We might as well put the Constitution out of its misery

The Simulacrum of Self-Government 

By Mark Steyn

Wednesday, June 26, 2013 — just another day in a constitutional republic of limited government by citizen representatives:

First thing in the morning, Gregory Roseman, Deputy Director of Acquisitions (whatever that means), became the second IRS official to take the Fifth Amendment, after he was questioned about awarding the largest contract in IRS history, totaling some half a billion dollars, to his close friend Braulio Castillo, who qualified under a federal “set aside” program favoring disadvantaged groups — in this case, disabled veterans. For the purposes of federal contracting, Mr. Castillo is a “disabled veteran” because he twisted his ankle during a football game at the U.S. Military Academy prep school 27 years ago. How he overcame this crippling disability to win a half-billion-dollar IRS contract is the heartwarming stuff of an inspiring Lifetime TV movie.

Later in the day, Senator John Hoeven, Republican of North Dakota and alleged author of the Corker-Hoeven amendment to the immigration bill, went on Hugh Hewitt’s radio show and, in a remarkable interview, revealed to the world that he had absolutely no idea what was in the legislation he “wrote.” Rachel Jeantel, the endearingly disastrous star witness at the George Zimmerman trial, excused her inability to comprehend the letter she’d supposedly written to Trayvon Martin’s parents on the grounds that “I don’t read cursive.” Senator Hoeven doesn’t read legislative. For example, Section 5(b)(1):

Not later than 180 days after the date of the enactment of this Act, the Secretary shall establish a strategy, to be known as the ‘Southern Border Fencing Strategy’ . . .

On the other hand, Section 5(b)(5):

Notwithstanding paragraph (1), nothing in this subsection shall require the Secretary to install fencing . . .

Asked to reconcile these two paragraphs, Senator Hoeven explained that, “when I read through that with my lawyer,” the guy said relax, don’t worry about it. (I paraphrase, but barely.) So Senator Hoeven and 67 other senators went ahead the following day and approved the usual bazillion-page we-have-to-pass-it-to-find-out-what’s-in-it omnibus bill, cooked up in the backrooms, released late on a Friday afternoon and passed in nothing flat after Harry Reid decreed there’s no need for further debate — not that anything recognizable to any genuine legislature as “debate” ever occurs in “the world’s greatest deliberative body.”

Say what you like about George III, but the Tea Act was about tea. The so-called comprehensive immigration reform is so comprehensive it includes special deals for Nevada casinos and the recategorization of the Alaskan fish-processing industry as a “cultural exchange” program, because the more leaping salmon we have the harder it is for Mexicans to get across the Bering Strait. While we’re bringing millions of Undocumented-Americans “out of the shadows,” why don’t we try bringing Washington’s decadent and diseased law-making out of the shadows?

Time Is Running Short

Europe is imploding fast

by Mark J. Grant

"It is only in silence that one hears the sounds of life."

                                                                                   -The Wizard

From time to time it is necessary to quietly sit down and assess where we are going. This is a significantly different undertaking than listening to those who try to tell us where we are going. Government and the Pastors of Propaganda are always whispering into our ears either offering Heaven or the retribution of Divine Providence so the removal of either from a deliberate consideration is a necessary part of the examination of reality.  

I bring a measure of experience to this task. Things that are not counted, liabilities that are excluded from national budgets or their debts, do not mean that they do not have to be paid. This, in fact, is Europe's greatest problem. They have played "extend and pretend." They have played "lie and deny." They have resorted to every trick imaginable when compiling data such as the debt to GDP ratios of the countries and yet; chicanery does not erase the debts.

The financial projections of the IMF, the EU and the ECB are never accurate or even close to accurate because they use garbage for their data. It is therefore "garbage in" and "garbage out" as they all make a mockery of themselves. The vast amount of investors continue to believe them as evidenced by the markets but certain events are now about to take place.

Greece reported out a -14.2% decline in just one month this morning for retail sales. Greek collapse III is almost at hand as their two major privatizations have failed and as their economy continues to worsen. Soon the Greeks will call for more money but the end of this road is in sight as I do not believe the nations in Europe are willing to roll over again. The IMF is also up against the wall and they have asked, I understand, for Europe to forgive part of the Greek debt which has fallen, so far, on deaf ears.

Soon, soon, the Iceman cometh.

The Cyprus solution is a failure. It is as clear and as simple as that. Cyprus will have $10.17 left in their banks by the end of the year. They will soon be back asking for more money and we will have another IMF problem and a Euro fiasco as the amount of money they have been given to date is akin to a flyswatter trying to smack down an F-14. A ridiculous incident in both cases.

The biggest problem though is going to be France. They have a stated debt to GDP ratio of 90.2%. This is another mockery of the data though as the real number, liabilities included, is somewhere around double this number or just below 200%. They also have an economy that, according to "Trading Economics," is expected to decline in the next quarter by -0.5% while their sovereign debt increases to $366.9 billion which is an increase of 9.5%. This is while their government spending rises 9.9% for the same time period. This, then not only puts them in violation of the EU's current mandates, which is a secondary consideration, but puts them clearly on the road to insolvency.

Why Centralization Leads to Collapse

A system that suppresses dissent is fault-intolerant, ignorant and fragile

by Charles Hugh-Smith

Increasing centralization has been viewed as the solution for all social and economic problems for quite some time. The Eurozone project is one recent manifestation of this belief.

The basis of this belief is rationality and efficiency. If we centralize production and decision-making, we eliminate all sorts of inefficiencies. Decisions can be made by "top people," and supply chains can be rationalized from a hopelessly inefficient clutter down to a supremely rational and cost-effective pathway.

Ironically, in eliminating inefficiency and messy decision-making, centralization eliminates redundancy, decentralized pathways of response and dissent. Once you lose redundancy and all the feedback it represents, you lose resiliency and fault-tolerance. The centralized system is fault-intolerant and fragile.

By rationalizing decision-making and authority in a centralized hierarchy, the system slowly but surely eliminates dissent: those who "don't get on board" and "get with the program" imposed from the top are marginalized, pushed out or liquidated.

From the point of view of the "top people," this is merely rational; why tolerate a lot of chatter and resistance that doesn't serve any real purpose except to bog down the duly chosen program?

As Nassim Taleb has observed, dissent is information. Eliminate or marginalize dissent and you've deprived the system of critical information. Lacking a wealth of information, the system becomes a monoculture in which the leadership is free to pursue confirmation bias, focusing on whatever feedback confirms its policy mandates.

A system that suppresses dissent is fault-intolerant, ignorant and fragile. Any event that does not respond to centralized, rationalized policy creates unintended consequences that throws the centralized mechanism into disarray. Lacking dissent and redundancy, the system piles on one haphazard, politically expedient "fix" after another, further destabilizing the system.

The event that triggers crisis and collapse isn't important; the system, rendered unstable and fragile by centralization, is primed for crisis and collapse. The dry underbrush is piled high, and if the first lightning strike doesn't start the fire, the second one will. With dissent and the inefficiencies of redundancy and decentralized pathways of response gone, there is nothing left to stop a conflagration that consumes the entire forest. 

In From the Cold

Conservatives  should not wage a Hundred Years War

By GEORGE W. CAREY

Despite the bellicose rhetoric that emanates from much of the Right, opposition to the interventionist policies initiated by George W. Bush is hardly confined to libertarians and the political Left. It includes traditional conservatives—those conservatives who take their bearings from Burke and Tocqueville, who regard society as both fragile and complex, so complex that no one individual or group can ever presume to comprehend its intricacies.

Traditional conservatives are convinced that global interventions, aside from the attendant loss of life and enormous expense, hold little hope for success since the ingredients for a stable democratic order are seriously lacking in the nations we seek to reform. Key variables include vibrant and healthy intermediate social institutions and associations to serve as effective buffers against an omnipotent government; a decentralized political order in which the principle of subsidiarity is honored; deeply held convictions, religious or customary, that provide meaningful distinctions between state and society, thereby establishing limits to the range of governmental authority; and a recognition of rights with corresponding responsibilities.

While elements of traditional conservatism find expression in classical thought—Aristotle comes immediately to mind—in the American context they are found particularly in the New Humanism of Irving Babbitt and Paul Elmer More and, after World War II, in the major writings of Russell Kirk, Richard Weaver, and Robert Nisbet. Today, the principles of traditional conservatism inform the works of Peter Stanlis, Bruce Frohnen, and Claes Ryn, to name but a few. And until a relatively recent date, those who embrace traditionalist principles and values found a friendly home within the Republican Party.

The steadfast opposition of traditionalist conservatives to the War on Terror initiated by a Republican president stands in sharp contrast to the stance they assumed during the Cold War, when they justifiably earned an image as hardliners implacably committed to the elimination of the Soviet Union and willing to take bold measures to ensure this end. How can these seemingly inconsistent positions be reconciled?

The Lunatic Mainstream

The lunatic mainstream is determined on a course of profound, existential change for Great Brittain (and Europe), with no popular mandate whatsoever 

By mark steyn

It's all but impossible to launch a new political party under America's electoral arrangements, and extremely easy to do so under Continental proportional representation. The Westminster first-past-the-post system puts the task somewhere in between: tough, but not entirely the realm of fantasy. The Labour party came into being at the dawn of the 20th century, and formed its first government in 1924. The United Kingdom Independence party was born in 1993 and now, a mere two decades later, is on the brink of . . . well, okay, not forming its first government, but it did do eerily well in May's local elections. The Liberals were reduced to their all-time lowest share of the vote, the Tories to their lowest since 1982, and for the first time ever, none of the three "mainstream" parties cracked 30 percent: Labour had a good night with 29, the Conservatives came second at 25, and nipping at their heels was the United Kingdom Independence party with 23 percent.

They achieved this impressive result against not three opponents but also a fourth — a media that have almost universally derided the party as a sinkhole of nutters and cranks. UKIP's leader, the boundlessly affable Nigel Farage, went to P. G. Wodehouse's old high school, Dulwich College, and to a sneering metropolitan press, Farage's party is a déclassé Wodehousean touring company mired in an elysian England that never was, populated only by golf-club duffers, halfwit toffs, rustic simpletons, and hail-fellow-well-met bores from the snug of the village pub. When I shared a platform with him in Toronto a few months back, Mr. Farage explained his party's rise by citing not Wodehouse but another Dulwich old boy, the late British comic Bob Monkhouse: "They all laughed when I said I'd become a comedian. Well, they're not laughing now."

The British media spent 20 years laughing at UKIP. But they're not laughing now — not when one in four electors takes them seriously enough to vote for them. So, having dismissed him as a joke, Fleet Street now warns that Farage uses his famous sense of humor as a sly cover for his dark totalitarian agenda — the same well-trod path to power used by other famous quipsters and gag-merchants such as Adolf Hitler, whose Nuremberg open-mike nights were legendary. "Nigel Farage is easy to laugh at . . . that means he's dangerous," declared the Independent. The Mirror warned of an "unfulfilled capacity for evil." "Stop laughing," ordered Jemma Wayne in the British edition of the Huffington Post. "Farage would lead us back to the dark ages." The more the "mainstream" shriek about how mad, bad, and dangerous UKIP is, the more they sound like the ones who've come unhinged.

The Nightmare of Romantic Idealism

Creature and Creator: Myth-Making and English Romanticism

By Paul Cantor

Frankenstein has as much claim to mythic status as any story ever invented by a single author. The original novel continues to be read by a wide audience, and has of course spawned innumerable adaptations, imitations, and sequels.¹ Through its cinematic incarnations, the Frankenstein story has ingrained itself on the popular imagination. Although no one believes in the literal truth of the story, it has all the other earmarks of a genuine myth, above all, the fact that men keep returning to it to find ways of imagining their deepest fears. But as original as the Frankenstein myth is, Mary Shelley did not create her story out of thin air. Much of the power of her book can be traced to the ways she found of drawing upon traditional mythic patterns. A glance at the title-page shows that in composing the book she had two of the central creation myths in the Western tradition in mind. The subtitle of Frankenstein, "The Modern Prometheus," points to the myth of the Greek Titan. The epigraph from Paradise Lost suggests that the story refers to Milton's creation account, and by extension to Genesis. But if one tries to align the characters in Frankenstein with traditional mythic archetypes, one runs into difficulties. Although Frankenstein at first seems to offer a potentially confusing array of mythic correspondences, by trying to sort out the mythic roles assigned to the central characters, we can approach the thematic heart of the book.

We can begin by asking: who is the modern Prometheus referred to in the subtitle? The obvious answer is Victor Frankenstein, and many critics have pointed to the Promethean elements in Frankenstein's character.² Victor wants to be the benefactor of mankind, rebels against the divinely established order, steals, as it were, the spark of life from heaven, and creates a living being. But like Prometheus he ends up bringing disaster and destruction down upon those he was trying to help. In many respects, however, the monster Frankenstein creates is an equally good candidate for the {104} role of Prometheus in the story. It is the monster who literally discovers fire, and in a sense steals it (99-100). Moreover, the monster tantalizes Frankenstein with a mysterious secret concerning what will happen on his wedding night. Frankenstein's blindness to the real meaning of the monster's prophecy (182) associates him with the role of Zeus, particularly if one looks ahead to Percy Shelley's version of the Prometheus myth, in which the story of the secret concerning Jupiter's wedding hour is central to the plot. The fact that both Frankenstein and the monster have their Promethean aspects should not be surprising, since the original Prometheus archetype is ambiguous. With respect to man, he appears as a creator and thus as a divine figure; with respect to Zeus, he takes on the role of a rebel against divine authority and eventually of a tortured creature, thus becoming a symbol of human suffering at the hands of the gods.

The same sort of ambiguity of mythic archetypes is evident when one considers the Miltonic analogues to the Frankenstein story.³ As the creator of a man, Frankenstein plays the role of God. But Frankenstein also compares himself to Satan: "All my speculations and hopes are as nothing, and like the archangel who aspired to omnipotence, I am chained in an eternal hell" (200). The narrator Walton describes Frankenstein in terms that clearly recall the fallen Lucifer of Paradise Lost: "What a glorious creature must he have been in the days of his prosperity, when he is thus noble and godlike in ruin! He seems to feel his own worth and the greatness of his fall" (200).

The monster similarly compares himself to two Miltonic roles. He is both Adam and Satan, as he tells his creator: "Remember that I am thy creature; I ought to be thy Adam, but I am rather the fallen angel, whom thou drivest from joy for no misdeed" (95). Later, while reflecting on his reading of Paradise Lost, the monster develops this idea:

I often referred the several situations, as their similarity struck me, to my own. Like Adam, I was apparently united by no link to any other being in existence; but his state was far different from mine in every other respect. He had come forth from the hands of God a perfect creature, happy and prosperous, guarded by the especial care of his Creator; . . . but I was wretched, helpless, and alone. Many times I considered Satan as the fitter emblem of my condition, for often, like him, when I viewed the bliss of my protectors, the bitter gall of envy rose within me. (114)

Last Tango in Argentina?

Vanishing Dollars

by Pater Tenebrarum

Last time we wrote about Argentina, we discussed the fact that the government had begun to try to entice 'undeclared' dollars that citizens had stashed in foreign bank accounts as well as under their mattresses back into the country and into the coffers of its inflation-prone central bank. Of course only financially suicidal morons could possibly fall for this offer, which we'll repeat here as reminder: 

“Argentines will need to deposit these undeclared dollars at the Central Bank, which will issue CDs for the entire amounts, Central Bank President Mercedes Marco del Pont said.The bonds will pay 4 percent interest through 2017.”

You will notice that it doesn't say 'at the end of the period, citizens will get their dollars back'. That's probably because they won't. However, if they get back pesos, then they could just as well buy Argentine government bonds, which nowadays pay interest in the mid double digits. That by the way is not indicative of their good quality. Rather it is a hint that the government might default again if it isn't careful.

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Argentina's 25 year bond yield has risen to almost 16% recently – click to enlarge.

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Of course there has been a sell-off in emerging market debt more generally, and Argentina has been swept up in that wave of selling as well. However, while other EM bonds have slightly recovered, those of Argentina continue to be under pressure.

It turns out that the government's dollar reserves are beginning to dwindle in accelerated fashion and are close to running worryingly low. This is in a way surprising, as Argentina is exporting a great many raw materials and is getting paid in dollars for them. It has however further come to light that what actually happened is that the government's coercive measures that were meant to keep more dollars in the country had the exact opposite effect. As is usually the case, government intervention brings about unintended consequences, which often take the shape of the precise opposite of what was intended. In addition, Argentina has the dubious distinction of having seen its yield spreads over treasuries increase the most after those of hyper-inflationary Venezuela. According to Bloomberg: 

“Argentina’s supply of dollars it needs to pay bondholders is dwindling at the fastest pace since the depths of the nation’s economic crisis 11 years ago.

Foreign reserves have plunged 12.2 percent this year to $38 billion, the biggest decrease since 2002. The holdings are now at a six-year low and will equal just 25 percent of Argentina’s $142 billion of foreign debt by the end of 2013, according to Credit Suisse Group AG. The financial strain is adding to the nation’s borrowing costs as the extra interest investors demand to hold Argentina bonds over Treasuries rose 2.3 percentage points this year, the most in emerging markets after Venezuela, to 12.21 percentage points, according to JPMorgan Chase & Co.

Argentina posted the worst deficit in its current account, the broadest measure of trade in goods and services, since its $95 billion default in 2001 in the first quarter as energy imports jumped and Argentines spent more abroad to skirt President Cristina Fernandez de Kirchner’s currency restrictions. After using $5.7 billion of reserves to pay debt last year, the central bank will need to spend $4.7 billion more through year-end to meet obligations, Credit Suisse said.”  (emphasis added)

Our man in Quito

Danger still looms

By Pepe Escobar 

So it's going to be Our Man in Quito. The narrative may not be as elegant as Graham Greene's, but the plot certainly beats the Bourne trilogy - because it's happening live, in real time, right in front of our eyes. 

It takes a former CIA asset to beat US "intelligence" - more like intel deprivation. The story of Edward Snowden's escape from Hong Kong is textbook. This correspondent, at dim sum on Sunday, was alerted by a source; "Get ready for something big; he's leaving soon." That was about 12:30 pm Hong Kong time. In fact Snowden had already flown from Chek Lap Kok on SU 213 bound for Moscow at 11:00 am. But nobody knew it yet. Hong Kong was still digesting the front page of the South China Morning Post displaying yet more devastating evidence of US cyber-spying of China. 

By 2:00 pm there was a first, one-line alert from the South China Morning Post; he was on a plane to Moscow. I talked to RT in Moscow; they were stunned and sprang into action. Still total silence from Western corporate media. Then the Post confirmed the breaking news with more detail. Yet it took ages for Reuters to release its first short dispatch - as I had commented on my Facebook page. When the "international community" started to learn about it Snowden was already five hours into his flight. 

Asia Times Online had also learned from another source close to Snowden's tight circle that a short stint in Hong Kong was always part of Plan A; he never intended to ask for political asylum in either Hong Kong or China. He was already focused on a "third country". What he did was to use Hong Kong as an ideal platform to unveil the inner workings of the Orwellian/Panopticon US surveillance state. 

First a set of general revelations to The Guardian. Then he went underground to prepare his escape - as he knew Washington would come after him with all guns (drones?) blazing. And then, a final set of revelations to the South China Morning Post closely focused on Asia and China. When Washington woke up to it, he was already out of the building. Jason Bourne, eat your heart out. 

Snowden was not "allowed to slip away". It all revolved around a meticulously timed operation involving Snowden, the Hong Kong government and WikiLeaks mediation. 

Rudd v Gillard: the face of things to come

Across the West politics is becoming more oligarchical and bitchy

by Frank Furedi 

The ease with which Labor’s Kevin Rudd deposed party leader and Australia’s prime minister, Julia Gillard, threatens to give the term stab-in-the-back a bad name.

There was something brutally casual about the promiscuous manner in which the Australian Labor Party toppled its own leader. Three years ago, of course, it was Rudd’s turn to face the chop, as Gillard, who was then his young protégé, seized the reins of power. Then, commentators criticised Gillard’s shabby treatment of a rather inept Rudd. It was suggested that her callous behaviour would ruin her party’s chances at the polls. This time, the palace coup has been blamed on the sexism of Australia’s political life, and Rudd has suddenly been transformed into a closet misogynist who has finally decided to come out.

Neither the overthrow of Gillard today, nor the humiliating exit of Rudd in 2010, has any real connection to differences of views and opinions. The Labor Party is a political principle-free zone and is entirely devoted to winning elections. Like many political parties in the Western world, it is little more than a political machine that serves the interests of its individual leaders. The latest bout between Gillard and Rudd is an example of the type of politics that prevails in such parties: ‘It’s all about me.’

Back in 2010, when news of Gillard’s coup broke, I was travelling in Australia and interviewing people about their attitudes towards political issues. At the time, almost everyone I talked to regarded the conflict between Rudd and Gillard as an example of infighting among professional politicians. Virtually no one even attempted to suggest there might be some important cause or issue at stake. Only one person made even a half-hearted attempt to talk about Labor’s ‘core values’. His response to my question about what these values were was evasive and incoherent. Apart from a few hardened party activists, no one expressed any strong interest in the identity of the Labor Party’s leader. It is likely that the public’s reaction to the displacement of Gillard by Rudd is no less indifferent to the displacement of Rudd by Gillard.

Erdogan’s Majority Rule

It is unwise to rely on the everlasting meekness of mobs

by Theodore Dalrymple   

Recent events in Turkey ought remind us, if we needed reminding, that freedom and parliamentary democracy are not identical, though many people mistake the one for the other. But if by parliamentary democracy we mean merely government legitimated by a majority of the votes every few years, there is no reason why such democracy should not lead to tyranny. Indeed, a democratic tyranny may be among the most insidious, if not necessarily the worst, of tyrannies, for it possesses the simulacrum of a justification for its oppression, namely the will of the majority.

No one can doubt the democratic legitimacy of Mr Erdogan, the Turkish Prime Minister. He has won three genuine elections with many more votes than any other candidate (in this respect, his legitimacy is actually far greater than that of most western leaders). And it is probable that if there were elections tomorrow he would win them without difficulty. Moreover, the reasons for this are not difficult to find. Turkey under his government has thrived; and even his worst enemies could not but admit that the country is far better administered under his rule than it was before he came to power. No doubt some of Turkey’s prosperity is attributable to its good fortune in not being permitted to join the European Union; but there is more to success than the avoidance of catastrophic mistakes. Failing to chain yourself to a corpse does not make you an athlete.

Mr Erdogan has also tamed the army, which has more than once intervened to overthrow a democratically-elected government. Ordinarily, this would seem a step in the right direction; but the army was the ultimate guarantor of Kemalist secularism and it may well prove its emasculation was equivocal from the point of view of individual freedom.

Why Free Will Matters

The idea that without free will there can be no morality is one of those obvious facts that bears repeating

by Tibor R. Machan

Let me once again quote George Orwell, who reportedly noted that “Sometimes the first duty of intelligent men is the restatement of the obvious.”

The idea that without free will there can be no morality is one of those obvious facts that bears repeating. It was Kant who famously insisted on this but others have signed on as well. For instance, it is arguable a point made by Aristotle, too.) In an age that is highly respectful of the opinions of scientists, even opinions that do not arise from their work as scientists, seem to contradict this but even scientists have affirmed the point!

For a simple view of what nearly all scientists believe is that everything that happens in the world has to happen exactly as it does happen. In short, scientist are supposedly committed to determinism which is, at least in its usual meaning, incompatible with free will.

Free will involves being the originator of one’s actions or conduct. Unlike physical objects, plants and most animals, human beings are supposed to have free will in that they normally initiate what they do. Their conduct is not fully explainable by reference to impersonal factors such as their genetic make-up, their history or race or gender, etc., etc. They are, instead, agents of much of what they do, of their behavior.

Now this idea seems incompatible with how scientists view the world, although in fact scientists aren’t supposed to be prejudiced in favor of determinism or free will, for that matter. Whether human beings have free will is something to be discovered, not assumed.

Scandinavian Sorrows

Stigende renter? Hvad er det? Hjælp!

by Pater Tenebrarum

If we're not completely mistaken, then the above is Danish for: “Rising interest rates? What's that? Help!”  The recent bond market swoon has been a global phenomenon, and it has afforded highly indebted consumers in Scandinavian countries a brief glimpse of what could be a melancholic future in a place called  'debt slave hell'.

Bloomberg informs us of a beginning 'rate pain' attack in Denmark:

“Danish consumers, who owe banks more than three times their disposable incomes, are about to find out how sustainable that debt load is as interest rates rise.

Signals from the U.S. Federal Reserve that it’s preparing to scale back monetary stimulus have already sent mortgage costs higher as yields rise across global bond markets. The Nykredit Index of Denmark’s most traded mortgage bonds sank this week to its lowest in more than four months after investors sold assets once coveted for their haven status.

Though the government and central bank have long argued Denmark’s private debt burden is backed by some of the world’s biggest pension savings, record consumer borrowing has prompted warnings from the European Commission and the International Monetary Fund. The Systemic Risk Board in Copenhagen said this week it will investigate private debt growth in response to international concerns.

“We have decided to initiate an analysis to see if there is a risk to the systemic stability,” central bank Governor Lars Rohde, who heads the board, said in an interview. Though recent studies suggest a “significant level of robustness,” the board has “noted that others outside the country have a different understanding.” (emphasis added)

Let's see: Denmark's consumers have debt amounting to more than 300% of their income (that sounds like a world record…even Carneyfied Canada is positively thrifty by comparison). Some people say that this debt load just mightbecome a problem (not only for said consumers, but also for their creditors). The solution: we'll let a committee look into it. In that case, obviously nothing can possibly go wrong. Dodged a bullet there!

In Denmark it's Different …

Let us take a look at what arguments are forwarded in terms of 'it's different in Denmark'- as that is indeed the argument made by the central bank. 

“Mortgage holders in Denmark relied on the government’s stable AAA credit grade to finance debt at record-low rates during the fiscal crisis in Europe. While the Organization for Economic Cooperation and Development estimates Danish households owed 310 percent of disposable incomes in 2010, government debt is less than half the euro-zone average at only 45 percent of gross domestic product this year, the European Commission estimates. [….]

The yield on Denmark’s benchmark 10-year government bond soared to 1.96 percent on Monday, its highest since March last year. The yield on the Nykredit Realkredit A/S 3.5 percent mortgage bond due October 2044 soared 10 basis points on Monday to 3.72 percent, according to generic price data compiled by Bloomberg. That yield was as low as 3.33 percent last month.

Is Egypt on the verge of civil war?

If no one can rule effectively, civil war and the fragmentation of Egypt into several mini-states may become a distinct possibility

By Monte Palmer 

As the US struggles to cope with the civil wars in Syria, Libya, the Sudan and Iraq, it must also ponder the prospect of a civil war in Egypt. 

Egypt has been in a state of chaos since the Arab Spring Revolution of January 2011 and there is no end in sight. 

In addition to destroying the center of stability in in the Arab world for the past five decades, a civil war in Egypt would fuel existing civil conflicts in Libya, Yemen, Syria, the Sudan, and Iraq. 

Civil wars in Tunisia, Algeria, Lebanon, and Jordan might not be far behind. All are linked to Egypt by a vast network of Islamic fundamentalist groups ranging from the moderate Muslim Brotherhood to the ultra violent salafi-jihadists. 

The broader ramifications of an Egyptian civil war would certainly include the rekindling of a long dormant Arab-Israeli conflict and a deepening of the Muslim wars of religion being played out in Syria, Iraq, Yemen, Lebanon, and the Persian Gulf. 

Is Egypt on the verge of civil war? General Fua'd Al'lam, a general in the Egyptian Security Services and former Director of Security in Port Said, believes that it is. 

In an interview entitled, "Civil War on the Doorstep Followed by the Revolution of the Hungry," General Al'lam warns that continued chaos will result in civil war and the splintering of Egypt into several mini-states. He goes on to warn, "Civil war is very close, the revolution of hunger very, very close." [1] 

The General's warning was not without foundation. Egypt clearly possesses the preconditions for civil war. The ability of the Egyptian government to meet the basic needs of its population for food, shelter, work, and security fades by the day. Public services have followed suit as shortages of fuel and electricity have become endemic. Religious and class tensions have increased apace, as have political riots and demonstrations. All reflect an economy on the verge of collapse. 

Kierkegaard is needed more than ever

The commitment to the sanctity of the individual undergirds the institutions we inherited from the Revolution and Civil War

By Spengler 

The bicentennial of Soren Kierkegaard's birth passed on May 5 unremarked by the political caste, although a dozen scholarly festivals quietly honored his anniversary. That is a hallmark of our intellectual poverty. The casual reader knows the Danish philosopher as the midnight reading of angst-ridden undergraduates and the stuff of existential pop psychology. 

That is a sad outcome, for Kierkegaard is one of most rigorous philosophers, despite his exhortative style. He asserted the primary of passion, not in the vulgar sense of aroused emotions, but as the primary ontological substance from which our world is built. In a passion-torn world, we should ignore the pop versions and read him more closely. 

If asked, "Who is your favorite political philosopher?," as were the Republican candidates in the 1980 presidential primary, I would have answered, "Kierkegaard." (Actually, it's Franz Rosenzweig, but no-one has heard of him). 

Of course, I would have lost. Passion is passé. Kierkegaard's outlook is close to that of the radical Protestants who fought the American Revolution and the Civil War, but at odds with the main currents of modern conservative thought, that is, classical political rationalism and Catholic natural law theory. Kierkegaard still has a redoubt at St Olaf's College in Minnesota, which sponsors translations and maintains a library of scholarly materials, and a few other Protestant institutions. But one never hears his name in a political context. 

Closer to the conservative mainstream is my friend Peter Berkowitz in his 2012 book Constitutional Conservatism: Liberty, Self-Government, and Political Moderation. As Stanley Kurtz summarized his view at National Review, "By moderation Berkowitz means something a bit different than the everyday use of the word, otherwise Buckley and Reagan wouldn't qualify. Political moderation, says Berkowitz, "doesn't mean selling out causes or making a principle of pragmatism." A true understanding of moderation can even dictate strong stances and bold opposition to popular movements. Real political moderation, Berkowitz explains, means balancing worthy yet competing principles and putting them effectively into practice." As a matter of practice, Berkowitz "calls on conservatives to make a peace of sorts with both the sexual revolution and the fundamentals of the New Deal welfare state, without, on the other hand, surrendering either their fundamental principles or their core battles." 

There is much wisdom in Berkowitz's view. Still, I disagree with him on two grounds. 

Milton Friedman: Freshwater Keynesian

When Professor Friedman Opened Pandora’s Box: Open Market Operations

by David Stockman

At the end of the day, Friedman jettisoned the gold standard for a remarkable statist reason. Just as Keynes had been, he was afflicted with the economist’s ambition to prescribe the route to higher national income and prosperity and the intervention tools and recipes that would deliver it. The only difference was that Keynes was originally and primarily a fiscalist, whereas Friedman had seized upon open market operations by the central bank as the route to optimum aggregate demand and national income.

There were massive and multiple ironies in that stance. It put the central bank in the proactive and morally sanctioned business of buying the government’s debt in the conduct of its open market operations. Friedman said, of course, that the FOMC should buy bonds and bills at a rate no greater than 3 percent per annum, but that limit was a thin reed.

Indeed, it cannot be gainsaid that it was Professor Friedman, the scourge of Big Government, who showed the way for Republican central bankers to foster that very thing. Under their auspices, the Fed was soon gorging on the Treasury’s debt emissions, thereby alleviating the inconvenience of funding more government with more taxes.

Friedman also said democracy would thrive better under a régime of free markets, and he was entirely correct. Yet his preferred tool of prosperity promotion, Fed management of the money supply, was far more anti-democratic than Keynes’s methods. Fiscal policy activism was at least subject to the deliberations of the legislature and, in some vague sense, electoral review by the citizenry.

By contrast, the twelve-member FOMC is about as close to an unelected politburo as is obtainable under American governance. When in the fullness of time, the FOMC lined up squarely on the side of debtors, real estate owners, and leveraged financial speculators—and against savers, wage earners, and equity financed businessmen—the latter had no recourse from its policy actions.

The greatest untoward consequence of the closet statism implicit in Friedman’s monetary theories, however, is that it put him squarely in opposition to the vision of the Fed’s founders. As has been seen, Carter Glass and Professor Willis assigned to the Federal Reserve System the humble mission of passively liquefying the good collateral of commercial banks when they presented it.

Consequently, the difference between a “banker’s bank” running a discount window service and a central bank engaged in continuous open market operations was fundamental and monumental, not merely a question of technique. By facilitating a better alignment of liquidity between the asset and liability side of the balance sheets of fractional reserve deposit banks, the original “reserve banks” of the 1913 act would, arguably, improve banking efficiency, stability, and utilization of systemwide reserves.