A small victory in a small campaign

When you play for small stakes, the spoils of victory are also small

Barack Obama has returned to the White House following one of the most acrimonious, negative and ideas-free campaigns in living memory

by Sean Collins 

The polls before the US presidential election showed a tight contest, with Barack Obama edging out Mitt Romney. And that is what happened, more or less. The nationwide vote tally was very close, with Obama ahead by 50 per cent to 48 per cent as we go to press. But under America’s electoral-college system, Obama won handily, currently holding 303 votes to Romney’s 206 votes, with Florida’s 29 votes looking like they, too, might go to Obama.

This Obama victory was rather different to his win in 2008, and not only because Obama won by a much narrower margin. Turnout was down from 2008, although it held up more than some had expected. More importantly, the level of enthusiasm was significantly lower. In 2008, you could feel the excitement; this year voters went about their business in a low-key way.

You could say that it was inevitable that the turnout and passion would be lower, given that the novelty of electing the first black president was no longer a factor. But the drop-off had more to do with the character of the campaign. In 2008, Obama offered the promise of moving beyond the old politics of petty divisions and rancor, and he spoke in transcendent terms of ‘hope’ and ‘change’. People were genuinely inspired – not just because Obama was black, but because he seemed to present a way forward. In 2012, that message vanished. Where once Obama spoke of ‘transforming’ the future, he now spent most of his time attacking his opponent, occasionally defended his record, and said very little about what he would do if elected.

Indeed, the election put to an end one of the most acrimonious, negative and ideas-free campaigns in living memory. The most striking thing was how the attacks were so personal in nature. Obama’s campaign was most guilty in this regard, spending the entire campaign attacking Romney’s character: depicting him as a ‘vulture’ capitalist, and suggesting he was unethical and unpatriotic. In response, Romney himself mostly held back from retaliating, but his surrogates suggested that Obama’s failings as president had to do with his aloof, unenergetic or vindictive nature.

It Doesn't Matter

A choice of who is going to captain the sinking Titanic

By Simon Black

It’s really hard to ignore what’s happening today; the election phenomenon is global. Over the last several weeks, I’ve traveled to so many countries, and EVERYWHERE it seems, the US presidential election is big news. Even when I was in Myanmar ten days ago, local pundits were engaged in the Obamney debate. Chile. Spain. Germany. Finland. Hong Kong. Thailand. Singapore. It was inescapable.

The entire world seems fixated on this belief that it actually matters who becomes the President of the United States anymore… or that one of these two guys is going to ‘fix’ things.

Fact is, it doesn’t matter. Not one bit. And I’ll show you mathematically:

1) When the US federal government spends money, expenses are officially categorized in three different ways.

 Discretionary spending includes nearly everything we think of related to government– the US military, Air Force One, the Department of Homeland Security, TSA agents who sexually assault passengers, etc.

Mandatory spending includes entitlements like Medicare, Social Security, VA benefits, etc. which are REQUIRED by law to be paid.

 The final category is interest on the debt. It is non-negotiable.

 Mandatory spending and debt interest go out the door automatically. It’s like having your mortgage payment autodrafted from your bank account– Congress doesn’t even see the money, it’s automatically deducted.

History is cyclical

Will A Prophet Assume Command?

by Jim Quinn 

[Yes it's daunting; but well worth the time to grasp the inexorable path that we are on and rather stunning parallels to previous periods in our history]

“The next Fourth Turning is due to begin shortly after the new millennium, midway through the Oh-Oh decade. Around the year 2005, a sudden spark will catalyze a Crisis mood. Remnants of the old social order will disintegrate. Political and economic trust will implode. Real hardship will beset the land, with severe distress that could involve questions of class, race, nation and empire. The very survival of the nation will feel at stake. Sometime before the year 2025, America will pass through a great gate in history, commensurate with the American Revolution, Civil War, and twin emergencies of the Great Depression and World War II.” – Strauss & Howe – The Fourth Turning

Strauss & Howe wrote these words in 1997. They had predicted the arrival of another Crisis in this time frame in their previous book Generations, written in 1990. This wasn’t guesswork on their part. They understood the dynamics of how generations interact and how the mood of the country shifts every twenty or so years based upon the generational alignment that occurs as predictably as the turning of the seasons. The last generation that lived through the entire previous Crisis from 1929 through 1946 has virtually died off. This always signals the onset of the next Fourth Turning. The housing bubble and its ultimate implosion created the spark for the current Crisis that began in September 2008, with the near meltdown of the worldwide financial system. Just as the stock market crash of 1929, the election of Lincoln in 1860, and the Boston Tea Party in 1773 catalyzed a dramatic mood change in the country, the Wall Street created financial collapse in 2008 has ushered in a twenty year period of agony, suffering, war and ultimately the annihilation of the existing social order.

We have experienced the American High (Spring) from 1946 until 1964, witnessing America’s ascendancy as a global superpower. We survived the turbulent Consciousness Revolution Awakening (Summer) from 1964 until 1984, as Vietnam era protests morphed into yuppie era greed. The Long Boom/Culture Wars Unraveling (Fall) lasted from Reagan’s Morning in America in 1984 until the 2008 Wall Street/Federal Reserve spawned crash. The pessimism built to a crescendo as worry about rising violence and incivility, widening wealth inequality, and the splitting of the national consensus into extremes on the left and right, led the country into a winter of discontent. The Global Financial Crisis (Winter) has arrived in full fury and is likely to last until the late 2020’s. It will be an era of upheaval, financial turbulence, economic collapse, war, and the complete redefinition of society, as the existing corrupt status quo is swept away in the fury of powerful hurricane winds of change. History is cyclical and we’ve entered the most dangerous season, when the choices we make as a nation will have profound long lasting implications to the lives of future unborn generations.

The linear thinkers and so called progressives who believe that history charges relentlessly forward and human ingenuity overcomes all obstacles as the world becomes progressively richer, advanced, and humane ignore the lessons of history that have been re-written every 80 to 100 years for centuries. Generational theory is so simple that even an Ivy League intellectual economist, corrupt congressman, or CNBC anchor bimbo could grasp the basic concept.

What we need is not a new president but a new presidency

Imperial powers will only expand as crises offer new opportunities for extra-legal power grabs

by Charles Hugh-Smith

There are few practical limits on presidential power. This is a key dynamic in the failed presidencies of G.W. Bush and Barack Obama.

If you're not familiar with the term The Imperial Presidency, here is an introduction:

Through various means, Presidents subsequently acquired powers beyond the limits of the Constitution. The daily accountability of the President to the Congress, the courts, the press and the people has been replaced by an accountability of once each four years during an election. These changes have occurred slowly over the centuries so that that which appears normal differs greatly from what was the original state of America.

Historian Arthur M. Schlesinger, Jr. popularized the term with his book The Imperial Presidency (Kindle edition), originally issued in 1973 but updated in 2004 to include a discussion of the G.W. Bush presidency. Schlesinger summarized the "World War II and beyond" expansion of presidential powers thusly:

“The weight of messianic globalism was indeed proving too much for the American Constitution. If this policy were vital to American survival, then a way would have to be found to make it constitutional; perhaps the Constitution itself would have to be revised. In fact, the policy of indiscriminate global intervention, far from strengthening American security, seemed rather to weaken it by involving the United States in remote, costly and mysterious wars, fought in ways that shamed the nation before the world.

When the grandiose policy did not promote national security and could not succeed in its own terms, would it not be better to pursue policies that did not deform and disable the Constitution?"

Capitalists uninterested in Capitalism

How To Bring Back Capitalism

by Tyler Durden

"Capitalists seem almost uninterested in Capitalism" is how Clayton Christensen describes the paradox of our recovery-less recovery. In an excellent NYTimes Op-ed, the father of the Innovator's Dilemma comments that "America today is in a macroeconomic paradox that we might call the capitalist’s dilemma."

Whatever happens on Election Day, Americans will keep asking the same question: When will this economy get better? 

In many ways, the answer won’t depend on who wins on Tuesday. Anyone who says otherwise is overstating the power of the American president. But if the president doesn’t have the power to fix things, who does?

It’s not the Federal Reserve. The Fed has been injecting more and more capital into the economy because — at least in theory — capital fuels capitalism. And yet cash hoards in the billions are sitting unused on the pristine balance sheets of Fortune 500 corporations. Billions in capital is also sitting inert and uninvested at private equity funds.

Capitalists seem almost uninterested in capitalism, even as entrepreneurs eager to start companies find that they can’t get financing. Businesses and investors sound like the Ancient Mariner, who complained of “Water, water everywhere — nor any drop to drink.”

So businesses and investors are drowning in Fed-sponsored liquidity but are endowed with what he calls the Doctrine of New Finance - where short-termist profitability guides entrepreneurs away from investments that can create real economic growth.

... the Doctrine of New Finance is taught with increasingly religious zeal by economists, and at times even by business professors like me who have failed to challenge it...

His three forms of 'innovation' (empowering, sustaining, and efficiency)...

·        "empowering" innovations. These transform complicated and costly products available to a few into simpler, cheaper products available to the many.

·        "sustaining" innovations. These replace old products with new models.

·        "efficiency" innovations. These reduce the cost of making and distributing existing products and services.

Election 2012: How The Winner Will Destroy America

The guy in the White House into 2013, Republican or Democrat, is going to be a part of the problem, nothing more…

by Brandon Smith

Of all the hollow and uninspired elections that this country has suffered through over the past several decades, one might think that at some point long ago the American public would have finally struck a plateau of disenfranchisement; that we could sink no further into despondency, that there is a saturation limit to the corruption of our voting process.  Unfortunately, there has been no such luck.  I have to say that in all honesty I have never seen more people gut jumbled and disgusted with our electoral system than I have in 2012.  Sure, there is still a hyper-gullible segment of the populous that continues to play the game, but even those idiots are beginning to admit that the choices offered are dismal at best, catastrophic at worst.  The fog of the false Left/Right paradigm is starting to lift, and all that lay in its wake is a hoard of lost wide-eyed flabbergasted followers without a coattail or a talking point to cling to.  Sudanese refugees have a better chance of survival than these people do…

Even in the more obvious of fraudulent past elections there was at least an attempt by the establishment to present a pageant of conflicting ideologies (George W. Bush vs. John Kerry comes to mind).  There has always been the Democrat who pretends to be anti-war, or the Republican who pretends to be small government, or the Democrat who pretends to defend our right to privacy, and the Republican who pretends to be pro-2nd Amendment.  But in 2012, even the theater of rhetoric has disappeared.  Both primary party candidates seem to be sharing the same intestinal tract and the same teleprompter, and now, the average American is asking a new set of questions.  They do not wonder how these men will change things for the better.  Not at all.  Instead, they wonder which one will do LESS DAMAGE while in office.  This is the terrible reality we have come to understand in our society today.  It is a sad awakening, but a necessary one. 

Whoever Wins, We’re in for an Age of Austerity

America's demographic crisis will stretch our entitlements past the breaking point

By PATRICK J. BUCHANAN

“Are the good times really over for good?” asked Merle Haggard in his 1982 lament.

Then, the good times weren’t over. In fact, they were coming back, with the Reagan recovery, the renewal of the American spirit and the end of a Cold War that had consumed so much of our lives.

Yet whoever wins today, it is hard to be sanguine about the future.

The demographic and economic realities do not permit it.

Consider. Between 1946 and 1964, 79 million babies were born–the largest, best-educated and most successful generation in our history. Bill Clinton and George W. Bush, both born in 1946, were in that first class of baby boomers.

The problem.

Assume that 75 million of these 79 million boomers survive to age 66. This means that from this year through 2030, an average of nearly 4 million boomers will be retiring every year. This translates into some 11,000 boomers becoming eligible for Medicare and Social Security every single day for the next 18 years.

Why Conservatives Hate War

Conflict erodes a nation’s cultural continuity as well as its finances

By WILLIAM S. LIND

One of the odder aspects of present-day politics is the assumption that if you are antiwar you are on the left, and if you are conservative you are “pro-war.” Like labelling conservative states red and liberal states blue, this is an inversion of historical practice.

The opposition to America’s entry into both World Wars was largely led by conservatives. Senator Robert A. Taft, the standard-bearer of postwar conservatism, opposed war unless the United States itself was attacked. Even Bismarck, after he had fought and won the three wars he needed to unify Germany, was staunchly antiwar. He once described preventive war, like the one America is being pressured to wage on Iran, as “committing suicide for fear of being killed.”

Conservatives’ detestation of the war has no “touchy-feely” origins. It springs from conservatism’s roots, its most fundamental beliefs and objectives. Conservatism seeks above all social and cultural continuity, and nothing endangers that more than war.

In the 20th century, war brought about social and cultural revolutions in the United States, including a large-scale movement of women out of the home and into the workplace. Nineteenth-century reformers had labored successfully to make it possible for women (and children) to leave the dark satanic mills and devote their lives to home and family, supported by a male breadwinner. The Victorians rightly considered the home more important than the workplace. A man’s duties in the world of affairs were a burden he had to carry to provide for his household, not something women should envy.

This happy situation was overturned in both world wars as men were drafted by the millions while the demand for factory labor to support war production soared. Back into the mills went the women. The result was the weakening of the family, the institution most responsible for passing the culture on to the next generation.

The Permanent Militarization of America

That which is left unexamined eventually becomes invisible

By AARON B. O’CONNELL

IN 1961, President Dwight D. Eisenhower left office warning of the growing power of the military-industrial complex in American life. Most people know the term the president popularized, but few remember his argument.

In his farewell address, Eisenhower called for a better equilibrium between military and domestic affairs in our economy, politics and culture. He worried that the defense industry’s search for profits would warp foreign policy and, conversely, that too much state control of the private sector would cause economic stagnation. He warned that unending preparations for war were incongruous with the nation’s history. He cautioned that war and warmaking took up too large a proportion of national life, with grave ramifications for our spiritual health.

The military-industrial complex has not emerged in quite the way Eisenhower envisioned. The United States spends an enormous sum on defense — over $700 billion last year, about half of all military spending in the world — but in terms of our total economy, it has steadily declined to less than 5 percent of gross domestic product from 14 percent in 1953. Defense-related research has not produced an ossified garrison state; in fact, it has yielded a host of beneficial technologies, from the Internet to civilian nuclear power to GPS navigation. The United States has an enormous armaments industry, but it has not hampered employment and economic growth. In fact, Congress’s favorite argument against reducing defense spending is the job loss such cuts would entail.

Nor has the private sector infected foreign policy in the way that Eisenhower warned. Foreign policy has become increasingly reliant on military solutions since World War II, but we are a long way from the Marines’ repeated occupations of Haiti, Nicaragua and the Dominican Republic in the early 20th century, when commercial interests influenced military action. Of all the criticisms of the 2003 Iraq war, the idea that it was done to somehow magically decrease the cost of oil is the least credible. Though it’s true that mercenaries and contractors have exploited the wars of the past decade, hard decisions about the use of military force are made today much as they were in Eisenhower’s day: by the president, advised by the Joint Chiefs of Staff and the National Security Council, and then more or less rubber-stamped by Congress. Corporations do not get a vote, at least not yet.

The Complexity of Islamic Movements

Beware of the Islamist trap

By Monte Palmer 

Speaking Freely is an Asia Times Online feature that allows guest writers to have their say. Please click here if you are interested in contributing. Islamists, judging by the use of the term in the global press, is a simplified way of referring to all Muslim groups seeking some form of Islamic rule in the Middle East. 

Like most simplistic expressions, "Islamist," is laden with hidden traps. The first Islamist trap is believing that all Muslim groups seeking some form of Islamic rule in the Middle East are of one mind and body. They are not. The second Islamist trap is assuming that all groups seeking some form of Islamist rule are inherently hostile to the interests of the United States and its allies. Some are, and some are not. The third Islamist trap is thinking that the US and its allies can stop the Islamist surge now sweeping the Middle East by diplomacy, sanctions, and covert action. The verdict on this supposition has yet to be rendered, but the outlook is not promising. The fourth and most lethal Islamist trap is the belief that force alone can stop the Islamists. Iraq and Afghanistan suggest otherwise. 

The dangers of assuming that all Islamists are the same is easily illustrated by a brief review of the four main Sunni Islamist currents competing for control of the Middle East. 

Islam lite 
The most liberal of the four main Islamist currents is Islam Lite, the sarcastic Turkish nickname for the Justice and Development Party that has ruled Turkey within a secular framework for more than a decade. Islam Lite, the most forward looking of the four Islamic currents, has built Turkey into the world's seventeenth largest economy, consolidated Turkish democracy, brought Turkey to the doorstep of membership in the European Union, reaffirmed Turkey membership in the North Atlantic Treaty Organization and established Turkey as the dominant Muslim power in the Middle East and beyond. 

The Doctrine of "Unequal Exchange"

The Last Refuge of Modern Socialism?

By Anthony de Jasay

Socialist intellectuals squirm when reminded of such basic tenets of Marxist economics as surplus value, the iron law of wages and the declining rate of profit, tenets that were sacred in the glory days of advancing socialism but that are now kept under glass in the museum of strange ideas.

While the old stuffing of Marxist economics has been knocked out of socialism, two major attempts have been made to replace it with some alternative intellectual content. One was to upgrade the vague and emotional notion of "social justice", and underpin it with the idea that since "veils" of ignorance or uncertainty hide the future, the rational individual must opt for an egalitarian social order for his own safety ("society as mutual insurance").

It was then the obvious move to infiltrate the redistributive demands of "social justice" into the capitalist system which may in other respects remain intact. Germs of this attempt can be traced back to mid-19th century English thought. It came to full flowering after World War II in the American brand of liberalism and in European social democracy. However, as a positive theory it is feeble. It needs bolstering by normative judgments condemning inequalities except if morally justified. But if we accept these judgments anyway, then we can safely throw away the theory. It is redundant and cannot salvage socialism's intellectual respectability.

Are We Doomed No Matter Who Wins?

At first glance it certainly appears that way

By Michael M. Rosen

With Friday’s jobs report confirming the weakness of our economic recovery, the fiscal cliff rapidly coming into view, and American influence abroad continuing to erode, someone has to ask: is America doomed no matter who wins the presidential election?

At first glance it certainly appears that way.

Let’s begin by assuming that Mitt Romney ekes out a victory, winning the national popular vote by a point or two and capturing 275 electoral votes or thereabout. If Romney prevails — and I fervently hope he does — it will most likely be by slim margins such as these.

Let’s also assume that Republicans pick up a few seats in the Senate, probably not enough to retake the majority — even with a Vice President Paul Ryan casting a decisive 51st vote — but enough of a gain to render the upper chamber evenly divided, or nearly so. This, too, is the most plausible outcome, as GOP hopes to win the chamber outright have foundered on the shoals of ill-considered remarks by candidates in Missouri and Indiana, among other misfortunes.

And finally, let’s assume the House remains in Republican hands, with slightly diminished numbers, on the order of five seats lost to Democratic challengers. This, too, seems like the most likely result, as recent wild swings in congressional control appear to have calmed this cycle.

America Gone Wild

The are good news and bad news

By JIM STERBA

This year, Princeton, N.J., has hired sharpshooters to cull 250 deer from the town's herd of 550 over the winter. The cost: $58,700. Columbia, S.C., is spending $1 million to rid its drainage systems of beavers and their dams. The 2009 "miracle on the Hudson," when US Airways flight 1549 had to make an emergency landing after its engines ingested Canada geese, saved 155 passengers and crew, but the $60 million A320 Airbus was a complete loss. In the U.S., the total cost of wildlife damage to crops, landscaping and infrastructure now exceeds $28 billion a year ($1.5 billion from deer-vehicle crashes alone), according to Michael Conover of Utah State University, who monitors conflicts between people and wildlife.

Those conflicts often pit neighbor against neighbor. After a small dog in Wheaton, Ill., was mauled by a coyote and had to be euthanized, officials hired a nuisance wildlife mitigation company. Its operator killed four coyotes and got voice-mail death threats. A brick was tossed through a city official's window, city-council members were peppered with threatening emails and letters, and the FBI was called in. After Princeton began culling deer 12 years ago, someone splattered the mayor's car with deer innards.

Welcome to the nature wars, in which Americans fight each other over too much of a good thing—expanding wildlife populations produced by our conservation and environmental successes. We now routinely encounter wild birds and animals that our parents and grandparents rarely saw. As their numbers have grown, wild creatures have spread far beyond their historic ranges into new habitats, including ours. It is very likely that in the eastern United States today more people live in closer proximity to more wildlife than anywhere on Earth at any time in history.

Social engineering trumps aesthetics

Ancient and/or Modern

by Theodore Dalrymple 

To believe or trust in the wisdom of crowds just because crowds are composed of many people and two heads are better than one seems to me absurd; but equally it is wrong to reject an opinion merely because it is held by a crowd. We are condemned, or privileged, or both, constantly to have to make up our own minds about things: to be nonjudgmental, as the cant word has it, means not to participate fully in or of human life. And what most people probably mean when they describe themselves (almost always in a self-congratulatory way) as being nonjudgmental is that they are uncensorious – other than about people who are censorious, of course. An inadequate vocabulary can be pregnant with consequences.

An article in the French leftish-liberal newspaper, Le Monde, for 15 September, drew attention with evident unease or even mild disapproval to the results of a poll conducted in France by the fine arts magazine, Beaux Arts. To the question of whether it is more important to safeguard the treasures of the past or to promote creativity, the respondents replied by a very large majority that the former is the more important. The article implied that, pacethe advertisement, forty million Frenchman can be wrong.

Of course, France is in a slightly unusual position by comparison with many other countries. It is by far the most visited country in the world, with 70 million tourists annually; more than twice as many Frenchmen now live by tourism as by agriculture. And it isn’t French modernity that people come to see: it is the French past (together, of course, with the pleasures, comforts and conveniences of the present, in which the country is by no means deficient).     

But I doubt very much that those who answered the poll were thinking of their pocketbooks or economic interests as they answered. They were thinking of their country; and if I had been asked I would have answered in the same way.

Who Needs a President?

The Founders’ greatest error

By BILL KAUFFMAN

No matter which hollow man occupies the bunker at 1600 Pennsylvania Avenue, the evidence from 225 years points to an inescapable conclusion: the Founders erred horribly in creating the presidency. To invest in one man quasi-kingly powers over the 13 states then, 300 million people and half a continent today, is madness. And it didn’t have to be this way.

Many Anti-Federalists proposed, as an alternative to what they called the “president-general,” either a plural executive—two or more men sharing the office, a recipe for what a sage once called a wise and masterly inactivity—or they wanted no executive at all. Federal affairs would be so limited in scope that they could be performed competently and without aggrandizement by a unicameral legislature—that is, one house of Congress—as well as various administrative departments and perhaps a federal judiciary.

The New Jersey Plan, fathered by William Paterson of the Springsteen State, was the small-f federal option at the Constitutional Convention. It is the great decentralist what-might-have-been. The New Jersey Plan provided for a unicameral Congress with an equal vote for each state, and copresidents chosen by Congress for a single fixed term and removable by Congress if so directed by a majority of state governors.

This would have saved us from the cult of the presidency, the imperial presidency, the president as the world’s celebrity-in-chief—the whole gargantuan mess.

One reason for the disastrous engorgement of presidential powers was that all parties at the Convention tacitly agreed that the first president would be George Washington, whom even the most suspicious Anti-Federalists admired. How much more protective of our liberties would the Framers have been, one wonders, if the putative first president was a man less universally respected than Washington: say, John Hancock?

The Kindest Cuts

Shrinking spending reduces deficits without harming the economy - unlike tax hikes

BY ALBERTO ALESINA

Should debt-ridden and economically struggling Western governments be doing everything possible to reduce their deficits? The debate over that question has become increasingly confusing—not only in Europe, where the matter is particularly urgent, but in the United States, too. Those in favor of immediate deficit reduction argue that it is a necessary precondition of economic growth. Today’s deficits become tomorrow’s debt, they say, and too much debt can bring fiscal crises, including government defaults. Markets, worried about solvency, will require high interest rates on government bonds, making it more costly for countries to service their debts. Defaults could cause banks holding government bonds to collapse, possibly leading to another financial meltdown. There can be no sustained growth, say the deficit hawks, unless we start balancing our books.

Their opponents agree that we should eventually rein in deficits—but right now, when economies worldwide are weak, is the wrong time. To shrink a deficit, this argument goes, you need to raise taxes or to cut spending. Taking either of those steps reduces aggregate demand, making an already faltering economy sputter and sink into serious recession. The all-important debt-to-GDP ratio swells because GDP growth slows more than the measures taken reduce debt. Therefore the approach is self-defeating. Governments should instead continue to run deficits and paper them over with borrowed money, waiting to balance their budgets until economies get stronger.

The Argentina Scenario

The Obama administration’s familiar economic mistakes

By JAY HALLEN

The opening decade of the twenty-first century has seen a slow but distinct decline in American capitalism. Economic policy has become increasingly overrun by central planning, redistribution, and government picking of industrial winners and losers. Beginning about half a century ago, those elements helped sink another free-market powerhouse—Argentina. While Barack Obama is no Juan Perón, the president’s misguided policies threaten to squander our economic advantages, just as Perón’s did in Argentina.

Government intervention in the housing market, caused by low interest rates; direct subsidies, such as the home-mortgage interest-tax deduction; and the market distortion caused by Fannie Mae and Freddie Mac—the two state-backed entities that make virtually all home loans now—has helped throw the American economy into a tailspin. A rerun threatens to occur in the student loan market and perhaps also health care, two areas where the government now plays an outsize role in financing and subsidies. Subsidies and bailouts to favored sectors have come at substantial cost to the taxpayer. The notion of “too big to fail” removes banks’ incentives for responsible risk-taking, while the Fed’s continued “quantitative easing” plays to the American consumer’s worst instincts: the over-leveraging that brought about the current crisis in the first place. Meanwhile, the U.S. Treasury retains a 27 percent stake in General Motors and refuses to sell its shares lest it realize a multibillion-dollar loss. But with government-subsidized Chevy Volts losing $49,000 per car, any increase in GM’s share price seems a long way off.

The Turn Away From Europe

21st century’s central arenas will be the Middle East and the Western Pacific

By Josef Joffe

It almost goes unnoticed that the United States is closing a long chapter in its Atlantic history. For 70 years, since the landing in Normandy, America was literally a power-in-Europe, with a vast military presence stretching from Naples to Narvik and from Portugal to Germany. At its peak, the entire force, Navy and Air Force included, numbered 300,000. The Army topped out at 217,000. At the end of this year, the ground troops will have dwindled to 30,000. A massive support structure of American grand strategy is being dismantled. Why is no one weeping or gnashing teeth?

That would have been the response in decades past. From the Korean War onward, when the United States deployed hundreds of thousands to the peninsula, Europeans perpetually nourished a nightmare that the United States, abutting both the Atlantic and Pacific, would abandon them in favor of Asia. To reassure them, the Eisenhower administration dispatched six divisions to the Continent after 1950, promising to keep them there for as long as it took to build up NATO and win the Cold War. This permanent expeditionary force, fortified by thousands of tactical nuclear weapons, held steady for a half century, and even grew when the Soviets ratcheted up the pressure. Yet the angst was ever-simmering, stoked by perennial Senate resolutions demanding a drawdown. And it would roil whenever America’s attention shifted to other locales.

The Coming Global Disorder

How does global order come undone?

By Bret Stephens

Woody Island is a speck of land in the middle of the South China Sea, not quite a square mile in size. Over the past 80 years it has been occupied by French Indochina, Imperial Japan, the Republic of China, the People’s Republic of China, South Vietnam, and, after a brief war in 1974, the People’s Republic again. Now known as Yongxing to the Chinese (or Phu Lam to the Vietnamese, who still lay claim to it), the island has an airstrip, a harbor, and a few hundred Chinese residents, none native-born, many of whom make their living as fishermen.

An obscure tropical island may seem an odd starting point for an essay on the coming global disorder. Yet great conflicts have been known to flare over little things in faraway places. “On the morning of July 1, [1911,] without more ado, it was announced that His Imperial Majesty the German Emperor had sent his gunboat the Panther to Agadir to maintain and protect German interests,” wrote Winston Churchill in his history of the First World War. The proximate causes of the German foray to this deserted Moroccan bay “were complicated and intrinsically extremely unimportant.” But the real purpose of the kaiser’s move was to test—and, he hoped, to break—Britain’s alliance with France and, perhaps, scope out the possibility of establishing a German naval base in the north Atlantic. “All the alarm bells throughout Europe,” Churchill recalled, “began immediately to quiver.”

The Tremendous Economic Benefits of Superstorm Sandy

The storm clouds continue to swirl and a bad moon is rising

BY JAMES QUINN

The public relations propaganda campaign to convince the ignorant masses that Sandy’s impact on our economy will be minor and ultimately positive, as rebuilding boosts GDP, has begun. I’ve been hearing it on the corporate radio, seeing it on corporate TV and reading it in the corporate newspapers. There are stories in the press that this storm won’t hurt the earnings of insurers. The only way this can be true is if the insurance companies figure out a way to not pay claims. They wouldn’t do that. Would they?

It seems all the stories use unnamed economists as the background experts for their contention that this storm will not cause any big problems for the country. These are the same economists who never see a recession coming, never see a housing collapse, and are indoctrinated in Keynesian claptrap theory.

Bastiat understood the ridiculousness of Kenesianism and the foolishness of believing that a disaster leads to economic growth.

Bastiat’s original parable of the broken window from Ce qu’on voit et ce qu’on ne voit pas (1850):

Have you ever witnessed the anger of the good shopkeeper, James Goodfellow, when his careless son has happened to break a pane of glass? If you have been present at such a scene, you will most assuredly bear witness to the fact that every one of the spectators, were there even thirty of them, by common consent apparently, offered the unfortunate owner this invariable consolation—”It is an ill wind that blows nobody good. Everybody must live, and what would become of the glaziers if panes of glass were never broken?”