‘I have a bad dream…’

Rights go wrong when there are no wrongs that rights can right

by Jon Holbrook
Fifty years ago this August, Martin Luther King led the historic March on Washington where he delivered his ‘I have a dream’ speech. He called for an end to racism and dreamed that one day people would be judged not ‘by the colour of their skin but by the content of their character’. His address to 250,000 civil-rights supporters, from the steps of the Lincoln Memorial, was a defining moment of the American civil rights movement.

1963 was also the year that the US Congress passed the Equal Pay Act, which prohibited wage differentials based on sex. The following year the Civil Rights Act outlawed major forms of discrimination against racial, ethnic, national and religious minorities, and women. The most significant consequence of this landmark legislation was the outlawing of racial segregation in schools, at the workplace and at public accommodations. The era of Jim Crow laws was coming to an end.

Despite the apparent success of the American civil-rights movement in the 1960s, in Rights Gone Wrong Richard Thompson Ford argues that the civil-rights approach to social justice reached its high-point sometime in the early 1970s and has been in decline ever since.

Today’s civil-rights movement, argues Ford, is a movement that seems incapable of addressing social injustice. Indeed, its modern-day claims are more likely to corrupt the struggle for equality by being either daft or counterproductive. Ford gives many examples, particularly of sex-discrimination claims, where equality laws have produced results bereft of common sense. In 1985, Dennis Koire asserted his civil rights after being excluded from a ladies’ night bar. He was so incensed at being told to come back when he was wearing a skirt that he took his complaint to the Californian Supreme Court, which ruled that his civil rights had been violated. His success marked the beginning of the end for ladies’ nights across the nation as courts in Iowa, Pennsylvania, Connecticut and Hawaii found that ladies’ nights and similar female promotions or discounts constituted unlawful sex discrimination.

It’s the public sector we should reform, not the public

Britain’s bureaucratically endorsed culture of entitlement and dependency

by David Clements 

Public services in the UK cannot be sustained at their current level. They are under unprecedented pressure from the global financial crisis, the slow growth of the UK’s service-based economy, and the ageing society. Consequently, there need to be drastic reductions in what is currently very high but unproductive public spending. One in four working-age adults work for the public sector - councils are often the biggest local employers and the NHS alone employs 1.7million people, making it the largest employer in Europe. Nearly half of GDP (around £700 billion) is spent on public services, including welfare benefits which account for about £200 billion. In a bid to cut public expenditure by £80 billion by 2015, tens of thousands of workers have already been made redundant. But, says Tom Manion, ‘radical’ social landlord and author of The Reward Society, it is the deterioration of our ‘attitudes, values and behaviour’ that is most costly of all.

UK authorities, it seems, spend a ridiculous amount of resources on dealing with a minority of people who are just not behaving as they should. It would be far better, Manion says, to encourage good behaviour: ‘If bad behaviour improved, we as a society would have a lot more resources to spend.’ Putting to one side the childlike simplicity of Manion’s argument, he is perceptive enough to identify a genuinely big problem - one of the defining ones of our age - and its many manifestations. We now accept as normal the ‘dishonesty, idleness and lack of thought for others’ that in the past wouldn’t have been tolerated, he says. Dysfunctional families who ‘run health, police and social services ragged’ place a burden of £8 billion per year on the state. A welfare safety net has ‘become a spider’s web, trapping people in dependency and making poverty comfortable’. There is a crippling ‘contagion’ of absenteeism in the workplace: a ‘sickness sub-culture’ not confined to the public sector but nonetheless identifiable with it. Never mind the ‘yoof of today’, it is not unusual for groups of young adultsto be making an intimidating nuisance of themselves. These ‘screeching, lurching lads and ladettes, peeing in the gutter and falling into fountains’ at the weekend are ‘back behind the building-society counter’ come Monday morning. ‘Their parents would not have behaved like that’, says Manion, ‘so why do they?’. Why indeed?

He answers his own question. Old, ‘decent’ working-class values have been lost and we’re the poorer for it. He explains that, as a ‘bad boy’ himself once, his behaviour completely violated the standards of the working-class culture he grew up in, but ‘I knew that and took the consequences’. While the complaint that rent arrears have gone through the metaphorical roof is made by Manion the landlord, he also remembers how his mother’s generation ‘took pride in paying their rent, or indeed any bill, on time’. He invites us to compare this with the points-based public-housing allocation system that has created an ‘arms race of need’ in which ‘people’s problems become their most valuable assets’. In place of the independence and pride of an earlier generation is a bureaucratically endorsed culture of entitlement. It has ‘infantilised’ tenants and kept them ‘locked into the dependency frame of mind’, unable or unwilling to do anything for themselves. ‘Downloading help and sympathy on to people in perceived need doesn’t improve their situation’, he explains. ‘They’ve got to stand up on their own two feet and find their own way of including themselves in society.’

Field of nightmares

Imperial wars have a way of coming home

By Tom Engelhardt 
Chalmers Johnson's book Blowback: The Costs and Consequences of American Empire was published in March 2000 - and just about no one noticed. Until then, blowback had been an obscure term of CIA tradecraft, which Johnson defined as ''the unintended consequences of policies that were kept secret from the American people''. In his prologue, the former consultant to the CIA and eminent scholar of both Mao Zedong's peasant revolution and modern Japan labeled his Cold War self a ''spear-carrier for empire''. 

After the Soviet Union disappeared in 1991, he was surprised to discover that the essential global structure of that other Cold War colossus, the American superpower, with its vast panoply of military bases, remained obdurately in place as if nothing whatsoever had happened. Almost a decade later, when the Evil Empire was barely a memory, Johnson surveyed the planet and found ''an informal American empire'' of immense reach and power. He also became convinced that, in its global operations, Washington was laying the groundwork ''all around the world... for future forms of blowback.''

Johnson noted ''portents of a twenty-first century crisis'' in the form of, among other things, ''terrorist attacks on American installations and embassies''. In the first chapter of Blowback, he focused in particular on a ''former protege of the United States'' by the name of Osama bin Laden and on the Afghan War against the Soviets from which he and an organization called al-Qaeda had emerged. It had been a war in which Washington backed to the hilt, and the CIA funded and armed, the most extreme Islamic fundamentalists, paving the way years later for the Taliban to take over Afghanistan.

Talk about unintended consequences! The purpose of that war had been to give the Soviet Union a Vietnam-style bloody nose, which it more than did. All of this laid the foundation for... well, in 1999 when Johnson was writing, no one knew what. But he, at least, had an inkling, which on September 12, 2001, made his book look prophetic indeed. He emphasized one other phenomenon: Americans, he believed, had ''freed ourselves of ... any genuine consciousness of how we might look to others on this globe''. 

With Blowback, he aimed to rectify that, to paint a portrait of how that informal empire and its historically unprecedented garrisoning of the world looked to others, and so explain why animosity and blowback were building globally. After September 11, 2001, his book leaped to the center of the 9/11 display tables in bookstores nationwide and became a bestseller, while ''blowback'' and that phrase ''unintended consequences'' made their way into our everyday language. 

Chalmers Johnson was, you might say, our first blowback scholar. Now, more than a decade later, we have a book from our first blowback reporter. His name is Jeremy Scahill. In 2007, he, too, produced a surprise bestseller, Blackwater: The Rise of the World's Most Powerful Mercenary Army. It caught the mood of a moment in which the George W Bush administration, in service to its foreign wars, was working manically to ''privatize'' national security and the US military by hiring rent-a-spies, rent-a-guns, and rent-a-corporations for its proliferating wars. 

A Specter that Haunts the Kremlin

Will Khodorkovsky Be Released?

By Matthias Schepp

Mikhail Khodorkovsky, once Russia's richest man and Putin's strongest adversary, could soon be released from prison. Can the polarizing oil tycoon reinvigorate a beleagered opposition?

Standing in the midst of wool socks from Armenia and hats from Turkey, Anna, the street market vendor, lowers her voice. At the onset of winter, the heat remained off for many weeks in the city's apartments -- the fault, she says, of "this oligarch who has fallen upon us like a meteorite from the sky."

Anna hates Mikhail Khodorkovsky. Before his arrest he was Russia's richest man, while she still remains so poor that she has to supplement her meager monthly pension of less than €100 ($130) by selling cheap clothing.

Her market stall is on the outskirts of Segezha, a cheerless town of 30,000 inhabitants in a desolate part of the country. Moscow is 900 km (600 miles) away, and the Finnish border is nearby. In the 1930s, Stalin sent criminals and political enemies to this remote corner of the country, where over 100,000 of them died.

A gravel road lined with fir trees leads to Correctional Camp Seven. The buses of line number 4 are mired in slush and mud, as they are every spring. At the last bus stop, there are walls with barbed wire, watchtowers and a sign warning visitors: "No photos allowed." A total of 1,300 prisoners live here, including the most prominent inmate, Khodorkovsky, who has been incarcerated at the camp for nearly two years now. Is it possible that he will no longer be among them soon?

There has been a flurry of speculation recently that Moscow may order Khodorkovsky's release. Russia's Supreme Court has sent for the files from the first two trials against the oligarch. Due to evident procedural errors, his 11-year prison sentence could be further reduced and the magnate could soon be a free man again.

A Threat to the Power Structure

On the other hand, the centrist daily newspaper Nezavisimaya Gazeta writes that the Kremlin is currently preparing a third criminal case against Khodorkovsky -- one that could put him behind bars again for two decades, this time for alleged contract killings. Indeed, if Khodorkovsky were freed, he would again pose a threat to President Vladimir Putin's power structure. He could demand the return of his oil empire, which was broken up by Putin's friends, and become a figurehead for the faltering opposition. Its most popular leader, blogger Alexei Navalny, was put on trial just last week. State prosecutors accuse him of embezzlement. Navalny alleges that the indictment was initiated by the Kremlin, which wants to see him disappear behind bars for years just like Khodorkovsky.

Immigration Gambles

Political correctness has replaced self-preservation

By THOMAS SOWELL
Britain’s late Prime Minister Margaret Thatcher said it all when she wrote that the world has “never ceased to be dangerous,” but the West has ”ceased to be vigilant.”

Nothing better illustrates her point than the fact that the West has imported vast numbers of people who hate our guts and would love to slit our throats. Political correctness has replaced self-preservation. The Boston Marathon killer who set a bomb down right next to an eight-year-old child is only the latest in an on-going series of such people.

Senator Patrick Leahy has warned us not to use the Boston Marathon terrorists as an argument against the immigration legislation he advocates. But if we are not to base our laws on facts about realities, what are we to base them on? Fashionable theories and pious rhetoric?

While we cannot condemn all members of any group for what other members of their group have done, that does not mean that we must ignore the fact that the costs and dangers created by some groups are much greater than those created by other groups.

Most members of most groups may be basically decent people. But if 85 percent of group A are decent and 95 percent of group B are decent, this means that there is three times as large a proportion of undesirable people in group A as in group B. Should we willfully ignore that when considering immigration laws?

It is already known that a significant percentage of the immigrants from some countries go on welfare, while practically none from some other countries do. Some children from some countries are eager students in school and, even when they come here knowing little or no English, they go on to master the language better than many native-born Americans.

But other children from other countries drag down educational standards and create many other problems in school, as well as forming gangs that ruin whole neighborhoods with their vandalism and violence, and cost many lives.

Are we to shut our eyes to such differences and just lump all immigrants together, as if we are talking about abstract people in an abstract world?

Understanding German Politics

Political Geography in Germany

Inquiring minds in the US note the upcoming German election and may be wondering about the platforms of the major political parties. Reader Bernd from Germany explains.

Die Linke (The Left): Die Linke is made up of the former SED/PDS (The East German Communist Ruling Party), some former West German Communist and Socialist Parties and a “rebel group” of the SPD. They all have merged and are now called "Die Linke". By and large they have a communist/socialist platform, albeit not Stalinist. Their main requests are: dissolve NATO and replace it with a new organization to include Russia in it, end all wars, control or nationalize all relevant banks and some crucial industries, increase support for the poor, raise taxes for the rich (above income of 60k Euros gradually go to 75%), introduce a stiff wealth and inheritance  tax. They are pro Euro and want the introduction of Eurobonds immediately. To alleviate the economic crisis in Europe they advocate some serious deficit spending for social and work programs. They have voted against ESM; EFSF and Cyprus deal in Parliament.

SPD (Social Democrats): SPD is the grand old Social Democratic Party, with a wonderful and long tradition. SPD originated from the worker's movement. Its first party program is from 1869. It the only party that tried to stop Hitler's power grab by opposing the emergency laws in 1933. Many went to concentration camps for opposing Hitler. In post-World War II Germany SPD provided three Chancellors, Willy Brandt, Helmut Schmidt and Gerhard Schröder. All three Chancellors were major reformers in Germany for one or the other topic.  SPD lost its original power base in the wake of Schröder's reforms in the early 2000s. SPD is a staunch pro Euro party. They also want Eurobonds immediately, as well as a common fiscal policy, a bank union and a quick unification of Europe.

Die Grünen (The Green Party): Die Grünen started as a mix of 1968 communists/socialists and anti-nuclear energy activists in West Germany. The second part is made up of some left over former East German anti SED “rebels” who helped to bring down East Germany.  Today this is the party for so the so-called "politically correct". In Germany we call them the Latte Macchiato Moms/Dads. The typical party member is a well-paid Government official or teacher with a work week of 36 hours. They believe firmly in manmade climate change and want to tax and spend their way to eliminate the CO-2 footprint. No amount of money is too much for preventing climate change. They are staunch pro Euro advocates similar to the SPD.

The Real Risks of Amnesty

American competitiveness and educational achievement are the worry, not an increased threat to national security

By HEATHER MAC DONALD

The proponents of the Senate immigration amnesty bill are right about one thing: The recent Boston mayhem is largely irrelevant to immigration reform. It’s unrealistic to think that immigration officials should have divined the young Tsarnaev brothers’ future homicidal plans when the family’s asylum application was accepted in 2002 or even in 2007, when family members gained legal permanent-resident status. Perhaps the FBI’s interview with Tamerlan Tsarnaev in 2011 for possible connections to Chechen terrorists should have stalled his younger brother Dzhokhar’s receipt of U.S. citizenship in 2012, but at least the Department of Homeland Security put Tamerlan’s own citizenship application on hold for further review, in light of the earlier FBI inquiry. If there was a government failure here, it would appear to have been the FBI’s, not the DHS’s, but more facts need to come out before reaching even that conclusion.

True, the asylum and refugee programs—a relatively small subset of legal immigration—suffer from fraud, but that fraud overwhelmingly consists of faking a basis for asylum, not covering up terrorist intentions. We can expect fraud to be an enormous problem in the proposed amnesty process, as it was in the 1986 amnesty, but it, too, will be largely concerned with manufacturing eligibility rather than with concealing terror plans. There is plenty to scrutinize in the Senate’s bill without alleging an exaggerated risk of terrorism, and it would be a mistake for skeptical senators to make national security a centerpiece of their inquiry. As horrific as every terror attack is, the incidence of domestic terrorism and the percentage of immigrants who commit it remain extremely low. The risks in the proposed amnesty law relate rather to America’s core immigration problem: the mass illegal entry of uneducated, unskilled aliens who pose no terror threat but who have a concrete effect on our educational and economic competitiveness.

Utopian Union Fantasy

California Vs Algebra

By Ed Ring.

“Jennifer Muir, a spokeswoman for the Orange County Employees’ Association, which represents more than 18,000 public employees in Orange County, said the California Public Policy Center’s study was a politically motivated attack on public employees and unions. Aside from promoting the center’s anti-public employee union agenda, Muir said, the reports are misleading and shift focus away from the discussions that matter most. Union leaders have long urged for people to consider the possibility that private-industry employees are being undercompensated and should receive retirement benefits and health coverage.”

Orange County Register, April 19, 2013

The study Muir refers to, entitled “Irvine, California – City Employee Compensation Analysis,” was published on April 8th, 2013, by our parent organization, the California Public Policy Center. To call this study “a politically motivated attack on public employees and unions,” as Muir alleges, is itself a distraction. It’s easy, and necessary, to impugn the motives behind information when the information itself is so embarrassing.

Orwell does America

Everyone still has the right to go out shopping

By Pepe Escobar 

Welcome to the sweet abyss of an Orwellian vortex. 2013 increasingly looks like 1984. 
In two previous articles, for RT RT and for Asia Times Online I have looked into the superimposed levels of blowback implied by the Boston bombing.
With still so many unanswered questions regarding what took place on the ground in Boston after the bombing, it's time to look at an extra, possible Top Ten list of lingering absurdities. And this without sidestepping other unanswered crucial questions, such as why a bomb drill - organized by Craft - was going on during the marathon at which the bombing took place; and why it was vehemently denied that a bomb drill was going on. For this current set of questions, I'm grateful for the help of Asia Times Online's Bostonian readers.

Pick your Mercedes 

1. Will the FBI come clean and admit they knew everything there is to know about Tamerlan Tsarnaev - after five years of monitoring/controlling him - and still lied to public opinion by swearing they knew nothing about his and his brother's identity, posting their photos and asking for the public to act ''as eyes and ears'' to identify those ''suspects''? 

2. Since 9/11, the preferred FBI modus operandi is to use informants to lure ''potential'' terra-rists to act. See for example the Fast and Furious-style Iran cum Mexican cartel plot. There's a strong possibility the Tsarnaev brothers were set up. In this case, is there anyone anywhere among the vast US intel apparatus investigating the FBI investigators?

3. Will the FBI explain a tsunami of false reports by the usual, anonymous ''US officials'' of explosions or ''unexploded bombs'' - at two Boston hotels, a court house, and at the JFK library? 

4. A Saudi student, injured at the bombing, who was in the US via a legal student visa, is suddenly deported on ''national security grounds'', even as investigators found ''unusual burns'' on his hand inconsistent with the injuries of other victims. He may have been a member of a Saudi clan notorious for its al-Qaeda connections. The FBI ''investigation'' is suddenly dropped shortly after the Saudi ambassador in the US held an unscheduled meeting with President Barack Obama. Add to it that even before the smoke had cleared, the Israel Lobby and the notorious disinformation website DEBKA were pointing their fingers at ''domestic terrorists with Middle East connections''. 

5. The description of the car hijacked by the brothers, a Mercedes E350 SUV, matches the description of their car left at a service station in Cambridge for two weeks prior to the bombing. A mechanic in Cambridge said Dzhokhar, Tamerlan's brother, picked up his "black Mercedes SUV" on Tuesday, the day after the marathon. The two cars may be one and the same; that blows up the whole official ''carjacking'' narrative.

6. Additionally, there's a media blackout on the owner of the allegedly hijacked Mercedes, who in theory managed to escape and call the police, who maintains that the brothers went to three ATMs and withdrew US$800 from his account - not before telling him they were the ''marathon bombers and had killed an MIT police''. The driver said he was let off at a gas station on Memorial Drive in Cambridge. But some witnesses saw Dzhokhar at the station's convenience store - without any driver. Then the narrative of the brothers robbing a convenience store was revealed to be false. Police scanners referred to a "black top" person. Still, the official narrative is that the Tsarnaev brothers were at the same place and the same time of the robbery.

Italy Led by Letta Brings Berlusconi Back as Winner

An opportunity for Berlusconi to regroup, catch his breath and prepare for the next round of elections

By Andrew Frye & Alessandra Migliaccio
Silvio Berlusconi, the three-time prime minister and two-time convicted lawbreaker, won a path back to power in Italy by outmaneuvering rivals during an eight- week political stalemate.

A year and a half after resigning in near-disgrace, the 76- year-old billionaire became the key figure in talks that began today to form the next Cabinet after the Democratic Party’s Enrico Letta was appointed prime minister. Berlusconi and his 241 lawmakers, the second-biggest contingent, hold the votes Letta, 46, needs to secure a parliamentary majority.

Berlusconi is one of the last of his generation standing after outgoing Premier Mario Monti, 70, was rejected by voters in February and 61-year-old Pier Luigi Bersani was discarded in a Democratic Party mutiny. Berlusconi’s resilience, even as he battles criminal charges from tax fraud to sexual misconduct, has gained him the admiration of allies and adversaries alike.

“Silvio Berlusconi is the real winner,” Nichi Vendola, an opponent and head of the Left, Ecology and Freedom party, said April 20 after the owner of broadcaster Mediaset SpA (MS)laid the groundwork to be part of the governing alliance. Vendola, a Bersani ally, said today he won’t support Letta.

Hizbollah's strategy in Syria will accelerate sectarian war

Lebanese clerics calling for jihad in Syria is only the tip of the iceberg

By Hassan Hassan

Fears that the Syrian conflict may spill over the country's borders are being realised, but in reverse: the Lebanese conflict is coming to Syria.

Ahmed Al Aseer, an influential Lebanese Sunni cleric, declared on Monday that jihad in Syria is now mandatory for all capable Muslims. Sheikh Al Aseer said that the decision was taken after Hizbollah's involvement in Syria became clear.

"We felt that [Hizbollah] was militarily involved and everyone was denying," he said in a video statement posted on YouTube on Monday. "But now that has become clear."

Hizbollah's initial denial of involvement in Syria appears to have changed to justification, primarily because it has become difficult for the group to continue denying reports as an increasing number of dead fighters are sent back from Syria. Although the party's leader, Hassan Nasrallah, admitted in October that party members were fighting alongside the Assad regime, he said those fighters were acting as individuals and not under his orders.

This escalation should not be played down as part of traditional Lebanese sectarian bickering. Hizbollah's decision to openly support the Syrian regime is a serious move that merits a closer look.

The obvious question is, why now?

According to accounts, the party's fighters in Syria are numerous and well-trained. Additionally, the structure of Hizbollah allows it to order the fighters to withdraw if needed.

But why would the party opt to wage war against the people of a neighbouring country that is far larger than Lebanon, offers access to its allies in Iraq and Iran, and most of all, has a vast number of supporters inside Lebanon?

The escalation of Hizbollah's involvement in Homs follows a series of media reports that suggests the party, in coordination with Tehran, has moved aggressively and openly to back the regime of Bashar Al Assad. According to the Kuwaiti newspaper Al Rai, Nasrallah visited Tehran this week and met with Supreme Leader Ayatollah Ali Khamenei and the commander of the Al Quds Brigades, General Qasim Sulaimani.

On Monday, Mr Al Assad expressed resentment towards Lebanon's "dissociation policy" during a meeting with a pro-Hizbollah Lebanese delegation. The Syrian president said: "A person cannot dissociate himself if that person is within a circle of fire and that fire is getting closer to him."

Also on Monday, the interim leader of the Syrian opposition's National Coalition, George Sabra, accused Hizbollah of declaring war against the Syrian people; as proof he said party members have fought against the rebels in the town of Qusayr, near the Lebanese border.

The obvious fragility of British credit

Moody’s Doesn’t Rate

By THEODORE DALRYMPLE

If the incompetence of the credit-rating agencies needed further proof, Moody’s recent downgrading of Britain would have provided it. It was not the downgrading that showed Moody’s incompetence, however; it was the high ranking that it had accorded Britain in the first place. Britain has been a bad long-term bet for years now. Anyone with the slightest instinct for economic affairs would long ago have foreseen the country’s poor outlook.

Indeed, a single speech in 2004 by Anthony Blair, the prime minister at the time, should have been sufficient to alert observers to the dangers. In the speech, Blair boasted that, after seven years in office, he had nearly doubled spending on public education and more than doubled spending on the National Health Service, Britain’s Soviet-style health-care system. He also promised that NHS spending would rise by another 50 percent over the next four years (a promise that, atypically, he kept). Though most of the money paid the wages of a growing number of government workers, Blair repeatedly referred to the spending increases as “investments.” So did Gordon Brown, his chief economics minister. Blair felt it unnecessary to provide evidence that this spending brought actual benefit, economic or otherwise, or to consider its possible costs. He spoke as if the money came from a generous extraterrestrial donor and not from higher taxes and government borrowing. A country with a government that cannot tell the difference between investment and expenditure is one from which lenders would best steer clear.

Three things might have alerted Moody’s, were it minimally competent. First, the government’s tax receipts did not cover its spending; even at the height of the booming 2000s, borrowing became necessary to make up the difference. Second, the boom itself was clearly the product of cheap credit, which led to asset inflation and overconfident private spending and borrowing. Finally, while taking on legions of new employees is easy for government, nothing is harder politically than to sack them when the money runs out. The means of meeting obligations disappear, but the obligations remain.

In other words, in an economic downturn—of the kind that Brown absurdly claimed to have banished forever—the whole house of cards would collapse. How could a company dedicated to evaluating credit not understand that? 

The Next Golden Age, Part II

The Next Golden Age will bloom once the high cost structures of the U.S. economy implode in insolvency

By Charles Smith

Yesterday, in The Next GoldenAge, Part I, I laid out why the Savior State and its sprawling fiefdoms (both domestic and global) are unsustainable and thus will inevitably devolve/collapse.

Based on the historical accidents of plentiful cheap energy, global dominance via the destruction or marginalization of competitors and favorable demographics, the Savior State and its global Empire arose to reach the present extremes of marginal return: treasure, blood and effort are thrown at "problems" even as the returns sink to negative territory.

Exponential growth of State revenues and debt (public and private) is unsustainable, yet the status quo will immediately implode without borrowing on a vast and rising scale (the Savior State currently borrows 11% of GDP every year, a sum sure to rise).

We can thus look forward to the demise of the entitlement mentality:

The entitlement mentality is a prison of resentment, self-absorption and complicity in the "project" of enlarging the Central State and its Power Elites' share of the resources, output, wealth and income of the nation and the world.

Now I would like to focus on the pragmatic result of marginal return and protected fiefdoms: an intrinsically high cost structure in the U.S. economy.

I have addressed this many times over the past few years:

Lowering the Cost Structure of the U.S. Economy (August 29, 2008)

Is Higher Education Worth a Lifetime of Debt? (August 26, 2009)

What Won't Be Changing (February 2, 2009)

This Week's Theme: The Coming Great Depression (November 24, 2008)

Has Capitalism Failed? (December 19, 2008)

The key dynamics of high cost structure are:

A. Marginal return: as the returns on investment plummet to zero, the status quo attempts to "solve" the "problem" by borrowing and throwing ever-larger sums of money at the "problem." Thousands of pages of legislation add more complex layers of bureaucracy to systems already groaning under a crushing complexity and resulting inefficiency. Returns soon drop to negative. 

B. Cost of borrowing rises: One way to think of this is to recall the physics of corn ethanol: consume a barrel of oil producing the ethanol and get 2/3 of a barrel of equivalent energy as a result. The 1/3 loss is filled by borrowed money, which masks the loss and shunts the burden forward, but with the added cost of interest. Thus marginal return which is cloaked by borrowing merely doubles the burden going forward: not only is good money being put after bad, but the money is borrowed, leaving futere taxpayers/citizens with an ever-rising burden of interest to service. The economy loses not just in the malinvestment but in capital and national income being diverted to pay interest on the money squandered in the misallocation/ malinvestment.

The Next Golden Age, Part I

The Next Golden Age will blossom without the burden of the Savior State and its Elites and fiefdoms

By Charles Smith

I recently received this insightful challenge to address the positive future that potentially lies beyond devolution and collapse:

Good morning sir, I love your writing I read it everyday. You focus so much on the coming collapse and not at all the inevitable rebirth and the beginning of the next 80-year cycle. Would you spend some time speculating about the new golden age beginning in 2021 or so? Your glass half empty pessimism is sometime overwhelming. Thank you,

                                              - Sgt C., U.S. Marines

Thank you, Sgt C., for suggesting the challenge of imagining not just collapse (all too easy) but a positive rebirth from the ashes of the present unsustainable status quo.

In a way, I've already tried to address this with my books, but with the focus on individual, household and community actions. What I will attempt in this occasional series is to describe future large-scale changes: financial, cultural and material.

1. The reduction of complexity and the end of marginal return. The chief characteristic of the U.S. economy and society is marginal return: ever-larger sums of money, energy, human effort, etc. are dumped into a "problem" while the return on that prodigious investment diminishes to less than zero.

The reasons are not complex: one is complexity itself, fed by entrenched fiefdoms protecting their payrolls and perquisites, the pernicious effects of the entitlement mentality and an organizational bureaucratic sclerosis which can be defined as a focus on process over results.

In the post-collapse-of-the-status-quo future, all the wasted motion will be lost. It will no longer be affordable, so it will go away.

Results will matter, process won't--the reverse of today's cultural worldview. Nowadays, by following procedure you CYA--protect yourself from criticism--and also evade responsibility for the outcome.

My favorite illustration of this may be apocryphal. Someone goes to Thomas Edison's laboratory and asks about the enterprise's regulations. "Regulations?" Edison is said to have retorted. "We're trying to get something done here." Precisely.

The ultimate luxury and waste is a CYA focus on procedure to avoid responsibility for poor results (or negative results). That luxury will be gone.

Let me illustrate the reduction in complexity and process with one example we can all relate to: going to the doctor. In the New Golden Age, everyone will pay for healthcare with cash. There may well be some limited forms of catastrophic coverage, but the entire mindset of entitlement ("healthcare is a right," etc.) will be gone.

You choose the doctor, and he/she agrees to offer care for a sum (just like in the "old Golden Era" of the 1950s). You receive the care/treatment, and then pay the doctor in cash or equivalent.

Currently, it is estimated 40% of the $1 trillion we spend on Medicare/Medicaid is squandered on shuffling paperwork/electronic files and fraud. Another 40% does not actually help the patient or is needless (defensive medicine, tests given for profit only, etc.). The opportunities for fraud in the sprawling bureaucracy are endless.

Now compare it to the Next Golden Age. Where is the opportunity for fraud when care is paid for in cash? A "bad check" slipped in lieu of real money? Perhaps, but in general the staggering waste and fraud of the current system vanishes.

How much of this transaction is "overhead," paper-shuffling, filing of insurance claims, arguing over who pays for what, etc.? Very little. If the doctor overcharges (i.e. charges more than other equivalent services) then his/her business will decline.

What about poor people who can't pay for care? In at least some cases, "poverty" is at root mismanagement, carelessness and perhaps a self-destructive worldview. These people will either learn to manage their money better or they will have to wait for whatever care is offered by charity.

Reinhart and Rogoff Were Wrong Even Without the 'Spreadsheet Error'

They forgot that we’re all individual microeconomists, and so long as governments stay out of our way, we’ll be productive

By John Tamny
Though Kenneth Rogoff has written some fairly obtuse op-eds over the years, the book he co-authored with Carmen Reinhart, This Time Is Different, was very much a worthwhile read. If their Keynesian, Phillip’s Curve ideology is ignored, they offered some really interesting statistics.

Most useful to this reader was their soberly introduced point that Greece has been in default half of its modern existence. About government defaults more broadly, they similarly clarified that they’re rarely an all or nothing thing, rather they generally involve slight ‘haircuts’ for creditors. And while they didn’t tie this to modern times, they made the essential point that the U.S. Treasury has defaulted on its debt before; specifically in the 1930s when the dollar’s gold value was reduced to 1/35th of an ounce from 1/20th.

As many are aware, Reinhart and Rogoff made the news for an unfortunate reason last week, all due to a ‘spreadsheet error’ committed in the writing of their much quoted book. They’d found that when debt rose above 90% of GDP some sort of ‘tipping point’ was reached whereby country growth slowed down after the 90% line was crossed. But now it seems their calculations weren’t correct; that heavy country debts of the 90% variety don’t correlate with ‘malaise’ in any statistically significant way.

Quite predictably, reliably delusional Keynesians have taken the above news and concluded that Reinhart and Rogoff’s calculations needlessly caused massive global unemployment. Despite government spending always occurring at the expense of private sector outlays, Keynesians persist in their juvenile view that it’s more economically stimulative for governments to waste money over it being lent out or invested by profit-motivated individuals. Unsurprisingly, they took the news as vindication of their comically sad belief that politicians can spend us to prosperity with money taxed and borrowed from us first.

Human ingenuity and natural resources

Let’s not forget to celebrate the human resources — knowledge, ingenuity, know-how, creativity, entrepreneurship, and imagination

by Mark J. Perry 

On Earth Day “events are held worldwide to increase awareness and appreciation of the Earth’s natural environment.” As we observe Earth Day this year, it might be a good time to appreciate the fact that Americans get most of their plentiful, affordable energy directly from the Earth’s “natural environment” in the form of fossil fuels (coal, natural gas, and petroleum). It’s largely those energy sources that fuel our vehicles and airplanes; heat, cool, and light our homes and businesses; and power our nation’s factories and raise our standard of living. Shouldn’t that be part of “increasing our awareness and appreciation of Earth’s natural environment” — to celebrate Mother Earth’s bountiful natural resources in the form of abundant, low-cost fossil fuels?

The chart above illustrates the importance of the Earth’s hydrocarbon energy treasures to America — in the past, today, and in the future. Over almost a one-hundred year period from 1948 to 2040, fossil fuels have provided, and will continue to provide, the vast majority of our energy by far (based on Department of Energy data here, here and here). Last year, fossil fuels provided almost 84% of America’s energy, which was nearly unchanged from the 85% fossil fuel share twenty years ago in the early 1990s. Even more than a quarter of a century from now in 2040, the Department of Energy forecasts that fossil fuels will still be the dominant energy source, providing more than 80% of our energy needs. So, despite President Obama’s dismissal of oil and fossil fuels as “energy sources of the past,” the Department of Energy’s own forecasts tell a much different story of a hydrocarbon-based energy future where fossil fuels serve as the dominant energy source to power our vehicles, heat and light our homes, and fuel the US economy.

Energy fact of the day

US CO2 emissions per capita in 2012 were the lowest since 1964

By Mark J. Perry 

It’s been widely reported here and elsewhere that CO2 emissions in the US have been falling pretty dramatically over the last five years, thanks in large part to the substitution of natural gas for coal to generate electricity in the US. Natural gas is much more environmentally friendly than coal, which emits about twice as much CO2 as gas when used for electricity generation. Last year, CO2 emissions in the US fell to an 18-year low, the lowest level since 1994, and C02 emissions from coal fell to a 26-year low, the lowest since 1986. Further, as the WSJ reported this week (“Rise in U.S. Gas Production Fuels Unexpected Plunge in Emissions“) the US now leads the world in reducing CO2 emissions thanks to the shale revolution. At the same time that America is using less coal and more shale gas and reducing C02 emissions, Europe and Asia are becoming more coal-dependent for electricity generation, and increasing C02 emissions.

Compared to the last time that CO2 emissions were at 2012′s levels — back in 1994 — real GDP in 2012 was 55% higher and the US population was 17.5% larger, making the drop in greenhouse gas emissions to an 18-year low in 2012 even more impressive. Adjusted for the population, CO2 emissions per capita last year were the lowest since 1964, almost 50 years ago (see chart above, data here and here). According to Department of Energy forecasts, the decline in per capita CO2 emissions is expected to continue so consistently that within about 20 years, greenhouse gas emissions per person in the US will be below the level in 1949!

Health Be Damned

Denmark Hopes Cheaper Soda Will Boost Economy

High value-added taxes and easy border access have long drawn Danish consumers to German grocery stores. Now, the government in Copenhagen hopes that repealing a tax on soft drinks and beer will reduce cross-border shopping and boost the domestic economy.

The Danish government is abandoning a beverage tax that it says is costing the country millions of euros as consumers cross the border to shop in Germany instead.

The tax on soft drinks is to be halved by July and completely abolished by next year, making a 1.5-liter bottle of soda three kroner (€0.40) cheaper in the end. The lesser tax on beer is to be cut by 15 percent by July.

Finance Minister Bjarne Corydon told public broadcaster DR on Monday that the tax's repeal, which has broad support in parliament, would provide a "powerful growth spurt" to the Danish economy.

Cross-border shopping is nothing new to Denmark, as many goods have long been more affordable in Germany and much of the population lives a short trip away from Schleswig-Holstein, Germany's northernmost state. However, the tax on soft drinks and beer, implemented to encourage healthier drinking habits, dramatically increased the traffic.

A report commissioned by the Danish grocers' association DSK last year found that 57 percent of Danish households had crossed the border into Germany to buy beer or soft drinks over the past year -- the highest number ever measured in the regularly conducted study.