Friday, May 17, 2013

America has been dealing with terrorism for longer than we realize

From Anarchists to Islamists

By Charles C. Johnson
Bombings planned in the suburbs. A city paralyzed by fear and violence. A terrorist campaign inspired by anti-American, anti-government radicals from faraway lands. April 2013 in Boston? Try 1919, all over the United States, as foreign-born anarchists made terrorism a routine part of city life and precipitated what historians call the Red Scare. That April, 36 bombs were mailed to recipients who included a number of judges and businessmen, the mayor of Seattle, and the Bureau of Investigation agent responsible for investigating anarchist activities. In June, eight bombs exploded within 90 minutes of one another in New York, Boston, Pittsburgh, Cleveland, Philadelphia, Washington, D.C., and Paterson, New Jersey. A bomb intended for Attorney General A. Mitchell Palmer blew the bomber to bits and destroyed Palmer’s home, though he and his family survived.
Strong circumstantial evidence pointed to the anarchist disciples of Luigi Galleani, who had preached bombing and assassination and sought the violent overthrow of the political order since his arrival in the United States in 1901—the same year that Leon Czolgosz, a 28-year-old madman inspired by Emma Goldman’s incendiary speeches, shot and killed President William McKinley. Like the late American-born jihadi cleric Anwar al-Awlaki, who inspired the Tsarnaev brothers, Galleani praised anarchist killers as martyrs for the revolution. His followers made a kill list of leaders around the world—from Austria, Italy, and Russia to Britain and the United States. Law enforcement seemed powerless to stop the killings and bombings. Despite Galleani’s deportation in 1918, his followers continued to self-radicalize by reading the material printed by his anarchist presses, much as budding Islamists learn bomb-making from the English-language magazine Inspire. Among the anarchists were Nicola Sacco and Bartolomeo Vanzetti, who, despite murdering two men in a shoe-factory robbery in 1920, became a leftist cause célèbre by the time they were executed in 1927.

Who Will Be Master in Europe?

A dangerous question in Europe down the ages
By Theodore Dalrymple
IF you ask someone who is in favour of "the European project" what that project actually is, he will not reply: "The creation of a large and powerful unitary state without any unnecessary interference from populations that, because of their ignorance and stupidity, see no need for it" - a reply that at least would have the merit of honesty.
No: he will start mumbling about peace and the need to avoid a repetition of World War II, as if, were it not for directives from Brussels about how large bananas must be or what are the permitted scents in soap, Europeans would once again be at each other's throats.
Actually, a forced European unity, conjured from no popular sentiment by a strange combination of bureaucratic mediocrity and gaseous utopianism, is more likely to lead to conflict than to prevent it; and the increasingly wide divergence of the interests of France and Germany is fast recalling the ghosts of the past. The French fear to be dominated; the Germans don't want to be condescended to.

Where's all the money gone?

Peeling potatoes, bringing home the bacon
By David Vine 
Outside the United States, the Pentagon controls a collection of military bases unprecedented in history. With US troops gone from Iraq and the withdrawal from Afghanistan underway, it's easy to forget that we probably still have about 1,000 military bases in other peoples' lands. This giant collection of bases receives remarkably little media attention, costs a fortune, and even when cost cutting is the subject du jour, it still seems to get a free ride. 
With so much money pouring into the Pentagon's base world, the question is: Who's benefiting? 
Some of the money clearly pays for things like salaries, health care, and other benefits for around one million military and Defense Department personnel and their families overseas. But after an extensive examination of government spending data and contracts, I estimate that the Pentagon has dispersed around US$385 billion to private companies for work done outside the US since late 2001, mainly in that base world. That's nearly double the entire State Department budget over the same period, and because Pentagon and government accounting practices are so poor, the true total may be significantly higher. 

Erdogan drags heavy bag to Washington

As long as Assad stays in office, Erdogan loses power in Turkish politics and risks losing at elections in 2014
By Egemen B Bezci 
Turkish Prime Minister Recep Tayyip Erdogan will be greeted by Barack Obama at the White House today after waiting more than six months for an appointment since the US president was elected for a second term in November. Weighty issues accompany Erdogan into the meeting between the two heads of state. 
Erdogan's visit to Washington follows frequent visits to Turkey by US Secretary of State John Kerry since took the post in February. Since then, rapid developments in the Middle East have brought new opportunities and threats. The most recent one was last weekend's car bomb attack in the Turkish town of Reyhanli near the Syrian border that claimed the lives of more than 50 Turkish citizens. The incident created more stress on a Turkish government that is already searching for a solution to the already complicated Syria problem. 
In the light of all these developments, three important issues mark Erdogan's agenda during his time in the White House; namely, the Syrian issue, relations with Israel and, significantly, energy politics. It is remarkable to note that for the first time in contemporary Turkish politics, a prime minister will not have to push the Kurdish issue. Erdogan's recent democratic initiative has resulted in a ceasefire with Kurdish militants. 
The ceasefire secured on March 21 between the Kurdistan Workers' Party (PKK) and Ankara is one of the key factors for understanding the puzzle of energy politics in the Middle East. The three-decade-long struggle between the PKK, a Kurdish armed secessionist organization that long-operated across Turkey, Iraq, Iran and Syria as it pursued the establishment of an independent Kurdish state, had claimed more than 30,000 lives and has been a source of instability along the trajectory of Turkey's border with Iraq, Iran and Syria. 
The recent discovery of extensive oil resources near Kirkuk, a city under the administration of the Kurdistan Regional Government (KRG) in northern Iraq, makes it necessary to politically stabilize the region, both for the safe transportation of the fuel to global markets and for the creation of a suitable environment for energy-related investments in the area. Both the KRG and the US would not wish to see the PKK destabilize northern Iraq by using the region as a safe haven to execute attacks on Turkish soil.

Why Big Business Conspires With Big Government

It's the only way they can beat the free market

By Gary North
Reality Check
Over half a century ago, Ludwig von Mises made a crucial observation.
The capitalistic social order, therefore, is an economic democracy in the strictest sense of the word. In the last analysis, all decisions are dependent on the will of the people as consumers. Thus, whenever there is a conflict between the consumers' views and those of the business managers, market pressures assure that the views of the consumers win out eventually.
I have long believed he was correct.
Like Mises' disciple Murray Rothbard, I am a student of conspiracies. They all have this in common: they seek leverage through the state. They instinctively know that Mises was correct, that they are the servants of customers in a free market order. So, they seek to rig the markets by means of the state.
Once a person comes to grips with Mises' observation, conspiracies appear less formidable. The state is a week reed when compared to the long-run effects of liberty. The free market prospers under liberty. It expands its control over production and distribution.
This leads me to the topic at hand.
Alex Jones and Paul Watson wrote a really interesting report on the CEO of Google, Eric Scmidt. He is a big supporter of Obama. They say that he is behind a new organization, Zeitgeist. It is a supplement to the Bilderberg organization. It may be about to absorb Bilderberg.

The revolution will bring the country 50 million rolls of toilet paper

To clean up the results of it's socialist experiment
By TheGuardian
First milk, butter, coffee and cornmeal ran short. Now Venezuela is running out of the most basic of necessities – toilet paper.
Blaming political opponents for the shortfall, as it does for other shortages, the government says it will import 50m rolls to boost supplies.
That was little comfort to consumers struggling to find toilet paper on Wednesday.
"This is the last straw," said Manuel Fagundes, a shopper hunting for tissue in Caracas. "I'm 71 years old and this is the first time I've seen this."
One supermarket visited by the Associated Press in the capital on Wednesday was out of toilet paper. Another had just received a fresh batch, and it quickly filled up with shoppers as the word spread.
"I've been looking for it for two weeks," said Cristina Ramos. "I was told that they had some here and now I'm in line."
Economists say Venezuela's shortages stem from price controls meant to make basic goods available to the poorest parts of society and the government's controls on foreign currency.
"State-controlled prices – prices that are set below market-clearing price – always result in shortages. The shortage problem will only get worse, as it did over the years in the Soviet Union," said Steve Hanke, professor of economics at Johns Hopkins University.
President Nicolás Maduro, who was selected by the dying Hugo Chávez to carry on his "Bolivarian revolution", claims that anti-government forces, including the private sector, are causing the shortages in an effort to destabilise the country.
The government this week announced it also would import 760,000 tonnes of food in addition to the 50m rolls of toilet paper.
Commerce minister Alejandro Fleming blamed the shortage of toilet tissue on "excessive demand" built up as a result of "a media campaign that has been generated to disrupt the country".
"The revolution will bring the country the equivalent of 50 million rolls of toilet paper," he was quoted as saying Tuesday by state news agency AVN. "We are going to saturate the market so that our people calm down."

Global Undemocratic Revolution

Freedom for Sale


By JAMES BOVARD
Freedom for Sale is the best synopsis of the recent collapse of restraints on government power. John Kampfner, the editor of Britain’s New Statesman, traveled the world seeking to answer the question: why have freedoms been so easily traded in return for security or prosperity?
Kampfner begins his tour in Singapore, where he was born. Lee Kuan Yew’s 30-year reign as prime minister begat an authoritarian regime that combined high economic growth with endless petty impingements on personal liberties. Lee’s sense of entitlement to power knew no bounds—he even chose spouses for senior government workers and dictated how many children they should have. With immaculate streets and the world’s highest rate of executions, Singapore earned the nickname “Disneyland with the death penalty.”
While many Americans know that chewing gum is illegal in Singapore, they are unaware that until recently oral sex was punishable by two years in prison. The government has almost totally repressed political opposition. When journalists or others criticize, they are bankrupted by volleys of defamation suits. Kampfner notes, “People confide only in their good friends here; meaningful opinion polls do not exist.” But as long as the economy has boomed, there has been little or no resistance to authoritarianism.
Kampfner spent two stints as a journalist in Russia, one before and one after the fall of the Berlin Wall. He writes, “The West’s overall approach during the 1990s was a mix of condescension, ingratiation, and insensitivity.” Perceived U.S. government meddling in Georgia in late 2003, which helped install Mikheil Saakashvili in power, was a turning point for the Russians, compounded by the U.S. intervention in the Ukrainian election the following year.

Wednesday, May 15, 2013

China's Growth Dilemma

Investment and consumption

By Michael Pettis
I have been arguing for several years that once China begins the adjustment process, which I expect to characterize the ten-year period of the current administration, growth rates must slow significantly. My expectation for long-term growth is that it shouldn’t average much above 3-4% annually. This is what it will take for household consumption to rise to roughly 50% of GDP in a decade if consumption growth can be maintained at its historic rates of around 8%.
But I always warn that this is likely to be an upper limit, not a lower limit, to growth  The key is whether or not it is possible to maintain current levels of consumption growth once investment growth is sharply reduced. A recent paper by the IMF on the topic is very interesting and not encouraging. 
In the paper (“China’s Path to Consumer-Based Growth: Reorienting Investment and Enhancing Efficiency”) Il Houng Lee, Murtaza Syed, and Liu Xueyan team up again to examine the impact of investment in different regions and sectors of the economy. The abstract of the paper is:
This paper proposes a possible framework for identifying excessive investment. Based on this method, it finds evidence that some types of investment are becoming excessive in China, particularly in inland provinces. In these regions, private consumption has on average become more dependent on investment (rather than vice versa) and the impact is relatively short-lived, necessitating ever higher levels of investment to maintain economic activity. By contrast, private consumption has become more self-sustaining in coastal provinces, in large part because investment here tends to benefit household incomes more than corporates.

The truth is dangerous to liars

Lies About Libya

By Thomas Sowell 
There can be honest differences of opinion on many subjects. But there can also be dishonest differences. Last week's testimony under oath about events in Benghazi on September 11, 2012 makes painfully clear that what the Obama administration told the American people about those events were lies out of whole cloth.
What we were told repeatedly last year by the President of the United States, the Secretary of State, and the American ambassador to the U.N., was that there was a protest demonstration in Benghazi against an anti-Islamic video produced by an American, and that this protest demonstration simply escalated out of control.
This "spontaneous protest" story did not originate in Libya but in Washington. Neither the Americans on duty in Libya during the attack on the consulate in Benghazi, nor officials of the Libyan government, said anything about a protest demonstration.
The highest American diplomat on the scene in Libya spoke directly with Secretary of State Hillary Clinton by phone, and told her that it was a terrorist attack. The president of Libya announced that it was a terrorist attack. The C.I.A. told the Obama administration that it was a terrorist attack.
With lies, as with potato chips, it is hard to stop with just one. After the "spontaneous protest" story was discredited, the next claim was that this was the best information available at the time from intelligence sources.
But that claim cannot survive scrutiny, now that the 12 drafts of the Obama administration's talking points about Benghazi have belatedly come to light. As draft after draft of the talking points were made, e-mails from the State Department pressured the intelligence services to omit from these drafts their clear and unequivocal statement from the outset that this was a terrorist attack.

Not a Crook—Yet

The Obama administration seems more Nixonian by the day
By Harry Stein
The comparisons of the Obama and Nixon White Houses are suddenly coming—pardon the expression—fast and furious, and why not? The IRS investigations; the administration’s fixation on leaks and leakers and its obsession with enemies; the cover-ups, the blame-shifting to subordinates, the defiant chief executive, even the sweating, pathetically dissembling press secretary; it all has the odor of that earlier time. Again, it’s all happening early in the second term, following a triumphant reelection. Again, the operative terms are arrogance, contempt for law, and thuggery.
The growing awareness of administration malfeasance is evident in the numbers on Google: more than 59 million hits for “Obama and Nixon” and 24 million–plus for “Obama and Watergate.” For those interested, the 44th president’s face can already be found morphing into the 37th’s. Then there’s the rising tide of commentary. “Obama knee-deep in Nixon-esque scandal” runs the headline of columnist Joe Battenfield’s piece in the Boston Herald, which notes that Obama’s campaign slogan would have been more appropriate if it were not “Forward” but “Backward”—“All the way to, say, 1972.” “Benghazi, IRS—Son of Watergate?” asks Cal Thomas. “In IRS Scandal, Echoes of Watergate,” observes the Washington Post’s George Will.

Syria and the myths of WMD

The West’s conventional firepower, used against regimes with WMD, is far more destructive than any WMD
by Tim Black 
Support for imperialist interventions used to be mustered in terms of nationalism and national interests. But over the past couple of decades, the terms have shifted. Today, Western states are far more likely to solicit support for a foreign venture in terms of our fears, our insecurities, our sense of ever-proliferating threats. What if there are agents of terror waiting in the wings? What if a crazy dictator uses a biological weapon? In short, the politics of nationhood has long since given way to the politics of fear. And nowhere is this more apparent than in that peculiarly contemporary Western obsession with those nightmarish words: weapons of mass destruction.
Indeed, the current political discussion around Syria, especially the arguments for and against intervention, is being conducted almost entirely in terms of one species of WMD, namely chemical weapons. (The other two types of WMD are nuclear and biological.) Initially, we had those in the US and UK who were keen on military intervention seizing upon the various Western intelligence agency reports of Syrian government forces possibly using the chemical weapon, sarin gas. That, so the argument went, was a step too far; a step over US president Barack Obama’s ‘red line’, the point at which Assad’s war against the rebels would become a war crime. The point, that is, at which Western military intervention would be justified.

Tuesday, May 14, 2013

A Brief History Of Cycles And Time

It is about time

By Eric A
Let me ask you something: Do you really think your ancestors didn’t see the Depression coming in 1921 or in 1929? Of course they did. The Balloon Option-ARM mortgage had just been invented, creating a housing boom larger and even more groundless as our own, immortalized by the Marx Brothers in The Cocoanuts. They warned the world then just as we do now, and no one listened then, just as they don’t now. Why? It wasn’t time.
Likewise, do you think Hoover and Roosevelt didn’t do everything they could, whether legal or illegal to stop the endless economic decline after 1929? Of course they did. Roosevelt confiscated the entire money supply, packed the Supreme Court, and took control of the entire US economy to no avail. Henry Morgenthau, Roosevelt’s Treasury Secretary, admitted,
"We have tried spending money. We are spending more than we have ever spent before and it does not work... We have never made good on our promises. I say after eight years of this Administration we have just as much unemployment as when we started. And an enormous debt to boot."

Getting Run Over by Brussels

A Lobbyist’s Wonderland


by Don Quijones
Once upon a time I was a committed convert to the European project. Even long before leaving British shores for the continent, I strongly believed in the European dream, in the idea that Europe could overcome its almost prehistoric divisions by embracing a new era of unity.
But in the last five years my position has shifted somewhat. As I have learned more and more about the bleak reality of European integration, I have come to realise that British fears about the EU’s threat to national sovereignty and the institution of democracy itself — fears that my former adolescent self had dismissed as both childish and irrational — were wholly justified. 
Here are a few salient points of interest regarding Europe’s ongoing experiment in political and economic centralisation, which is radically changing the lives of almost half a billion Europeans:
1. According to some estimates, as much as 80 percent of all laws passed by national European governments are mere rubber stamped edicts emanating from Brussels.And the scale of EU interference in national governance continues to grow by the day. Just last week, the Commission passed a raft of new regulations to control what varieties of seeds the continent’s agriculturists can and can’t trade, dealing a heavy blow to small farmers across the continent while further strengthening the power of seed industry corporations.

Russia's Plan For The BRICS To Dismantle The Dollar System

The BRICS are coming (hoping) to change the world
By Valentin Mândrăşescu
The status of the US dollar as the world reserve currency gives the US a number of advantages over other countries. The world’s most important commodities are priced and traded in dollars, even if most of these commodities are not produced in the US. The fact that the world’s financial system is based on the dollar allows the Federal Reserve to export inflation to other countries, while the Federal Government runs a huge deficit with impunity.
So far, only China has been active in challenging the dollar supremacy. The internationalization of the yuan is an official priority of Chinese leaders. Currency swap agreements with major trade partners like Brazil, France, or Australia are small but important steps in the Chinese strategy. Changing the world financial system is not an easy task and certainly a very challenging undertaking for China. Now, it seems that Beijing has found an ally in the Kremlin. And there appears to be a consensus between the BRICS countries: the urgent necessity to dismantle the dollar system.
A week before the recent BRICS summit in Durban, the Kremlin administration has silently produced a document which describes the Russian strategy in the context of BRICS cooperation. The document makes for a fascinating read for anyone brave enough to plow through the dense Russian legalese. The strategy has been designed in the “inner circle” of Vladimir Putin’s team, so it is safe to assume that it represents the official view on the BRICS future.

Welfare Costs Rapidly Escalating – Everywhere

As We Go Marching

By Alasdair Macleod
Many of us are aware of Professor Laurence Kotlikoff of Boston University’s calculation that the net present value of the US Government’s future liabilities rose by $11 trillion in fiscal 2012 to $222 trillion. These are principally welfare, healthcare and social security costs.
This is admittedly a high-end estimate, dependent on variables such as longevity, demographics and the interest rate at which future liabilities are discounted. It is an escalating problem, because baby-boomer retirees suddenly stop paying income and social security taxes and instead draw down on the system. The implication is that these costs are impacting government finances at an increasing rate, potentially undermining the creditworthiness of the US Government.
According to OECD figures other countries appear to be in far worse positions, as shown in the table below, where they are ranked by cash pension costs faced by governments in 2011.

The Prophet of Europe’s Crisis

Wilhelm Röpke was a “euroskeptic” long before the term was coined
By SAMUEL GREGG
As Europe’s economic debacle gathers apace, there’s no shortage of commentators saying “I told you so.” The impact of factors such as out-of-control welfare states, excessive debt, widespread bureaucratization, a flawed monetary experiment, low-productivity, and labor market rigidities seems obvious to us today.
The truth, however, is that few observers — European or American — forecast that the European unification project would eventually produce a fiasco on this scale. Indeed, most early opponents of European political and economic integration were old-fashioned lefties who feared it might impede implementation of socialist policies!
A rare exception to this rule was the German economist Wilhelm Röpke. Today, he’s mainly known as a primary intellectual architect of the postwar German economic miracle as well as one of postwar Keynesianism’s most ferocious critics. However, not many know that Röpke was also one of the very few free market economists who loudly and publicly criticized what would eventually become today’s European Union even before the Treaty of Rome was signed in 1957. Röpke was in short a “euroskeptic” long before the term was coined.

The End of the Castros?

Raul Castro’s latest gestures cannot be taken at face value

By ALBERTO DE LA CRUZ
On the Friday of the last weekend in February, Cuban dictator Raul Castro caught the news agencies covering his island nation by surprise when he dropped a hint that he was thinking of retiring. Later that Sunday, at a meeting of Cuba’s communist National Assembly, Castro went much further and announced that he would step aside at the end of the five-year presidential term to which he had just been “elected.” Adding fuel to the fire was the announcement that Miguel Diaz-Canel, a relatively unknown 52-year-old communist party apparatchik, had been appointed Castro’s second in command—and would thus theoretically be next in line to take command after the aging dictator’s exit.
Naturally, journalists, analysts, and so-called Cuba experts immediately began to explore the possibilities and ramifications. Many of them proposed the Western Hemisphere’s bloodiest and longest-running dictatorship was now possibly just five years away from its end. Furthermore, Castro’s choice of a younger, more modern successor born after his brother’s revolution just had to be a sign that the island’s communist government was slowly but surely preparing to embrace a more democratic political system.
What many of these writers failed to do, however, was examine the latest political moves of the Cuban dictatorship through the prism of the regime’s history. Never in the past 53 years has anyone outside the Castro family possessed any real power in Cuba. Not only have the Castro brothers kept non-family members from positions of influence, they have summarily eliminated anyone who has posed or could possibly pose a threat to their authority. Therefore, it would be prudent to take Raul Castro’s retirement announcement and the appointment of Diaz-Canel with a proverbial grain of salt.

Hollande’s France: About to Become the New Mexico?

How fast can a country go down the drain ?
By David Drew
One of the constants of modern European history is that compared to the Germans, the Italians and the Brits, the French have stayed put. Since the French Revolution, the French have mostly stayed home. Emigration has just not been the French way.
That may be changing. London is already full of talented young French people looking for a country that still believes in the future, and there may be lots more emigration ahead. A twenty year old named Clara G, a second year history student at the Sorbonne, recently published an open letter to President François Hollande in the French paper Le Point. In it, she quotes a poll that found that 50 percent of 18-24 year olds and 51 percent of 25-34 year olds would, if they could, like to leave France for another country. Clara explains why she and so many her age want out:
I don’t want to work all my life in order to pay taxes that will, for the most part, only go to service the 1,900 billion euros of debt that your generation was kind enough to leave as your legacy. If these loans had at least been invested in a plan for the future of the country, if I thought I would profit a little from them, I wouldn’t have any problems repaying them. But they only allowed your generation to live above its means, to secure a generous welfare that I won’t be able to enjoy. In order to make your lives, I would say “cushy”, but I’m afraid that the word offends you.

Berlin Wary of ECB Plan to Help Southern Europe

'Violation of Treaties'

The European Central Bank would like to encourage banks in Southern Europe to issue more loans. But Berlin is concerned that a planned move to trigger such lending could violate EU treaties. German Finance Minister Wolfgang Schäuble has hit the brakes
By Spiegel
German Finance Minister Wolfgang Schäuble and European Central Bank head Mario Draghi have never seemed particularly eager to avoid conflict with one another. Just in January, the two got into a mini war-of-words over the need to bail out Cyprus, with Schäuble openly questioning whether the country was systemically relevant.
Now, the two are at odds again. 
Schäuble is deeply critical of an ECB idea to purchase asset-backed securities, fearing that the plan could be little more than "obscured state financing," a no-no for the ECB. Schäuble made his remarks at a breakfast of conservative lawmakers last Wednesday, according to sources present. Schäuble said that such a plan would violate European Union treaties.
The motivation for considering such a move is clear. The ECB is eager to stimulate bank lending, particularly in Southern European countries where the debt crisis has made banks wary of issuing loans. But Schäuble is concerned that an ECB program of buying asset-backed securities could amount to the bank taking over some €70 billion in debt owed by Italy to private creditors.
Schäuble was backed on Monday by Hans Michelbach, the top conservative in the Finance Committee in parliament. "After the extremely questionable ECB purchase of sovereign bonds, this would be a clear violation of European treaties," Michelbach said, according to German news agency DPA. There are, he said, apparently some people in the ECB leadership "who consider the ECB to be the Bad Bank of Southern Europe."

The Untouchables of the 21st Century

Companies won't even look at resumes of the long-term unemployed


Dalit or Untouchable Woman of Bombay according
 to Indian Caste System - 1942
by Raul Ilargi
Throughout history and throughout the world, there have been classes of untouchables. Best known perhaps (other than Elliott Ness and Wall Street bankers) are the caste that goes by the name in South Asia, a.k.a. the Dalits, but there are/were also for instance the Cagots in France, the Burakumin in Japan, and the Roma and Jewish populations in medieval Europe though the Middle East. In the US, one could include the black and native populations. Wikipedia has this definition:
Untouchability is the social-religious practice of ostracizing a minority group by segregating them from the mainstream by social custom or legal mandate. The excluded group could be one that did not accept the norms of the excluding group and historically included foreigners, house workers, nomadic tribes, law-breakers and criminals and those suffering from a contagious disease. This exclusion was a method of punishing law-breakers and also protected traditional societies against contagion from strangers and the infected.
The origin of the phenomenon may have started simply as a way to exclude criminals and diseased people from a community, but obviously that's not where it led.