiling in the background. Let's see what these sultans of swing are up to. 

We start on the internal front. Abdul Mejid I, the 31st Ottoman sultan (in power from 1839 to 1861) always dreamed of a submerged tunnel under the Bosphorus linking Europe to Asia. 

It took "Sultan" Erdogan, as in Prime Minister Recep Tayyip Erdogan, to make it happen, when last month he inaugurated – on the 90th anniversary of the founding of Ataturk's Republic - the US$3 billion, 76-kilometer Marmaray rail system which, in the hardly hyperbolic words of Mustafa Kara, mayor of Istanbul's Uskudar district (where the tunnel comes out), will "eventually link London to Beijing, creating unimagined global connections". [1] 

It certainly helps that this technological marvel fits right into China's extremely ambitious New Silk Road(s) strategy which, just like the original Silk Road, starts in Xian, and aims to cross to Europe via, where else, Istanbul. [2] 

So the fact remains that "Sultan" Erdogan simply has not been downed by the Gezi Park protests last June. All the ruling party AKP's mega-projects - supported by millions in rural Anatolia, ignored for decades by the secular elites in Istanbul - are alive and kicking. 
By 2025, more than a million commuters will be using the Marmaray. The third Bosphorus bridge, close to the Black Sea, is being built - despite Alevi fury that it will be named after Selim The Grim, a sultan who ordered the slaughter of thousands of Alevis. Same for the new six-runway airport northwest of Istanbul. And then there's the 50 km "crazy canal" (Erdogan's own definition), linking the Sea of Marmara to the Black Sea, so monstrous tanker traffic may be diverted away from the Bosphorus. The Turkish green movement insists this could destroy whole aquatic ecosystems, but Erdogan is unfazed.

Mexico’s Growing Middle Class

There’s a lot to be excited about in Mexico

Mexico’s economy sputtered earlier this year, but a recovery—however anemic—is on the way, and as the NYT reports, the country is seeing promising signs for growing its middle class:

After the free-market wave of the 1990s failed to produce much more than low-skilled factory work, Mexico is finally attracting the higher-end industries that experts say could lead to lasting prosperity. Here, in [Guanajuato, Mexico,] a mostly poor state long known as one of the country’s main sources of illegal immigrants to the United States, a new Mexico has begun to emerge.

Dozens of foreign companies are investing, filling in new industrial parks along the highways. Middle-class housing is popping up in former watermelon fields, and new universities are waving in classes of students eager to study engineering, aeronautics and biotechnology, signaling a growing confidence in Mexico’s economic future and what many see as the imported meritocracy of international business. In a country where connections and corruption are still common tools of enrichment, many people here are beginning to believe they can get ahead through study and hard work.

So often, the media coverage we see of Mexico ignores the solid but less sensational progress our southern neighbor is making in favor of salacious, bloody stories of a country torn apart by a prolonged drug war. The widespread violence remains a huge problem for Mexican President Enrique Peña Nieto, but unlike his predecessor Nieto seems willing to tackle many of the other problems Mexico faces. He pushed through education reform, is working to restructure the nation’s telecoms industry, and maybe most importantly is in the process of securing reforms to the nation’s constitution to bring private, foreign investment into the country’s energy resources.

Mexico has tremendous potential—the CEO of the country’s state-owned oil company predicted his country could be the “new Middle East,” and cheap energy could mold it into a manufacturing powerhouse. There’s a lot to be excited about in Mexico, and for the US, having a stronger, stabler southern neighbor is a welcome change, too.

Lee Harvey Oswald, Disappointed Revolutionary

Oswald's time in the Soviet Union shows that he was a troubled soul, capable of killing the president all by himself

By PETER SAVODNIK

On the morning of Jan. 7, 1960, Lee Harvey Oswald boarded a train in Moscow heading west. That evening, he arrived in Minsk, in the Belorussian Soviet Socialist Republic. He had just a few things: a change of clothes, a diary, a copy of Fyodor Dostoevsky's "The Idiot," which the KGB had given him for his 20th birthday. He was exuberant. In Minsk, he expected to build a new life and to escape his past—his mother, Texas, the Marines. He had written a letter to his mother and his brother, Robert, telling them to forget him. "I do not wish to [ever] contact you again," he wrote. "I am beginning a new life, and I don't want any part of the old."

Oswald's Russian foray was a failure, of course. Two-and-a-half years after turning up in Minsk, he and his wife, Marina, and their baby, June, left the Soviet Union. He had hoped to join the revolution, but there was no revolution to join. Long before he arrived, it had been snuffed out by the Gulag, the purges, the war. It had been eclipsed by a new craving for stability and single-family apartments and television sets. He returned to the U.S. in June 1962 more alienated than he had ever been. Seventeen months later, he murdered John F. Kennedy —a national trauma whose 50th anniversary we mark next month.

Today, when we talk about Lee Harvey Oswald, he is usually portrayed as a cog in the detective story surrounding Kennedy's assassination. He is viewed not as a three-dimensional character in a Shakespearean tragedy—which he was—but as an instrument whose actions were orchestrated by others: the mob, the CIA, Fidel Castro, the KGB. We seem mostly uninterested in the meaning of Oswald and much more concerned with the supposedly dark and clandestine forces behind him.

But a closer look at Oswald's life—his history, his personality, the relationships he forged, the fragmented political tracts he wrote—makes it abundantly clear that he was capable of killing the president all by himself. If we focus on his Soviet period, the most important chapter in his truncated, 24-year life, it is possible to piece together a more complete picture of Oswald.

None Dare Call it Prostitution

About Roses and Thorns

by Theodore Dalrymple

Reading recently a monograph about the lives of heroin addicts in preparation for an article about addiction I had been commissioned to write, I came across a couple of comparatively new locutions that irritate me: sex work and sex worker. What is meant by these, of course, is prostitution and prostitute. (Female heroin addicts are often prostitutes as well as addicts.) In the Anglo-Saxon world at least, there seems to be a law of the conservation of prudery: If we are not prudish about one thing, we are prudish about another, the total amount of prudery remaining constant. 

Medical journals now use these locutions as a matter of course, and since English is now the sole language of medicine and science, we spread our prudery with the same self-righteousness and moral rectitude as that for which missionaries were once famous—or infamous. 

The new locutions, obligatory in the polite company of the politically correct, are not only prudish but are instances of magical thinking. Those who insist upon their use think that by changing the word they will change the thing. For them, the problem with prostitution is not the phenomenon in itself and all that hitherto has inevitably surrounded it, but the stigma that attaches to it. And this, they think, can be eliminated, or at least reduced, by a change in nomenclature. For them a rose would not smell as sweet by any other name, nor would a skunk smell as bad by some other name.

Not only is the world more intractable than this supposes, but if prostitution were really no different from, say, nursing or teaching as a profession, it would not be an activity whose name the righteous reformers of the world dared not pronounce.

When political correctness trumps human lives

A very dangerous game

By Thomas Sowell

New York City police authorities are investigating a series of unprovoked physical attacks in public places on people who are Jewish, in the form of what is called "the knockout game."

The way the game is played, one of a number of young blacks decides to show that he can knock down some stranger on the streets, preferably with one punch, as they pass by. Often some other member of the group records the event, so that a video of that "achievement" is put on the Internet, to be celebrated.

The New York authorities describe a recent series of such attacks and, because Jews have been singled out in these attacks, are considering prosecuting these assaults as "hate crimes."

Many aspects of these crimes are extremely painful to think about, including the fact that responsible authorities in New York seem to have been caught by surprise, even though this "knockout game" has been played for years by young black gangs in other cities and other states, against people besides Jews -- the victims being either whites in general or people of Asian ancestry.

Attacks of this sort have been rampant in St. Louis. But they have also occurred in Massachusetts, Wisconsin and elsewhere. In Illinois the game has often been called "Polar Bear Hunting" by the young thugs, presumably because the targets are white. The main reason for many people's surprise is that the mainstream media have usually suppressed news about the "knockout game" or about other and larger forms of similar orchestrated racial violence in dozens of cities in every region of the country. Sometimes the attacks are reported, but only as isolated attacks by unspecified "teens" or "young people" against unspecified victims, without any reference to the racial makeup of the attackers or the victims -- and with no mention of racial epithets by the young hoodlums exulting in their own "achievement."

Despite such pious phrases as "troubled youths," the attackers are often in a merry, festive mood. In a sustained mass attack in Milwaukee, going far beyond the dimensions of a passing "knockout game," the attackers were laughing and eating chips, as if it were a picnic. One of them observed casually, "white girl bleed a lot."

That phrase -- "White Girl Bleed A Lot" -- is also the title of a book by Colin Flaherty, which documents both the racial attacks across the nation and the media attempts to cover them up, as well as the local political and police officials who try to say that race had nothing to do with these attacks.

Chapter 2 of the 2013 edition is titled, "The Knockout Game, St. Louis Style." So this is nothing new, however new it may be to some in New York, thanks to the media's political correctness.

Nor is this game just a passing prank. People have been beaten unconscious, both in this game and in the wider orchestrated racial attacks. Some of these victims have been permanently disabled and some have died from their injuries.

But most of the media see no evil, hear no evil and speak no evil. In such an atmosphere, the evil not only persists but grows.

Some in the media, as well as in politics, may think that they are trying to avoid provoking a race war by ignoring or playing down these attacks. But the way to prevent a race war is by stopping these attacks, not trying to sanitize them.

If these attacks continue, and continue to grow, more and more people are going to know about them, regardless of the media or the politicians.

Responsible people of all races need to support a crackdown on these attacks, which can provoke a white backlash that can escalate into a race war. But political expediency leads in the opposite direction.

What is politically expedient is to do what Attorney General Eric Holder is doing -- launch campaigns against schools that discipline a "disproportionate" number of black male students. New York City's newly elected liberal mayor is expected to put a stop to police "stop and frisk" policies that have reduced the murder rate to one-fourth of what it was under liberal mayors of the past.

Apparently political correctness trumps human lives.

Providing cover for hoodlums is a disservice to everybody, including members of every race, and even the hoodlums themselves. Better that they should be suppressed and punished now, rather than continue on a path that is likely to lead to prison, or even to the execution chamber. 

Wealth Destruction Is Hidden By Government Debt

Bad debts were shifted from the private to the public sector, but they did not disappear

by Philipp Bagus

Still unnoticed by a large part of the population is that we have been living through a period of relative impoverishment. Money has been squandered in welfare spending, bailing out banks or even — as in Europe — of fellow governments. But many people still do not feel the pain.

However, malinvestments have destroyed an immense amount of real wealth. Government spending for welfare programs and military ventures has caused increasing public debts and deficits in the Western world. These debts will never be paid back in real terms.

The welfare-warfare state is the biggest malinvestment today. It does not satisfy the preferences of freely interacting individuals and would be liquidated immediately if it were not continuously propped up by taxpayer money collected under the threat of violence.

Another source of malinvestment has been the business cycle triggered by the credit expansion of the semi-public fractional reserve banking system. After the financial crisis of 2008, malinvestments were only partially liquidated. The investors that had financed the malinvestments such as overextended car producers and mortgage lenders were bailed out by governments; be it directly through capital infusions or indirectly through subsidies and public works. The bursting of the housing bubble caused losses for the banking system, but the banking system did not assume these losses in full because it was bailed out by governments worldwide.Consequently, bad debts were shifted from the private to the public sector, but they did not disappear. In time, new bad debts were created through an increase in public welfare spending such as unemployment benefits and a myriad of “stimulus” programs. Government debt exploded.

In other words, the losses resulting from the malinvestments of the past cycle have been shifted to an important degree onto the balance sheets of governments and their central banks. Neither the original investors, nor bank shareholders, nor bank creditors, nor holders of public debt have assumed these losses. Shifting bad debts around cannot recreate the lost wealth, however, and the debt remains.

The Dark Heart Of Centralized Power

This pathology is not the result of individual psychology or character; it is the result of centralized, concentrated power itself.

by Charles Hugh-Smith

It's little wonder so many sociopaths end up in positions of power: power attracts the ruthless unencumbered by empathy.No wonder the phrase pathology of power resonates: The Federal Reserve and the Pathology of Power (November 18, 2010).

There is an ontological darkness in centralized power, and it flows from the disconnect between authority, responsibility and consequence. A leader with vast centralized powers--a president, an emperor, a dictator--has the authority to send young citizens into combat in distant lands, but he does not carry an equal responsibility to ensure their lives are not lost in the vain glories of Empire. The consequences of his decisions do not fall on him; he is far from the combat and the loosed dogs of war. His concern is the domestic political squabbles of the Elites who support his centralized power.

All centralized power carries the same pathology: those with the authority are never exposed to the consequences of their authority, nor do they have any responsibility for the consequences. The president who launches an unwinnable war that chews up the nation's youth and treasure leaves office to fund-raise for his self-glorification, i.e. a presidential library.

The CEO whose strategies fail to revive the corporation and indeed send it to the brink of insolvency leaves with a "golden parachute" worth tens of millions of dollars.

This pathology is not the result of individual psychology or character; it is the result of centralized, concentrated power itself. Giving any individual or small group this kind of power--over war, over the nation's money and credit, over its healthcare--distorts the field of perception; even people who were once non-pathological become pathological once power takes hold of their being. Soon they believe they have god-like powers to "fix things;" indeed, they feel a responsibility to wield their god-like powers "to do whatever it takes."

But since there is no personal consequence of their rash policies, nor any responsibility for the devastation their powers unleash, the power becomes pathological.

Knockouts High and Low

Without self-restraint, we slip toward barbarism

By  Mark Steyn

On November 22, 1963, two other notable men died, and got relegated to the foot of page 37 — the British authors C. S. Lewis and Aldous Huxley. Lewis endures because of the Narnia books (and films), but there’s a lot more in the back of his wardrobe. In his book The Abolition of Man, he writes of “men without chests” — the chest being “the indispensable liaison” between the head and the gut, between “cerebral man” and “visceral man.” In the chest beat what Lewis calls “the trained emotions.” Without them there is no honor or virtue, but only “intellect” and/or “appetite.”

Speaking of appetite, have you played the “Knockout” game yet? Groups of black youths roam the streets looking for a solitary pedestrian, preferably white (hence the alternate name “polar-bearing”) but Asian or Hispanic will do. The trick is to knock him to the ground with a single punch. There’s a virtually limitless supply of targets: In New York, a 78-year-old woman was selected, and went down nice and easy, as near-octogenarian biddies tend to when sucker-punched. But, when you’re really rockin’, you can not only floor the unsuspecting sucker but kill him: That’s what happened to 46-year-old Ralph Santiago of Hoboken, N.J., whose head was slammed into an iron fence, whereupon he slumped to the sidewalk with his neck broken. And anyway the one-punch rule is flexible: In upstate New York, a 13-year-old boy socked 51-year-old Michael Daniels but with insufficient juice to down him. So his buddy threw a bonus punch, and the guy died from cerebral bleeding. Widely available video exists of almost all Knockout incidents, since the really cool thing is to have your buddies film it and upload it to YouTube. And it’s so simple to do in an age when every moronic savage has his own “smart phone.”

There’s no economic motive. The 78-year-old in New York was laden with bags from department stores, but none were touched. You slug an elderly widow not for the 50 bucks in her purse but for the satisfaction of seeing her hit the pavement. In response, some commentators are calling for these attacks to be recategorized: As things stand, if white youths target a black guy it’s a hate crime, but vice versa is merely common assault. I doubt this would make very much difference. “No justification of virtue will enable a man to be virtuous,” wrote Lewis — and, likewise, no law can prevent a thug punching an old lady to the ground if the thug is minded to. “A society’s first line of defense is not the law but customs, traditions, and moral values,” wrote Professor Walter Williams a few years ago. “They include important thou-shalt-nots such as shalt not murder, shalt not steal, shalt not lie and cheat, but they also include all those courtesies one might call ladylike and gentlemanly conduct. Policemen and laws can never replace these restraints on personal conduct.”

Restraint is an unfashionable concept these day, but it is the indispensable feature of civilized society. To paraphrase my compatriot George Jonas, punching a spinster’s lights out isn’t wrong because it’s illegal, it’s illegal because it’s wrong. But, in a world without restraints, what’s to stop you? If a certain percentage of your population feels no moral revulsion at randomly pulverizing fellow citizens for sport, a million laws will avail you naught: The societal safety lock is off.

The Wahhabi-Likudnik war of terror

The strange new axis

By Pepe Escobar 
The double suicide bombing targeting the Iranian embassy in Beirut - with at least 23 people killed and 170 wounded - was a de facto terror attack happening on 11/19. Numerology-wise, naturally 9/11 comes to mind; and so the case of the Washington-declared war on terror metastasizing - largely conducted by oozy forms of Saudi "intelligence". 
Yet don't expect the "West" to condemn this as terror. Look at the headlines; it's all normalized as "blasts" - as if children were playing with firecrackers.
Whether carried out by a hazy al-Qaeda-linked brigade or by Saudi spy chief Bandar bin Sultan's (aka Bandar Bush's) goons, the Beirut terror attack is essentially configured as a major, Saudi-enabled provocation. The larger Saudi agenda in Syria implies getting both Hezbollah and Iran to be pinned down inside Lebanon as well. If that happens, Israel also wins. Once again, here's another graphic illustration of the Likudnik House of Saud in action. 
Nuance also applies. Bandar Bush's strategy, coordinated with jihadis, was to virtually beg for Hezbollah to fight inside Syria. When Hezbollah obliged, with only a few hundred fighters, the jihadis scurried away from the battlefield to implement plan B: blowing up innocent women and children in the streets of Lebanon. 
While Hezbollah welcomes the fight, wherever it takes place, Tehran's position is more cautious. It does not want to go all out against the Saudis - at least for now, with the crucial nuclear negotiation on the table in Geneva, and (still) the possibility of a Geneva II regarding Syria. Yet the House of Saud is not welcoming Geneva II anytime soon because it has absolutely nothing to propose except regime change. 
On Syria, the main pillar of Bandar Bush's strategy is to turn the previously "Free" Syrian Army into a "national army" of 30,000 or so fully weaponized hardcore fighters - mostly supplied by the "Army of Islam", which is nothing but a cipher for the al-Qaedesque Jabhat al-Nusra. King Playstation of Jordan, also known as Abdullah, collaborates as the provider of training camps near the Syrian border. Whatever happens, one thing is certain; expect Bandar Bush's goons to be carrying out more suicide bombings on both Lebanon and Syria. 

Xi's power grab dwarfs market reforms

Urge for control Vs people's desire to liberate their production forces

By Willy Lam 
While the recent Third Plenary Session of the 18th Chinese Communist Party (CCP) Central Committee was expected to unveil major initiatives in economic liberalization, what has struck Chinese and foreign observers most is the weight that the leadership has given to enhancing state security, particularly centralizing powers in the top echelon of the party-state apparatus. 

The plenum set up a National Security Committee (NSC) to better coordinate the work of departments handling functions that range from police and counter-espionage to the media and foreign affairs. 

Given that apart from the NSC, President Xi will most likely also head a newly established Leading Group on the Comprehensive Deepening of Reform, the already formidable powers of the party General Secretary and Commander-in-Chief will be augmented further. 

A paragraph in the plenum communique, which was released on November 12, said that the NSC was set up to "perfect the structure of state security and national-security strategies, so as to [better] safeguard national security". 

"We must improve the ways of social governance, stimulate the energy of social organizations and bring about innovation of systems to effectively prevent and end social contradictions and improve public security," the document added. 

While the official media has given scant details about the NSC, it is expected to be a state organ whose status is on par with commissions and leading groups - such as the Central Military Commission and the Leading Group on Foreign Affairs (LGFA), which are also headed by Xi - that report directly to the Politburo Standing Committee (PBSC), China's highest ruling council. 

In his explanation of the "Resolution on Certain Major Questions regarding the Comprehensive Deepening of Reforms" (hereafter "the Resolution"), the full text of which was released on November 15, Xi noted:

The NSC's main responsibilities are to formulate and implement national security strategies, to push forward legal construction on state security, and formulate the goals and policies of national security work."

Referring to the connection between external and internal threats, Xi said: "Our country faces the double pressure of protecting national sovereignty, security and developmental interests from outside [threats] and safeguarding internal political safety and social stability.

While the NSC shares its name in Chinese with the US National Security Council, it is believed to be focused primarily on internal security. This includes combating challenges posed by "hostile anti-China forces from abroad." Within the party's highest echelons, there are already two units - the LGFA and the Leading Group on National Security - that perform roles similar to that of the American National Security Council. 

Reports in the non-official China media and the Hong Kong press have published several possible lists of ministries and ministerial-level units that will send senior representatives to the new body. 

By Eliminating Failure, The Government Robs Us Of Success

“Success by government decree” is the motto of the regulatory state

By Harry Binswanger

Where does the Left get its power? From one source at root: a wrong standard of morality, of good and evil. Self-sacrifice is said to be the good, self-interest the evil. The Left blames every social and economic disaster on “selfish greed.” What caused the financial meltdown, according to the Left? The selfish greed of Wall Street bankers. Why was Obamacare passed? Because people are in need, and the greedy must serve the needy.

Those on the Right should be pointing out that “selfish greed” is a smear-term: it blackens ambitiousness and the desire to produce wealth, which are virtues, by associating them with mindless gluttony. But Rightists don’t expose the smear because they share the anti-self morality, or at least fear to challenge it.

So far, most public defenders of capitalism have lacked the courage to say, in the words of John Galt in Atlas Shrugged, “your life belongs to you and the good is to live it.”

But, as a small step in the right direction, pro-capitalists are beginning to answer the absurd leftist claim that greed caused the financial crisis. They are pointing out this obvious fact: “greed”–as the desire to get rich–is a constant. It did not suddenly come into being, or flower, in the period leading up to the financial meltdown.

What Causes The Growing Wealth Gap In America?

Only the rich have benefited from the Fed’s largess

by Omid Malekan

A major issue in America today is the growing gap between the rich and the poor, and the popular narrative is that the disparity is caused by capitalism run wild and only the firm hand of government can fix the problem. But what if this narrative has it backwards? What if the growing wealth disparity in America is actually caused by the government?

Take Warren Buffet, a man often at the center of this debate, as not only is he a billionaire, but also a vocal advocate for higher income taxes on the rich. Mr. Buffet’s focus on taxes on income is curious, as he didn’t become a billionaire by earning a high income, but rather from owning assets, like shares in Berkshire Hathaway. Many are aware of his acumen in making investments that have a “margin of safety” – or minimal downside – but few are aware of the greatest source of such safety for Mr. Buffet in recent years, the US Government.

During the 2008 crisis Buffet’s investment portfolio was full of wobbly financial companies like GE and Wells Fargo. In the span of 2 months Berkshire stock – and Mr. Buffets net worth – lost half their value. In response, Buffet invested more in collapsing financial companies like Goldman Sachs, then went public demanding a bailout. The Treasury Department and Federal Reserve responded with program after program to keep troubled financial entities alive, some of them invented specifically for Buffet holdings like GE. Just two years later, thanks to the impact of the bailouts and the Fed’s programs, Berkshire stock rebounded sharply. Mr. Buffet’s investment in Goldman Sachs, which he himself admitted was a bet on the bailouts, made billions and continues to earn him a profit years later.

Mr. Buffet wasn’t the only person that benefited from the bailouts, but wealthy citizens like him, who tend to hold the majority of assets in America, benefited disproportionately. The untold narrative of how Warren Buffet and others like him “get richer” is how they managed to not get poorer, even when their bad investment choices dictated such.

Presumptions Versus Good Ideas

Losing respect for presumptions undermines society's immune system against good ideas

By Anthony de Jasay

Since 2008, sovereign indebtedness and the rolling over of charges onto the backs of generations to come has gathered momentum. The cruel "austerity" designed to reduce budget deficit from 8-9 to 3-4 per cent of national product still represents a fiscal stimulus, albeit a less feverish one than before. Nevertheless, it is now almost universally condemned as excessively severe, stifling as it does economic growth that is now practically at a standstill in Western Europe. Blaming the past for what is wrong in the present, the apparent inability to grow is now blamed on the Goldilocks years of deregulation, trade liberalisation and less progressive income taxation of the so-called Washington Consensus of the two decades prior to the 2008 crash. For the moment and maybe for some time to come, the collective wisdom trumpeted in parrot talk(1) is that salvation must lie in bringing back the strong hand of the state to impose discipline in the market that has proved incapable to look after itself. The result on the entire Western world, but most conspicuously in Europe, is an avalanche of legislation, a frenzy of regulation and a mudslide of directives supposed to bring security to all, to tame risk, to curb "non-productive" services such as finance and foster "productive" industry, and to "create" new jobs by protecting the old ones. Last but by no means least, to make social justice prevail over the "ultra" or "neo"-liberal aberrations of recent decades.

The obsessive passion to govern, to tug at every steering wheel, gas pedal and brake within sight that seems to motivate the political classes and is trusted to ward off defeat at the next election, feeds on a steady flow of Good Ideas or, as the saying goes, on ideas that "looked good at the time". In the near or medium term, we are certain to have massive studies evaluating the effect of the post-2008 rush of intensive government and its breathless pursuit of Good Ideas. It is a safe bet that some of these studies, though hardly more than a half, will ascribe the coma of the European economy, its inability to put 2008 behind itself and start growing again, to the insistence of governments to regulate and direct it.

While we wait for these definitive studies to emerge there is ample time to reflect on the reasons for our readiness to gobble up what the political classes kept laying before us. Why are we so gullible as to believe that the ideas that look good today will still look good tomorrow? Has society lost its supposed conservatism, its immune system, that would resist good ideas, or at least good ideas of a certain type?

Any social order worthy of the name rests on two elementary components. One, widely recognised, is a system of rules of reciprocal behaviour, such that conforming to them is beneficial or at worst neutral to all parties. The rules are universally beneficial because any potential gain from not conforming to them is threatened by sanctions administered by those benefiting from conformity. The model is that nobody steals the neighbour's chicken and everybody is down on the eventual chicken-thief. The interaction, technically a convention, is spontaneous and has been first made clear by David Hume, who used it above all to explain the stability of property and the keeping of contracts. It is also central to game theory in the explanation of certain types of equilibria.

There are no ‘natural’ resources, only raw materials

All resources are created through human effort

by Mark J. Perry

From Don Boudreaux’s excellent post “Coming to Terms with Rhetoric“:

Take the term “natural resources” (which I’ve written about before; for example, here).  This phrase suggests that some things of value to human beings occur naturally – without any human effort or creativity.  But that suggestion is wrong.  Nothing is naturally a resource; nature alone invests nothing with resourcefulness; ultimately, resources - all resources – are created by human beings.  Nature creates raw materials, but never creates resources.  Raw materials and human artifacts are made into resources only if, and only when, and only insofar as, human creativity figures out a way (or ways) to employ those materials and artifacts in ways that satisfy genuine human desires.

The point, here, is that the term “natural resources” can be misleading about the role of nature in creating human bounty.  Nature exists, to be sure; but human bounty is created by human creativity; nature in matters economic is not the prime mover.  Nature’s role in determining who is and who isn’t materially wealthy is much smaller than we are sometimes led to believe when focusing on “natural resources.”

From another article, Don provides an example:

Take petroleum. What makes it a “resource.” It’s certainly not a resource naturally. If it were, American Indians would long ago have put it to good use. But they didn’t. I suspect that for Pennsylvania’s native population in, say, the year 1300, the dark, thick, smelly stuff that bubbled up in watering holes was regarded as a nuisance.

Petroleum didn’t become a resource until human beings creatively figured out how to use it to satisfy some human desires and other human beings figured out how to extract it cost-effectively from the ground. 

Australia Rejects UN “Socialism Masquerading as Environmentalism”

According to UN, individual liberty, free markets, national sovereignty, and more will all have to go

by  Alex Newman

The new Australian government, elected by a landslide on a platform opposing carbon taxes and “global-warming” schemes as United Nations climate theories were imploding, delivered a blunt message to UN alarmists this week: No more “socialism masquerading as environmentalism.” With the new conservative-leaning cabinet taking a stand against UN machinations and radical domestic restrictions imposed under the previous Labor Party government, Australian authorities also publicly refused to sign up for any new contributions, taxes, or charges at this week’s embattled UN global-warming summit in Poland.  

Despite the tough talk by officials and the fact that global temperatures actually stopped rising 17 years ago — debunking every one of the UN’s “climate models” — Australia is still ensnared in more than a few dubious international “climate” commitments. In a move supposedly aimed at stopping “climate change,” the nation’s previous rulers agreed to force Australians to drastically reduce their emissions of carbon dioxide — a gas exhaled by all people and critical to life on Earth, which constitutes a mere fraction of one percent of all gases in the atmosphere.

According to an official document outlined in The Australian newspaper, the new government plans to remain “a good international citizen” and is still “committed to achieving a 5 percent reduction” in CO2 emissions by 2020. However, the document, reportedly produced after a cabinet meeting last week, noted that authorities will not agree to any international “climate” agreements that involve squandering more taxpayer money or levying taxes. 

Australia “will not support any measures which are socialism masquerading as environmentalism,” the document also states. The new government, led by conservative-leaning Prime Minister Tony Abbott , also explicitly declared that it would not make any payments or accept any liabilities as part of any potential new UN global warming agreement. That means Australia will refuse to play “any role in a wealth transfer from rich countries to developing nations to pay them to decrease their carbon emissions,” the paper reported. 

With rulers of poor countries demanding $100 billion per year from taxpayers in wealthier nations to deal with alleged man-made “climate change” this week in Warsaw, the Australian decision represents a potentially major blow to the UN-led extortion effort. The new leadership also refused to send senior Australian officials — Environment Minister Greg Hunt and Foreign Minister Julie Bishop — to the ongoing UN summit. Predictably, climate alarmists and wealth redistributionists were up in arms. Analysts and commentators in Australia and other Western nations, however, celebrated the move.