Since fierce clash, Egypt's crisis takes new turn

The Battle of the Mountain

By MAGGIE MICHAEL and SARAH EL DEEB

It has come to be known as the "Battle of the Mountain": a ferocious fight between members of Egypt's Muslim Brotherhood and their opponents near the group's Cairo headquarters. In a country that has already seen crisis after crisis, it could mark a dangerous turning point in the political turmoil.

The aftermath of the fighting is raising worries that the confrontation between Islamists, who dominate power in the country, and their opponents is moving out of anyone's control.

The riot on March 22 revealed a new readiness of some in the anti-Brotherhood opposition to turn to violence, insisting they have no choice but to fight back against a group they accuse of using violence against them for months. The fight featured an unusual vengefulness. Young protesters were seen at one point pelting a Brotherhood member with firebombs and setting him aflame. Others chased anyone with a conservative Muslim beard, while Islamists set up checkpoints searching for protesters. Each side dragged opponents into mosques and beat them.

Since the fight, Islamists enraged by what they saw as aggression against their headquarters have for the past week hiked up calls for wider action against opponents - and the media in particular - accusing them of trying to overthrow Islamist President Mohammed Morsi.

Those calls may explain moves by the country's top prosecutor the past week: the questioning of a popular television comedian, Bassem Youssef, whose Jon Stewart-style satires of Morsi drive Islamists into knots of anger, the summoning of several other media personalities and the issuing of arrest warrants against five opposition activists on accusations of fomenting violence.

When The Government Goes Bankrupt

Should Americans yet unborn pay for all of this?

By Judge Andrew Napolitano

What happens when the government goes bankrupt? This question is one that sounds like a hypothetical exercise in a law school classroom from just a few years ago, where it might have been met with some derision. But today, it is a realistic and terrifying inquiry that many who have financial relationships with governments in America will need to make, and it will be answered with the gnashing of teeth.

Earlier this week, a federal judge accepted the bankruptcy petition of Stockton, Calif., a city of about 300,000 residents northeast of San Francisco, over the objections of those who had loaned money to the city. The lenders – called bondholders – and their insurers saw this coming when the city stopped paying interest on their loans – called bonds. In this connection, a bond is a loan made to a municipality, which pays the lender tax-free interest and returns the principal when it is due. Institutional lenders usually obtain insurance, which guarantees the repayment but puts the insurance carrier on the hook.

Looking for a disaster waiting to blow sky high? We have one right at hand.

El Economista reports 97% of pensions are invested in Spanish government debt in 2012

By Mike "Mish" Shedlock

The Reserve Fund of Social Security in 2012 increased their holdings of Spanish debt to 97% of total assets, up from 90% who had in late 2011.

Over 70% of purchases are recorded in the second half of 2012, according to Bloomberg points, after the critical moment when ECB President Mario Draghi, undertook to do "whatever it takes" to defend the euro. A message that helped ease the constraints and helped drive Spanish debt.

In 2007, the money invested in financial assets were divided fairly (50%) between Spanish debt and foreign debt, but this proportion began to change in 2008.

In September 2012, for the first time in history the government had to dip into the reserve fund to pay the payroll to pensioners. A total of 3,063 million euros were drawn from this instrument, to which were added to the 3,530 million in November Moncloa needed to fund the pension increases.

Comparison to GM

This exactly reminds me of the stupidity of GM investing its assets in GM bonds. Expect similar results in Spain. 

The Moral Corruption of Fiat Money

Cautionary Tales for Minors

by Theodore Dalrymple

Never having read a textbook of economics in my life, I am at the mercy of newspapers for my knowledge of the dismal science. And by means of the intellectual equivalent of the Chinese water torture, I have come to the conclusion over many years that fiat money brings with it enormous psychological problems, not to say moral corruption. My conclusions are unoriginal, of course; I could have reached them in a few hours if only I had read a few texts. No doubt re-inventing the wheel is wasteful of time and effort, but it brings with it a certain pleasure not to be had from merely reading what others have invented before.

Moreover, while I can quite see the evils of fiat money, I am less good at imagining the harms of abandoning it, an important deficiency because life is usually the choice between different imperfections rather than between perfection and catastrophe. With some people it is otherwise: one could even propose a political typology composed of a two-dimensional grid, with the propensity vividly to perceive present good or evil along one axis, and that to perceive future good and evil along the other. Thus Pollyannas would vividly perceive both present and future goods; conservatives present goods but future evils; revolutionaries present evils but future goods; and nihilists both present and future evils. Temperamentally, I veer between conservatism and nihilism; but on the matter of fiat money, I am inclined to revolutionism.

Ignoring the real lessons of the riots

What kicked off the 2011 riots ?

by Neil Davenport 

The Lib-Con coalition government has been accused of failing to implement many of the recommendations proposed by the cross-party panel which reported on the August 2011 riots. But it is the broader environment of intervention by the state into everyday life that was the real root cause of the riots - and that intervention is increasing.

David Lammy, the Labour MP for Tottenham in north London, found that the majority of the panel’s 63 recommendations have not been acted upon. These include providing greater support for families, tackling youth unemployment and fining schools at which pupils have poor levels of reading and writing. Eleven recommendations that have been accepted or implemented, however, including better identification of potential problem families and measures ‘to help youngsters to cope with the pressures of advertising and materialism’.

There is no doubt that the 2011 riots exposed serious faultlines in England’s inner cities, which is why the government’s re-examination of measures designed to prevent further disturbances is important. But it is perhaps more important to probe whether such recommendations are the right ones or whether they could in fact exacerbate existing problems.

The major problem with the official analysis of the riots is the assumption that the causes in 2011 were identical to the causes of the 1981 riots: youth unemployment, poverty and police harassment. Even those, such as Lammy himself, who started to question New Labour’s drive to ‘nationalise society’ – the tendency to find state solutions to informal, social problems - still fall back on poverty as a powerful determining factor in people’s behaviour.

Leviathan feeding on ever younger victims

Schools push a curriculum of propaganda

By George F. Will

The real vocation of some people entrusted with delivering primary and secondary education is to validate this proposition: The three R’s — formerly reading, ’riting and ’rithmetic — now are racism, reproduction and recycling. Especially racism. Consider Wisconsin’s Department of Public Instruction. It evidently considers “instruction” synonymous with “propaganda,” which in the patois of progressivism is called “consciousness-raising.”

Wisconsin’s DPI, in collaboration with the Orwellian-named federal program VISTA (Volunteers in Service to America; the “volunteers” are paid), urged white students to wear white wristbands “as a reminder about your privilege, and as a personal commitment to explain why you wear the wristband.” A flyer that was on the DPI Web site and distributed at a DPI-VISTA training class urged whites to “put a note on your mirror or computer screen as a reminder to think about privilege,” to “make a daily list of the ways privilege played out” and to conduct an “internal dialogue” asking questions such as “How do I make myself comfortable with privilege?” and “What am I doing today to undo my privilege?”

After criticism erupted, the DPI removed the flyer from its Web site and posted a dishonest statement claiming that the wristbands were a hoax perpetrated by conservatives. But, again, the flyer DPI posted explicitly advocated the wristbands. And Wisconsin’s taxpayer-funded indoctrination continues, funded by more than Wisconsin taxpayers.

It's weather, not climate

Variability matters more than trend

By Matt Ridley

The east wind could cut tungsten; the daffodils are weeks behind; the first chiffchaffs are late. It’s a cold spring and the two things everybody seems to agree upon are that there’s something weird about the weather, and it’s our fault. Both are almost certainly wrong.

On weird weather, it is true that the contrast with last year’s warm March is striking, as is the difference between the incessant rain of the last twelve months and the long drought that preceded it in most of England. In the last year, America’s had a heatwave, a superstorm and now a bitterly cold spring. Australia has just had an “angry summer”. And so on.

The government’s retiring chief scientist, Sir John Beddington, claimed this week that “we are seeing more variability”. Is he right? On the whole, no. Forget the anecdotes and examine the data.

Start with America. Professor Roger Pielke of the University of Colorado has documented that floods, hurricanes, tornadoes and east-coast winter storms have shown no increase since the 1950s, while droughts have shown a slight decrease. The only thing that has changed is the financial damage done by storms, but as he drily remarks “The actual reason for the increasing number of damaging tropical storms has to do with the reporting of damages.”

What about elsewhere in the world? There has been no trend in tropical cyclone intensity or frequency worldwide at all. The Intergovernmental Panel on Climate Change itself, though heavily infiltrated by environmentalists in recent years, stated in a recent special report on climate extremes that over the coming two to three decades “signals are relatively small compared to natural climate variability” (as Matthew Parris pointed out last week, don’t you hate this habit of making forecasts in the present tense?), and that “even the sign of projected changes in some climate extremes over this time frame is [sic] uncertain”. Translated: the weather is just as likely to become less extreme as more extreme.

We're Living Through A Rare Economic Transformation

What Work Will Be In Demand (and What Won't) in the Future?

by Charles Hugh-Smith

In 1993, management guru Peter Drucker published a short book entitled Post-Capitalist Society.  Despite the fact that the Internet was still in its pre-browser infancy, Drucker identified that developed-world economies were entering a new knowledge-based era– as opposed to the preceding industrial-based era, which represented just as big a leap from the agrarian-based one it had superseded.

Drucker used the term post-capitalist not to suggest the emergence of a new “ism” beyond the free market, but to describe a new economic order that was no longer defined by the adversarial classes of labor and the owners of capital. Now that knowledge has trumped financial capital and labor alike, the new classes are knowledge workers andservice workers.

As for the role of capital, Drucker wryly points out that by Marx’s definition of socialist paradise –that the workers owned the means of production (in the 19^th century, that meant mines, factories and tools) – America is a workers’ paradise, because a significant percentage of stocks and bonds were owned by pension funds indirectly owned by the workers.

In the two decades since 1993, privately owned and managed 401K retirement funds have added to the pool of worker-owned financial capital.

North Korea: a tale of two superpowers

The latest round of instability on the Korean peninsula reveals a great deal about American and Chinese influence today

by Tim Black 

Seen in isolation, the recent actions and gestures of North Korea, with its boyishly chubby leader Kim Jong-un very much to the fore, look wilfully bellicose. After all, Kim has denounced the 1953 armistice which signalled the cessation of the Korean War, declared that it is time to ‘settle accounts with the US imperialists’, and announced plans to reactivate North Korea’s Yongbyon nuclear facility, a plant capable of producing weapons-grade fissile material. He’s even been pictured in front of a map showing missile flight paths right into the belly of the imperialist beast, the US.

Yet these warmongering gestures from North Korea, complete with Soviet-era rhetoric, ought not to be seen in isolation. In other words, they ought not to be reduced to the actions of a mad tyrant hellbent on destroying the US, a man who is not a ‘rational adversary’, as one broadsheet columnist implies. Rather, this small, impoverished territory – North Korea’s GDP is $40 billion, the UK’s $2.3 trillion – is caught, as it has been for many, many years, in the nexus of other, far more powerful states’ interests. Its current, periodic outbreaks of almost absurd militarism, from nuclear missile launches to promises to reduce US-sponsored South Korea to a ‘sea of fire’, should be grasped in this context. A context, that is, in which the US attempts to flex some ageing moral muscle abroad, while the world’s emerging, rival superpower, China, desperately tries to maintain the status quo.

It’s worth remembering that North Korea owes its very existence to external political forces, in this particular case to the postwar standoff between the US and the USSR. The provisional agreement to divide the Korean peninsula in two in 1945 was eventually to lead to the Korean War (1950-53), in which the Communist-backed North battled itself to a standstill against the US-backed South. And, then, for nearly 40 years, North Korea’s fate was broadly subject to the vagaries of the Cold War.

Shamelessly exploiting dead children

The Philpott fire ugly face

The conviction of Mick Philpott for killing six of his kids has sparked a shroud-waving contest between enemies of welfare and a free press.

by Mick Hume 

Michael Philpott – or ‘Shameless Mick’ as he was known after his appearance on ITV’sJeremy Kyle Show – has been universally condemned for exploiting his children in both life and death. Since Philpott and his wife Mairead were convicted of killing their six children by setting fire to their Derby home, however, many others have appeared keen to use those dead kids for their own purposes.

For some, the jobless child-killer Philpott embodies the evil that is produced by the welfare state, proof that it must be slashed to the bone, if not abolished altogether. For others, the media coverage of the tragedy is typical of the evil tabloid press, proof that it should be controlled, if not closed down completely.

Both sides of this shroud-waving contest have effectively been exploiting the children’s deaths as an excuse to push their own pre-existing agendas. Mick Philpott came under suspicion after the house fire when police observed him play-acting and showing phony grief in a press conference. Perhaps we should be suspicious of what motives lie behind the expressions of pseudo-grief from some other quarters. Philpott does not appear to have a monopoly on the ‘shameless’ moniker here.

It would, of course, be hard for anybody to invent a more graphic cartoon ‘underclass’ villain than Philpott. He lived with and dominated two women and their 11 kids, forcing them to pay their wages and welfare benefits into his bank account. He was the father of 17 children by five women, children who he reportedly saw as ‘cash cows’ that could provide more state benefits to fund his ‘layabout lifestyle’. When one of the women understandably tired of this servitude and left with her five children, the prosecution claimed that the Philpotts and their friend Paul Mosley plotted to stage a house fire, rescue the remaining six children, frame the departed lover for arson, win back custody of her kids and hopefully get a better council house. The idiotic fantasy scheme went tragically wrong and the Philpotts’ six children died in their beds.

Whom the Gods Would Destroy …

Japan in the Grip of Utter Madness

By Pater Tenebrarum

“Quem deus vult perdere, dementat prius”, is an ancient proverb often wrongly attributed to Euripides, which says: “Whom God wishes to destroy, he first makes mad”. It evidently applies in spades to the new leadership of the Bank of Japan. What is so astonishing to us is that this obvious conclusion is not shared by anyone in the so-called 'mainstream'. In short, it seems the Gods have made a whole bunch of people mad.

It is a widely accepted shibboleth that for reasons that are never properly explained, 'deflation is bad for Japan'. Not deflation of the money supply, mind, as that has never once happened anyway. A mild decline in consumer prices is what is widely regarded as such an unmitigated evil.

This is such hair-raising nonsense one is almost at a loss for words. In a progressing unhampered market economy, falling prices for goods and services would be the normal state of affairs.  After all, economic progress is all about doing more with less, or putting it differently, it is all about increasing economic productivity by means of capital accumulation.

The idea that 'deflation is bad' has been reinforced by decades of Keynesian propaganda, but that constant repetition doesn't make it any more true. Of course, for those who are sitting closest to the printing press of the central banks, inflation is an advantage. Everybody else however gets shafted. And so Haruhiko Kuroda has apparently decided it would be a good idea to shaft the vast bulk of the population of Japan.

How to Stop the Korean War

In a far graver crisis, Kennedy did not hesitate to communicate with the culprit

By PATRICK J. BUCHANAN

“If you see 10 troubles coming down the road, you can be sure that nine will run into the ditch before they reach you,” said Calvin Coolidge, who ever counseled patience over the rash response.

Unfortunately, the troubles presented by North Korea’s Kim Jong Un seem unlikely to run into a ditch before they reach us.

For Kim has crawled out on a limb. He has threatened to attack U.S. forces in Korea and bases in Asia, even U.S. cities. He has declared the truce that ended the Korean War dead and that “a state of war” exists with the South. All ties to the South have been cut.

The United States has sent B-52s and stealth fighters to Korea and anti-missile warships to the Sea of Japan. Two B-2 bombers flew from Missouri to Korea and back in a provocative fly-by of the Hermit Kingdom. And both South Korea and we have warned that, should the North attack, swift retribution will follow.

Kim Jong Un is in a box. If he launches an attack, he risks escalation into war. But if his bluster about battling the United States turns out to be all bluff, he risks becoming an object of ridicule in Asia and at home.

Why is he playing with fire? Because his father and grandfather did, and got away with murder.

In 1968, Kim Il Sung hijacked the U.S. intelligence ship Pueblo and held its crew hostage. America, tied down in Vietnam, did nothing. In 1976, North Koreans ax-murdered two U.S. officers in the DMZ. In 1983, Pyongyang tried to assassinate South Korea’s president in Burma and blew up three members of his cabinet. In 1987, North Koreans blew up a South Korean airliner.

The Bitter Legacy of Mickey Mouse

Developments of enormous consequence sometimes follow the most mundane of motives

By RON UNZ

During the mid-1990s, the giant Disney Corporation became concerned that its 1928 copyright on Mickey Mouse was close to expiration.  Deploying heavy lobbying efforts, it persuaded Congress to pass and President Bill Clinton to sign what was officially entitled the 1998 Sonny Bono Copyright Term Extension Act, but more informally known as the “Mickey Mouse Protection Act.”  The result was to extend Mickey’s copyright for another twenty years, and perhaps indefinitely if future corporate lobbying efforts bore similar fruit.

Now I have no particular burning desire to watch Mickey Mouse cartoons without paying for them, and I suspect that those around the world who feel otherwise simply ignore such legal restrictions, just as they watch pirated blockbuster movies just weeks after they are released into the theaters.  So if the Disney executives had merely wanted to protect their rights to old Walt’s lucrative rodent, I wouldn’t have cared in the least.  But since paying Congresspersons to enact such narrowly tailored legislation might have appeared unseemly, they decided to extend all other existing copyrights as well, including the vast number of written works possessing no financial but much intellectual value.

As a direct consequence, the continuous yearly expiration of old copyrights came to a screeching halt at the year 1922, and has moved no further in the last fifteen years. Everything published in America prior to 1923 may be copied, read, and made available without restriction, but for most other works, their precise legal status remains unclear, given the difficulty and inconvenience of determining individual copyright-renewal filings or tracing the legal chain of ownership across sixty or seventy years.  Hence so many of the legal battles subsequently undertaken by Google and various other entities over the legitimate interpretation of “Fair Use” doctrine and the question of what can or can’t be made available on the Internet.

Stating the obvious

Cyprus controls an “omnishambles”

By Hugo Dixon

Cyprus’ capital controls are an “omnishambles”. If the Argentine-style “corralito” really can be lifted in seven days, the damage could be contained. But that doesn’t seem credible. Extended controls could spawn bribery, sap confidence, further crush the economy, spread contagion and ultimately lead to the country’s exit from the euro.

The lesson of capital controls elsewhere is that, once they are imposed, they are hard to remove. Iceland’s curbs are still in place five years after they started. In Argentina, they lasted a year.

There’s little reason to suppose it will be much different in Nicosia. After all, the restrictions – which limit both the amount of money people can take from their banks and the amount they can transfer abroad – have been imposed because the lenders do not have enough access to ready funds. If there’s not sufficient liquidity today, why should anybody believe there will be enough in a week, a month or even a year?

The shambolic manner in which the restrictions have been implemented also rams home the fact that it’s unlikely they will be lifted quickly. An earlier leaked draft didn’t mention any daily limits on cash withdrawals; the final version set it at 300 euros per person. The draft said people could take 3,000 euros abroad per trip; in the end, it was cut to 1,000 euros.

A central bank spokesman said the controls would last four days; in the end it was seven, although the central bank’s own press release didn’t even mention a timetable. The tightening of the controls between the leaked draft and the final version might suggest that liquidity is in pretty short supply.

The internal inconsistency of the controls also seemingly gives a lie to the idea that the controls will last only a week. They prevent people spending more than 5,000 euros a “month” abroad on their credit cards; they limit the transfers to people studying abroad to 5,000 euros per “quarter”. Why are there monthly and quarterly limits if the whole exercise is supposed to last only a week?

Inconvenient Headlines

Life begins when "you take the baby home from the hospital."

Dr. Kermit Gosnell - Serial Killer

By Mona Charen 

It's a deeply felt conviction among liberals that they are the caring party. It's not too much to say that liberals are quite confident that they are nicer, more moral people than conservatives.

It must require truly titanic powers of denial for the "moral" and "compassionate" party to maintain its position on abortion -- a position that leads them into some macabre rationalizations. Consciences among the morally superior party are agreeably quiescent.

But recent headlines have not been similarly cooperative. In Florida, the legislature is considering a variant of the "Born Alive Infants Protection Act," which would require that abortionists provide medical assistance to infants who are "accidentally" born alive and kicking during an abortion. (Then State Senator Barack Obama vociferously opposed similar legislation in Illinois.)

Ms. Alisa LaPolt Snow, representing the Florida Alliance of Planned Parenthood Affiliates, testified against the bill. Florida representative Jim Boyd, apparently unsure that he had understood her correctly, asked:

"So, um, it is just really hard for me to even ask you this question because I'm almost in disbelief. If a baby is born on a table as a result of a botched abortion, what would Planned Parenthood want to have happen to that child that is struggling for life?"

Ms. Snow responded that her organization "believes that any decision that's made should be left up to the woman, her family and the physician." In short, as the Weekly Standard summarized, Florida Planned Parenthood is in favor of "post-birth abortion." This is consistent with the position of the president of the United States and most members of the caring party.

Ms. Snow was asked why she didn't support simply transporting a breathing, moving infant to a hospital where he or she would have the best chance of survival. Snow developed a sudden concern for ambulance convenience: "(T)hose situations where it is in a rural health care setting, the hospital is 45 minutes or an hour away, that's the closest trauma center or emergency room. You know there's just some logistical issues involved that we have some concerns about." Really? Logistical concerns?

The Pharaoh Weeps

Egypt is perched on the precipice of chaos

by JUDITH MILLER

The Cairo subway was one of Hosni Mubarak’s proudest achievements. Built at a cost of several billion dollars in the late 1980s, it reflected Egypt’s ancient civilization and modern Egypt’s national pride. Air-conditioned in summer, quiet as a pharaoh’s tomb, the subway was well-lit and beautifully appointed. Display boxes of ancient Egyptian artifacts lined its platforms. A special police unit kept the stations clean, safe, and graffiti-free.

Then came the Egyptian revolution in January and February 2011. Today, the subway that transports roughly 4 million passengers a day throughout this vast city of roughly 17 million is a wreck. The tile walls of its central hub, Tahrir Square—the epicenter of the protests that forced Mubarak from power—are chipped and filthy. Its platforms are strewn with litter. A main passageway from the platform to the square has been dark for weeks; no one has changed the burned-out bulbs. There are no policemen in sight. The passageways stink.

The subway is a metaphor for post-revolutionary Egypt. The square that symbolized the revolution is now occupied by riffraff and protestors who assemble periodically to show the government that the people remain in control. Traffic around the Middle East’s largest public square has been diverted.

While Cairo may still be safer than Chicago, or even New York, Egyptian women, for the first time in memory, fear shopping or taking cabs at night. Cairo’s police, blamed for the deaths of protesters and unhappy with their pay, working conditions, and lack of respect, sit in their precinct houses, refusing to provide security that Egyptians once took for granted. Tourists have vanished, depriving Egypt of a vital source of jobs and hard currency. Unemployment has risen from 9.8 percent in 2010 to 13 percent today. Inflation is officially 8.7 percent, though more like 9.5 percent, or even higher, for food and basic commodities, say economists. Even these figures are misleading, since an estimated 40 percent of Egypt’s economy is “black” or informal, unregulated by and unreported to the government, according to Hazem el-Beblawi, an economist who served as deputy prime minister under the army’s unpopular transition government in 2011. Beblawi, a strong advocate of free-market liberalism who resigned his post that year, accusing the army of taking Egypt in the “wrong direction,” says youth unemployment probably tops 19 percent. Egypt, he estimates, has less than its officially claimed $13.5 billion in hard-currency reserves (versus $36 billion before the revolution). “Egypt imports roughly $60 billion worth of goods and services,” he says. “It exports under $25 billion.”

Beyond Parody

Talk to Senior Officials of the Central Committee of the Workers’ Party of Korea

Let Us Brilliantly Accomplish the Revolutionary Cause of Juche, Holding the Great Comrade Kim Jong Il in High Esteem as the Eternal General Secretary of Our Party KIM JONG UN

April 6, Juche 101 (2012)

In the run-up to the significant Day of the Sun marking the centenary of the birth of the great leader Comrade Kim Il Sung, we will be holding the Fourth Conference of the Workers’ Party of Korea amidst great expectation and interest of our people and foreigners.

The  forthcoming   conference   will   discuss  and  decide  on  the  agenda  items  of  acclaiming  General Kim Jong Il as the eternal General Secretary of the WPK and glorifying forever his revolutionary career and immortal revolutionary exploits, and amend the Rules of the Party accordingly. It will also recall some members of the central leadership body of the Party and hold an election to fill the vacancies, which is a regular undertaking of a Party conference.

We should ensure that the conference serves as an epoch-making event that sets up an important milestone in holding up General Kim Jong Il, together with President Kim Il Sung, as the eternal leader of our Party and in accomplishing the ideology and cause of the President and the General with credit.

Through the conference, we should clearly show with which faith, will and moral obligation we, the descendants of the President and soldiers and devoted followers of the General, hold them in high esteem and how forcefully we have turned out to accomplish their ideology and cause.

We should hold the General up invariably as the General Secretary of our Party.

To hold him in high esteem as the eternal General Secretary of our Party is, in principle, a demand for consistently holding fast to his ideology and lines and advancing our revolutionary cause victoriously.

Holding him up as the eternal General Secretary of the WPK is never symbolic in itself. It means having him at the post of General Secretary of the Party invariably and conducting Party building and Party activities in accordance with his ideology and intention.

The Proper Use Of Credit

Great fortunes are built on the proper use of credit. Easy credit leads to mal-investment and wealth destruction

by Charles Hugh-Smith
We cannot understand our fundamental financial problems if we do not understand the proper use of credit. Credit has a key role in capitalism; credit-starved economies are underdeveloped economies, as economist Hernando De Soto explained in his masterwork, The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else.

In the chronically underdeveloped economies De Soto describes, households have assets--land, dwellings, small businesses--but since the assets do not have legally recognized status as "property" (because the system for recognizing and registering property is both cumbersome and corrupt), they cannot act as collateral for borrowed capital, i.e. loans.

As a result, the majority of the assets are "dead capital," difficult to sell, pass on to future generations or use as collateral.

Great fortunes are built on the proper use of credit. The borrower needs capital to expand his/her enterprise, and the lender needs a fast-growing enterprise with collateral and an income stream to support a low-risk, high-yield loan.

We can profitably look to Colonial America as an example of a credit-starved economy. In the wake of the Revolutionary war and the ratification of the Constitution (1789), the U.S. financial system was a mess: debts left by the war burdened the new government, which historian Thomas McCaw noted "started on a shoestring and almost immediately went bankrupt."

Differing views on the role of the central government, central bank and credit splintered the political elite, with Hamilton squaring off against Madison and Jefferson (though Madison's views were by no means identical to Jefferson's).

Meanwhile, in the real economy, ordinary farmers and entrepreneurs were desperate for long-term credit to fuel their rapidly growing enterprises. Though states were banned by the Constitution from issuing their own currency, states got around this prohibition by granting bank charters. The banks promptly issued the credit that an entrepreneurial economy needed.

Second Thoughts

Germans may want out

By Wolf Richter

Anti-euro movements were pushed aside or squashed by political establishments across the Eurozone. There is, for example, Marine Le Pen, of the right-wing FN in France—“Let the euro die a natural death,” is her mantra. Though she finished third in the presidential election, her party has next to zero influence in parliament. Austria has Frank Stronach, who is trying to get an anti-euro party off the ground, without much effect. Germany has the Free Voters, an anti-bailout party that has been successful in Bavaria but not on the national scene.

Then Italy happened. Two anti-austerity parties with no love for the euro, one headed by Silvio Berlusconi the other by Beppe Grillo, captured over half the vote—and locked up the political system. Newcomer Grillo had thrown the status quo into chaos, for better or worse. Suddenly, everyone saw that anger and frustration could accomplish something.

It stoked a fire in Germany. Chancellor Angela Merkel’s euro bailout policies—“There is no alternative,” is her mantra—hit increasing resistance, particularly in her own coalition, but wayward voices were gagged.

“Time has come,” Konrad Adam called out as a greeting to the crowd Monday night and reaped enthusiastic applause. Despite the snowy weather, over 1,200 people had shown up at the Stadthalle in Oberursel, a small town near Frankfurt, for the first public meeting of the just-founded association, Alternative for Germany (AfD), that isn’t even a political party yet, and that wants to be on the ballot for the federal elections on September 22.

So Adam, one of the founders and a former editor at the Welt and FAZ, was pressed for time. It’s wrong to say there’s no alternative to the euro bailouts, he said. “Politics is nourished by alternatives.” He introduced his demands:

- Dissolution of the “coercive euro association.” An orderly end of the monetary union. Countries should be able to legally exit if they “could not, or did not want to remain.” The euro would be replaced by parallel national currencies or smaller, more stable monetary unions.

Leaving Race Behind

Our growing Hispanic population creates a golden opportunity

By Amitai Etzioni

Some years ago the United States government asked me what my race was. I was reluctant to respond because my 50 years of practicing sociology—and some powerful personal experiences—have underscored for me what we all know to one degree or another, that racial divisions bedevil America, just as they do many other societies across the world. Not wanting to encourage these divisions, I refused to check off one of the specific racial options on the U.S. Census form and instead marked a box labeled “Other.” I later found out that the federal government did not accept such an attempt to de-emphasize race, by me or by some 6.75 million other Americans who tried it. Instead the government assigned me to a racial category, one it chose for me. Learning this made me conjure up what I admit is a far-fetched association. I was in this place once before. When I was a Jewish child in Nazi Germany in the early 1930s, many Jews who saw themselves as good Germans wanted to “pass” as Aryans. But the Nazi regime would have none of it. Never mind, they told these Jews, we determine who is Jewish and who is not. A similar practice prevailed in the Old South, where if you had one drop of African blood you were a Negro, disregarding all other facts and considerations, including how you saw yourself.

You might suppose that in the years since my little Census-form protest the growing enlightenment about race in our society would have been accompanied by a loosening of racial categories by our government. But in recent years the United States government has acted in a deliberate way to make it even more difficult for individuals to move beyond racial boxes and for American society as a whole to move beyond race.