Eulogy for the Castro revolution

Let Cuba be Cuban, again

By Roger Noriega 

Today in Havana, the Castro regime will stage a commemoration of the 60th anniversary of the 1953 attack on the Moncada Barracks in Santiago, Cuba. As the revolutionary tale goes, the attack was a tactical defeat but set the stage for Fidel Castro’s victory a mere six years later. Six decades later, we can conclude that the attack was a tragedy, quite literally because it gave impetus to Castro’s tropical totalitarianism.

Last week, Fidel’s 82 year old little brother, Raul, delivered a speech that was an unwitting eulogy for the revolution. Before the powerless “National Assembly of People’s Power,” the aging dictator groused about uncouth youth who curse and urinate in public, saying, “They ignore the most basic standards of gentility and respect.” Never mind that Raul is the triggerman for a thuggish dictatorship that has destroyed the lives of young and old alike formore than 50 terrible years.

When Fidel turned over the presidency to his brother five years ago, I predicted that Raul had neither the capacity nor desire to bring about meaningful change in Cuba. I am sad to say that he has proven me right.

On repeated occasions, I have cited empirical data that expose the breathtaking destruction wrought by communism against Cubans:

· Castro apologists have painted pre-revolutionary Cuba as a repressive backwater, a picture that is not supported by the evidence. In fact, the Cuba Castro took over in 1959 was one of the most prosperous and egalitarian societies of the Americas, near the top according to most sociodemographic indicators, behind only Argentina and Uruguay and on par with lesser-developed European countries of the day, such as Spain and Portugal.

Although, to be sure, the country suffered from the inequalities of wealth that plagued all countries in Latin America at that time (and still do), Cuba had the largest middle class of its peers in the Western Hemisphere.

· Before the revolution, Cuba had the third highest daily caloric intake in Latin America, the fourth highest literacy rate, the second highest number of passenger cars per capita, and ranked fourth in the production of rice. While the revolution touts Cuba’s low infant mortality rate today, they fail to mention that before Castro the island had the best such rate in Latin America, or that, today, regime hospitals coerce poor and uneducated women into having abortions.

· The country was also culturally advanced before Castro seized power, with the third highest newspaper circulation per capita and second highest cinema attendance per capita in Latin America.

· In the 1940s and 1950s, the island had progressive labor, land tenure, education, and health laws that rivaled those of many of its neighbors in the region.

What are the achievements of the Castro revolution? Decimation of Cuba’s social fabric and economic productivity. Destruction of its democratic institutions. Concentration of all power and coercive means in the hands of unelected leaders and unaccountable apparatchiki. Conspiracy to sow violence and death in the form of armed revolutions. A never-ending exile of the country’s most creative people. Corruption. Desperation.

This is what the Cuban regime is celebrating today? At long last, have they no shame? Of course not. That is why Raul Castro can wag his finger at unruly Cubans for behaving like – to borrow a word bandied about by Josef Stalin – “hooligans.” The desiccated Castro regime is so bereft of new ideas that its leaders can do little more than blame the victims of its old ideas. Its plan for economic survival is to find a new victim, conspiring with a puppet regime in Venezuela to bleed away what is left of that country’s oil revenue.

Depressing, huh?  Not if you figure that despicable old men cannot live forever.  Know what I know about Cuba its people, my formula for recovering that nation is a verysimple one:  Let Cuba be Cuban, again. 

Without A Proper Plan!

Freedom is a superior value even if acting freely can be morally odious

By Tibor R. Machan

A vital difference between champions of the fully free society (or libertarianism) and others who are concerned with political economic matters is that the former really do not approve of imposing any kind of agenda on the lives of others no matter how desirable it would be. Not even universal education, let alone universal health care, is deemed important enough for libertarians to assume power over other people — e.g., the parents of children, those with ailing elderly in their homes, etc. Unless there really is negligence involved, such that someone is failing to fulfill a legal obligation to feed his or her children, the government simply has no role. Furthermore, those who really accept the imperative to respect the rights of everyone to live as they choose provided no one’s rights are being violated, may not force others to do the right thing in, say, abstaining from racial or gender discrimination at the workplace, just as this is something one may not impose on others in their personal lives.

This full commitment to human liberty is really quite an unusual and often difficult stance to uphold. Yet it is at the heart of the difference between what a free and what an authoritarian or totalitarian society is about. Just as no one may force others to go to a certain church, regardless of how sincerely and devoutly one holds to one’s religious faith, neither may these other practices that to many appear to be elementary decency be imposed on other persons. Just as no one may impose on others what they must read, so others must not be forced to do all kinds of things that are deemed to be just and proper. Just as in one’s personal life one must be free to choose with whom one will or will not associate, the same holds for one’s professional associations. (There are some intricacies here that can make it appear that one isn’t free to avoid others with whom one doesn’t want to fraternize — as when one joins a club that has a non-discriminatory policy — but those are complications that would need to be discussed elsewhere.)

Many decent people recoil in disgust from these elements of a free society while they accept others which are very similar. They do not mind that freedom implies that people can read or write whatever they please, however immoral it may be; yet they refuse to accept that one has a basic — and should have a legal — right to adopt highly objectionable policies at the factory or office that one owns. They see nothing odd about people refusing to accept someone into their family who does not share their religious or even political convictions while they consider it impermissible that they may refuse to hire such people even if this is a fully disclosed condition for employment.

On Appeasing Envy

A government that pays social blackmail will precipitate the very consequences that it fears

by Henry Hazlitt

Any attempt to equalize wealth or income by forced redistribution must only tend to destroy wealth and income. Historically the best the would-be equalizers have ever succeeded in doing is to equalize downward. This has even been caustically described as their intention. “Your levellers,” said Samuel Johnson in the mid-eighteenth century, “wish to level down as far as themselves; but they cannot bear levelling up to themselves.”

And in our own day we find even an eminent liberal like the late Mr. Justice Holmes writing: “I have no respect for the passion for equality, which seems to me merely idealizing envy.”[1]

At least a handful of writers have begun to recognize explicitly the all-pervasive role played by envy or the fear of envy in life and in contemporary political thought. In 1966, Helmut Schoeck, professor of sociology at the University of Mainz, devoted a scholarly and penetrating book to the subject, to which most future discussion is likely to be indebted.[2]

There can be little doubt that many egalitarians are motivated at least partly by envy, while still others are motivated, not so much by any envy of their own, as by the fear of it in others, and the wish to appease or satisfy it. But the latter effort is bound to be futile. Almost no one is completely satisfied with his status in relation to his fellows.

In the envious the thirst for social advancement is insatiable. As soon as they have risen one rung in the social or economic ladder, their eyes are fixed upon the next. They envy those who are higher up, no matter by how little. In fact, they are more likely to envy their immediate friends or neighbors, who are just a little bit better off, than celebrities or millionaires who are incomparably better off. The position of the latter seems unattainable, but of the neighbor who has just a minimal advantage they are tempted to think: “I might almost be in his place.”

Moreover, the envious are more likely to be mollified by seeing others deprived of some advantage than by gaining it for themselves. It is not what they lack that chiefly troubles them, but what others have. The envious are not satisfied with equality; they secretly yearn for superiority and revenge. In the French Revolution of 1848, a woman coal-heaver is said to have remarked to a richly dressed lady: “Yes, madam, everything’s going to be equal now; I shall go in silks and you’ll carry coal.”

Envy is implacable. Concessions merely whet its appetite for more concessions. As Schoeck writes: “Man's envy is at its most intense where all are almost equal; his calls for redistribution are loudest when there is virtually nothing to redistribute.”[3]

(We should, of course, always distinguish that merely negative envy which begrudges others their advantage from the positive ambition that leads men to active emulation, competition, and creative effort of their own.)

But the accusation of envy, or even of the fear of others’ envy, as the dominant motive for any redistribution proposal is a serious one to make and a difficult if not impossible one to prove. Moreover, the motives for making a proposal, even if ascertainable, are irrelevant to its inherent merits.

We can, nonetheless, apply certain objective tests. Sometimes the motive of appeasing other people's envy is openly avowed. Socialists will often talk as if some form of superbly equalized destitution were preferable to “maldistributed” plenty. A national income that is rapidly growing in absolute terms for practically everyone will be deplored because it is making the rich richer. An implied and sometimes avowed principle of the British Labour Party leaders after World War II was that “Nobody should have what everybody can't have.”

America’s Detroit Future

Obama’s politics and policies promise nothing less

By Peter Ferrara 

In the 1950s, Detroit was the fourth largest city in America, with a population of nearly 2 million. It was also a middle class paradise, with the highest median family income of all major cities in the entire country. The last Republican mayor of Detroit was elected in the 1950s.

Then the 1960s happened, and Detroit became a socialist one party state. And you know what that one party was. Over the next half century, city politics in Detroit was a battle between Left and Lefter, or socialism versus communism. Let’s face reality and speak the truth. We see there the heart and soul of the Democratic Party, what comes out when the party is left undisturbed, and is free to be what it wants to be.

As a result, taxes, government spending, and disabling regulation of evil profit-making activity (business) boomed. Detroit residents came to pay the highest income and property taxes in the state, and Michigan is not known as a low tax state. Businesses within the state became a target for tax plunder. Last year, financially desperate Detroit doubled its business tax, administering one last lash to the golden goose before going down, as that counterproductively only made the problem worse rather than better.

Government employee unions and their self-interested political activism took over the city, with the support of the city’s population thinking that whatever the unions wanted had to be good for working people and the middle class. Taxes, of course, are mother’s milk for government employee unions, who literally eat and live off of taxes.

The city took on massive effective government debt in the form of unfunded liabilities for government employee pension and health care promises. Detroit came to be the cutting edge for overpaid government employees, with excessive benefits and promises of ever more. That cutting edge has blossomed today into state and local government workers nationally paid on average 45% more than the private sector workers who must pay the taxes to support them. Government pay and benefits for state and local workers nationally now totals $80,000 per year on average.

Those government bureaucrats, after a career of back breaking work in their offices driving businesses out of the city, if not out of business altogether, generally feel they have to retire at age 55. Studies show that, realistically evaluated, unfunded liabilities for state and local public employee pension and promised retirement health benefits total $5.2 trillion, effectively adding about a third to the national debt burden on taxpayers. In Detroit, retirement benefits and debt eat up about 40% of revenue, effectively consuming nearly every dollar of city property taxes, which so heavily burden private sector retirees.

Moreover, Detroit’s bloated, overstaffed bureaucracy today employs one worker for every 50 city residents remaining. Indianapolis provides much better services, with one worker for every 223 residents. But Indianapolis has remained a Republican town.

For all of Detroit’s runaway government spending, government services in the city became pitiful. The high school drop out rate in Detroit reached as high as 76 percent in recent years. Yet per pupil spending in Detroit public schools is higher than in rich and prosperous Marin County, California, where the high school graduation rate is 97%. Maybe that is because in return for the non-education of the young in Detroit, public school teachers there enjoy the highest pay in the country among major metropolitan areas, at nearly $50 an hour.

For all the taxes and spending in Detroit, the city slashed its police force by 40% over the past decade. (Cops are not the foot soldiers of socialism.) Maybe that is why the average wait for police response to an emergency phone call is 58 minutes in Detroit, five times the national average. Maybe that has something to do with Detroit suffering one of the highest violent crime rates in the country as well.

That crime is effectively yet another tax driving businesses out of the city, or out of business altogether. Who is going to invest in Detroit to create jobs and increase wages when that investment is subject to plunder by criminals, and whatever survives is subject to plunder by taxes and hostile bureaucrats? No wonder one-third of Detroit residents live in poverty.

The Blip

Is U.S. Economic Growth Over?

What if everything we've come to think of as American is predicated on a freak coincidence of economic history? And what if that coincidence has run its course?

By Benjamin Wallace-Wells

Picture this, arranged along a time line.

For all of measurable human history up until the year 1750, nothing happened that mattered. This isn't to say history was stagnant, or that life was only grim and blank, but the well-being of average people did not perceptibly improve. All of the wars, literature, love affairs, and religious schisms, the schemes for empire-making and ocean-crossing and simple profit and freedom, the entire human theater of ambition and deceit and redemption took place on a scale too small to register, too minor to much improve the lot of ordinary human beings. In England before the middle of the eighteenth century, where industrialization first began, the pace of progress was so slow that it took 350 years for a family to double its standard of living. In Sweden, during a similar 200-year period, there was essentially no improvement at all. By the middle of the eighteenth century, the state of technology and the luxury and quality of life afforded the average individual were litt le better than they had been two millennia earlier, in ancient Rome.

Then two things happened that did matter, and they were so grand that they dwarfed everything that had come before and encompassed most everything that has come since: the first industrial revolution, beginning in 1750 or so in the north of England, and the second industrial revolution, beginning around 1870 and created mostly in this country. That the second industrial revolution happened just as the first had begun to dissipate was an incredible stroke of good luck. It meant that during the whole modern era from 1750 onward – which contains, not coincidentally, the full life span of the United States – human well-being accelerated at a rate that could barely have been contemplated before. Instead of permanent stagnation, growth became so rapid and so seemingly automatic that by the fifties and sixties the average American would roughly double his or her parents' standard of living. In the space of a single generation, for most everybody, life was ge tting twice as good.

At some point in the late sixties or early seventies, this great acceleration began to taper off. The shift was modest at first, and it was concealed in the hectic up-and-down of yearly data. But if you examine the growth data since the early seventies, and if you are mathematically astute enough to fit a curve to it, you can see a clear trend: The rate at which life is improving here, on the frontier of human well-being, has slowed.

Egypt: The Hypocrisy of Human Rights Industry

Westerners who love to be outraged by foreign tyranny are blasé about Egypt's

By BRENDAN O’NEILL

Imagine if, in 1973, with elected Chilean leader Salvador Allende being swept from power in a bloody military coup by the unelected General Augusto Pinochet, a group like Amnesty International chose to focus its attentions almost exclusively on the plight of a poet being banged up in, say, Belarus. Even if you believed the imprisonment of poets to be a very bad thing, you would think that was weird, right?

A case of twisted priorities.

Well, the equivalent is happening right now. In Egypt, a military dictatorship has deposed and imprisoned an elected president, massacred hundreds of his supporters, and created government departments to oversee the interrogation and torture of ‘terrorists’ (otherwise known as Muslim Brotherhood voters). And yet the big issue on Amnesty’s online activism page is, as it has been for months, the continuing legal fights of imprisoned Russian punk band Pussy Riot. It seems if you want to win the attention of the West’s best-known human-rights outfit, it helps to be pretty white women with guitars rather than gruff brown men with beards.

There are many striking things about the political situation in Egypt. But perhaps the most striking thing is the silence of those who pose as human-rights cheerleaders, of the West’s head-shakers over tyranny in far-off lands, who have gone strangely mute, or at least uncharacteristically coy, in the face of the Egyptian military’s seizure of power and repression of dissent.

When Character is Lost

Government power is destroying the character of a people before our very eyes

A recent New York Times piece provides a living example of exactly the kind of unfortunate path that can result when socialism and a lack of person responsibility combine--this time in Cuba. 

There was a time, Alexi remembers, when life in Cuba was simpler. People dressed properly. Children respected their elders. Stealing was stealing.

“My father brought me up with a strict set of values,” said Alexi, 46, an unemployed chauffeur from a gritty quarter of the capital. "But that has been lost."

In Socialism the State's robbing people of their initiative, their dignity, their sense of accomplishment. But none perhaps is as stark as what is going on in Cuba right now. 

The article details how the people of that unfortunate island are reduced to breaking the law just to survive or to feel like human beings. As a result, order breaks down. At the same people, personal initiative and a sense of responsibility are stolen from the people, and so they search for someone (anyone!) to blame. Meanwhile, why should they take care of their cities, neighborhoods, children? It's not their fault and they have no power over their own lives. 

It's an example of government power destroying the character of a people before our very eyes.

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Harsh Self-Assessment as Cuba Looks Within

By VICTORIA BURNETT

There was a time, Alexi remembers, when life in Cuba was simpler. People dressed properly. Children respected their elders. Stealing was stealing.

“My father brought me up with a strict set of values,” said Alexi, 46, an unemployed chauffeur from a gritty quarter of the capital. “But that has been lost.”

Money demand and banking

Some challenges for the “Free Bankers”

by DETLEV SCHLICHTER

Within the Austrian School of Economics there has long been disagreement and therefore occasionally fierce debate about the nature and consequences of fractional-reserve banking, from here on called simply FRB. FRB denotes the practice by banks of issuing, as part of their lending activities, claims against themselves, either in the form of banknotes or demand deposits (fiduciary media), that are instantly redeemable in money proper (such as gold or state fiat money, depending on the prevailing monetary system) but that are not fully backed by money proper. To the extent that the public accepts these claims and uses them side by side with money proper, gold or state fiat money, as has been the case throughout most of banking history, the banks add to the supply of what the public uses as money in the wider sense.

Very broadly speaking, and at the risk of oversimplifying things, we can identify two camps. There is the 100-percent reserve group, which considers FRB either outright fraud or at least some kind of scam, and tends to advocate its ban. As an outright ban is difficult for an otherwise libertarian group of intellectuals to advocate – who would ban it if there were no state? – certain ideas have taken hold among members of this group. There is the notion that without state support – which, at present, is everywhere substantial – the public would not participate in it, and therefore it would not exist, or that it constitutes a fundamental violation of property rights, and that it would thus be in conflict with libertarian law in a free society. This position is most strongly associated with Murray Rothbard, and has, to various degrees and with different shadings, been advocated by Hans-Hermann Hoppe, Jesus Huerto de Soto, and Jörg Guido Hülsmann.

The Graffiti on the Wall

The future belongs to those who show up for it

By mark steyn

Timing is everything, even in apocalyptic doom-mongering. When my book America Alone came out in 2006, the conventional wisdom was that its argument about Europe's demographic death spiral was "alarmist" (The Economist). Seven years on, it's so non-alarmist that even the Washington Post is running stories about the Continent's "plummeting" birth rates. The Post's focus was on a small corner of the Portuguese interior, wherein their reporter met Maria Jesus Rodrigues, 87, who recently moved into the old folks' home from her nearby village. The youngest resident is 57. Not in the old folks' home, but in the village. That's to say, the entire parish qualifies for membership in the AARP, which regards you as a potentially "retired person" from the age of 50.

"Retirement" is an invention of the 20th century, and will not long outlive it. When everyone's a senior, nobody is — because, if there are no young people around to pave the roads, police the streets, weed your garden, fix your roof, give you a bed bath, and change your feeding tube, you're going to have to do it yourself. In The Children of Men, P. D. James's dystopian novel of a world turned mysteriously barren, the roads are potholed and broken, and the buildings crumbling, for want of a sufficiently able-bodied population to maintain them. By 2021, the year Lady James's story is set in, much of inland Portugal will be approaching the same condition — not through biological affliction, but through a kind of silent mass consensus that this is no longer a world worth bringing children into. "A country without children is a nation without a future," warned Aníbal Cavaco Silva, Portugal's president, in 2007, since when the fertility rate has nosedived. Why would you have a kid in Portugal? The country's youth-unemployment rate is over 40 percent. In Spain it's 57 percent, and in Greece just shy of 63 percent.

Death by Treacle

Sentiment surfaces fast and runs hot in public life, dumbing it down and crippling intimacy in private life

By Pamela Haag

When I was a child, I knew national flags by the color and design alone; today I could know diseases the same way. This occurs to me on my morning commute as I note the abundance of magnetic awareness ribbons adhering to cars. A ribbon inventory on the Internet turns up 84 solid colors, color combinations, and color patterns, although there are certainly more. The most popular colors must multitask to raise awareness of several afflictions and disasters at once. Blue is a particularly hard-working color, the new black of misfortunes; 43 things jockey to be the thing that the blue ribbon makes us aware of.

Awareness-raising and fundraising 5K races augment the work of the ribbons. Maryland, where I live, had 28 5K races in one recent two-month period. I think it might be possible to chart a transcontinental route cobbled together entirely by annual 5K charity and awareness runs. Some memorialize a deceased loved one or raise funds for an affliction in the family (“Miles for Megan,” for example, or “Bita’s Run for Wellness”); others raise awareness of problems ranging from world health to Haiti to brain injury. A friend of mine who works in fundraising and development once observed, and lamented, that some medical problems were more popular than others and easier to solicit money for. Conditions with sentimental clout elicit more research donations, and cute endangered animals such as the giant panda, the World Wildlife Fund’s mascot, lure more donations than noncuddly ones.

On some days you’ll see makeshift shrines for victims of car accidents or violence by the side of the road, placed next to a mangled guardrail or wrapped around a lamppost. As more people hear of the tragedy, teddy bears, flowers, and notes accumulate. Princess Diana’s was the biggest of such shrines, a mountain of hundreds of thousands of plastic-sheathed bouquets outside her residence. Queen Elizabeth resisted the presumptuous momentum of all the grief but finally relented and went to inspect the flower shrine and its handwritten messages, a concession to sentiment depicted in the movie The Queen. Maybe I was the only one in the theater who thought the Queen was right; I rooted for her propriety over Tony Blair’s dubious advice that she drag the monarchy into the modern age by publicly displaying a sentiment she probably didn’t feel. The mourners didn’t even know Diana, the queen reasoned by an obsolete logic of restrained stoicism, and the palace flag didn’t fly at half-mast even for more illustrious figures. But she caved in the end. We most always do.

Southern Delusions

'Like the Coming of the Messiah'

by Pater Tenebrarum

Apparently politicians in the Southern European periphery are the victims of some sort of mass delusion. Their shared hope is that Germany's chancellor Ms. Merkel will somehow be transmogrified by her likely reelection and become a kind of Teutonic Santa Claus overnight. According to a press report

“Like the coming of the messiah, depressed southern Europe nations await Angela Merkel's likely victory in Germany's September election with a mixture of hope and trepidation.

Four years into the euro zone debt crisis, people in debt-laden Spain, Italy, Greece, Portugal and Cyprus are deeply worried that a third term in power for the conservative chancellor may only bring them more austerity and pain.

The five countries that implemented Merkel's anti-crisis recipes and cut spending massively in areas such as health and education, have been in or close to recession since 2008. Unemployment tops 27 percent in Spain and Greece.

Their leaders, however, disagree. Confident that Merkel will tone down her budget cutting mantra and accept more burden-sharing within the euro zone, they are positioning themselves as close allies of Europe's main paymaster.

"I think we will see a different Mrs Merkel after the elections," said Cypriot President Nicos Anastasiades, echoing a view shared by most of his fellow southern European leaders.

Turning “A Parliamentary Democracy Into A Banana Republic”

NSA Spying in Germany

By Wolf Richter   

“The largest espionage scandal in the 21st century is shaking Germany,” wrote Peer Steinbrück, the man who is desperately trying to unseat one of the most popular German politicians, Chancellor Angela Merkel, as massive anti-NSA protests spread across the country.... Well, not quite: 1,000 demonstrators straggled through Frankfurt. It’s going to be tough for him.

Edward Snowden’s revelation of widespread US and British spying on German internet and telecommunications – and Germany’s own role in it – damaged confidence in the democratic rule of law, and suspicions were growing that constitutional rights had been “systematically violated millions of times,” he asserted in a guest commentary in the Frankfurter Rundschau – 56 days before the election. The SPD’s candidate for chancellor, and erstwhile Finance Minister under Merkel’s grand coalition government of 2005-2009, was running out of time.

Back in June, 100 days before the election, only 14% of German voters believed that he could become chancellor, while 78% believed that he was electoral road kill. Even among SPD supporters, moroseness had taken over: only 22% believed he’d make it. The spy scandal might be his last chance. Only a big debacle could unseat Merkel. But Germany was on vacation, and the government would simply not allow any big debacles to transpire before the elections.

So Interior Minister Hans-Peter Friedrich was sent to the forefront to defend the NSA’s surveillance programs. July 12, he went to the US ostensibly to be briefed by the NSA and came back a strong supporter. At the time, he said they’d prevented five terror attacks in Germany. Later, he was forced to cut that down to two.

Rouhanimania grips world attention

The word ‘pragmatism’ is what is on everyone’s lip

By M K Bhadrakumar

The transition of power next week in Tehran makes Iran look what it is in actuality in the volatile Middle eastern region — an oasis of stability. What makes this orderly possible is the political legitimacy of the Iranian regime and its very substantial social base, the erosion that is inevitable through decades in power notwithstanding. 

So, we now know that President Mahmoud Ahmedinejad is returning to his profession — academia. No heartburns there. The irony is there, of course, that the new university proposes to specialize in nuclear engineering. But then, obviously, Supreme Leader Ali Khamenei approves it. 

The president-elect Hassan Rouhani is also having his way putting together his cabinet and it is taken for granted as his prerogative to summon back the old wizard of Iran’s all-powerful oil ministry Bijan Zanganeh to handle matters once again — presumably, in anticipation that the industry needs to be revved up, technologically upgraded, hopefully with western technology and investment, so that Iran can emerge as a major exporter, hopefully to the western market. 

War against Iran, Iraq AND Syria?

Round up all the Prada jihadis

By Pepe Escobar 
Amidst the incessant rumble in the (Washington) jungle about a possible Obama administration military adventure in Syria, new information has come to light. And what a piece of Pipelineistan information that is. 
Picture Iraqi Oil Minister Abdelkarim al-Luaybi, Syrian Oil Minister Sufian Allaw, and the current Iranian caretaker Oil Minister Mohammad Aliabadi getting together in the port of Assalouyeh, southern Iran, to sign a memorandum of understanding for the construction of the Iran-Iraq-Syria gas pipeline, no less. 

At Asia Times Online and also elsewhere I have been arguing that this prospective Pipelinestan node is one of the fundamental reasons for the proxy war in Syria. Against the interests of Washington, for whom integrating Iran is anathema, the pipeline bypasses two crucial foreign actors in Syria - prime "rebel" weaponizer Qatar (as a gas producer) and logistical "rebel" supporter Turkey (as the self-described privileged energy crossroads between East and West). 

The US$10 billion, 6,000 kilometer pipeline is set to start in Iran's South Pars gas field (the largest in the world, shared with Qatar), and run via Iraq, Syria and ultimately to Lebanon. Then it could go under the Mediterranean to Greece and beyond; be linked to the Arab gas pipeline; or both. 

Norway is a Junkie, and Oil is its Heroin

Buying Votes with Oil Money

Norway's socialist prime minister Jens Stoltenberg: provider of welfare-statism financed by oil revenues (a.k.a. 'the pusher').

by Pater Tenebrarum

People usually don't care much about Norway, on account of its relatively small size, population-wise (4.5 million inhabitants). However, as we have noted on previous occasions, its economy is beset by the Scandinavian bubble disease, with household debt growing to the sky and real estate prices exploding into the blue yonder. The central bank, faced with what it deems an overvalued currency, has kept interest rates at rock-bottom, continuing to fuel these twin bubbles. Nothing can possibly go wrong of course.

However, Norway is also quite unique due to being blessed with large oil wealth. Considering the tiny population, this oil wealth has allowed politicians to both save funds for a rainy day (said rainy day will arrive once the oil runs out, or so the theory goes), as well as financing a vast socialistic welfare state. Note that just because the central authority has lots of money to throw around, socialism cannot really be improved upon. It would still be far better for the country if the services provided by the government were provided by the market. And yet, Norway's government wants to throw more money around and enlarge the welfare state even further, in the hope of getting re-elected. As this is what it is going to use some of the accumulated wealth from oil sales for, we can state that saving for the dreaded 'rainy day' has for now given way to the exigencies of elections.

Throwing even more funds on the bubble bonfire that is Norway is not really apt to improve the country's economic risk profile. According to Bloomberg:

“Prime Minister Jens Stoltenberg pledged to build Norway’s welfare system, financed by the nation’s $750 billion oil fund, as he trails in the polls behind an opposition that’s promised tax cuts.

Stoltenberg, who is seeking an unprecedented third four-year term in September elections, said western Europe’s biggest oil producer needs a more developed system of public benefits as his Labor-led coalition raises spending by 19 percent in 2013.

I live with my parents

Madrid: Dignity and Indignation

By Aaron Shulman

Since I moved to Spain two and a half years ago, my personal life has settled into a state of contentment I’d never before even thought to contemplate. I married a Spanish woman on an Andalusian patio with orange trees; my 89-year-old grandmother was present, along with two dozen other relatives and friends from America. I’ve made close friends here with whom I can grab beers and talk about anything from private difficulties to the novels of Roberto Bolaño. My in-laws say I fit into the family like a puzzle piece, and when Elisa and I visit they always have the local delicacies I adore waiting for me: Córdoba-style oxtail, flamenquínes, cured Iberian ham. In other words, though the United States is my first home, I’ve been lucky enough to find a second home here. And yet there’s a bitter corollary: we have to leave. “I feel like Spain is kicking us out,” Elisa says from time to time as tears form in her eyes. I can’t help but agree, and we’re not the only ones who feel this way.

To say that unemployment is bad in Spain is like saying that the sea is watery. The situation is that oceanically obvious. Since the global economic crisis began,paro—the Spanish word for unemployment—has been rising over the country like a patient, ineluctable flood. Twenty-five percent of the population is jobless, and this leaves out the considerable number of eternal students, young men and women who, lacking alternatives, accrue degree after degree. The phenomenon has a name, titulitis, that reflects both the Spanish sense of humor and the feeling of an ailment infecting the future of the most highly educated generation in the country’s history. The 18-to-35 age group faces a 50 percent unemployment rate. I think back to 2004, the year of my college graduation. A sense of possibility remained strong even then, long after the 1990s boom had passed. And then I think of a student protest slogan today in Spain: Pre-Parado—another bit of wordplay—which means both ready in the sense of educated and pre-unemployed.

European Theater of the Absurd

It’s not the Moon that Makes People Mad – it is the Sun

by Pater Tenebrarum

Last week, Mish wrote about the recent plan of Spain's government (a 'conservative' government, no less) to actually tax sunlight. At first we though there must be an error. Could it really be that what Bastiat thought to be so utterly absurd he used it in his famous 'Petition of the Candlemakers' to satirize the errors of protectionists and mercantilists has now become reality in  a truly bizarre example of life imitates art? Is it possible that the Spaniards are so devoid of humor they don't recognize that the ridicule coefficient of this idea is truly off the scale?

One must keep in mind though that this is Europe and Spain is part of the EU. There isn't anything the ruling castes will not think about taxing. Breathing is probably next in line; after all, we humans exhale that 'dangerous poison gasCO₂'. What better way to reduce our 'carbon footprint' than charge us for breathing, which is evidently endangering the planet?

However, in Spain's case the reasons for the proposed new tax are more crassly commercial, since solar panels are obviously widely approved as planet-saving devices. No, it is simply about subsidizing the existing providers of electricity by making solar energy more uneconomic. After solar energy has finally become remotely viable, the EU is doing whatever it can to make it non-viable again. These are the same impertinent bureaucrats who have made the light bulb illegal citing 'climate change'. In reality that was of course just a flimsy pretext as well. They were lobbied (read: probably bribed) by industry, which now is making a mint from selling people lighting devices that seemingly come straight from the morgue. Not only that, since the 'energy savings lamps' contain plenty of mercury, they actually really are poisonous. If one of them breaks in a classroom, the whole school must be evacuated.

The Economist as Novelist in the Greek ‘Crisis’

The never-ending crisis in Greece is not merely financial, but social and political as well

by Theodore Dalrymple

The relationship between economics on the one hand and disciplines such as history, psychology, and sociology on the other is much disputed and seems to me a little like that of couples who live in a state of hostile dependence: they cannot live together but cannot live apart.

Are there rules of political economy such that if they are obeyed prosperity invariably and everywhere results? Or, of course, if disobeyed, impoverishment? Ought an economist to be more like a novelist in his understanding than a scientist?

I recently read an article by Barry Eichengreen, professor of economics and political science at Berkeley, about the Greek crisis, if a situation that has continued for years can properly be called a crisis. The article addresses the mistakes made by Greece. 

Amen to that: who wants to repeat mistakes?

But what exactly is or was the Greek mistake? We cannot trace it back to the Garden of Eden, though that is undoubtedly where things first began to go wrong in Greece, as everywhere else. Professor Eichengreen’s question is really this: the Greek situation having once arisen (never mind whether it ought to have arisen, it is part of the human condition always to be setting out from where we ought not to be), how should it have been dealt with?

Certainly not the way it actually was dealt with, on that many people are agreed. The IMF, one of the three institutions that recommended, dictated and oversaw the response, has issued a kind of mea culpa, acknowledging that its prescription was not right: though I doubt (and I apologize in advance if I am mistaken) that anyone will lose his or her job over the mere ruination of a country. Love is never having to say you’re sorry; being an international bureaucrat is never having to lose your job if you do say sorry.

Professor Eichengreen says that two thirds of the Greek debt, which is obviously unsustainable, should have been written off at the outset; the interest payments saved by the Greeks could have been used to recapitalize its banks and to reduce rather than increase taxes. This would have resulted in investment which would soon have got the Greek economy moving again.

The second thing that should have happened was an orderly internal devaluation (the Greeks, being members of the Eurozone, couldn’t arrange an external one) combined with structural reforms. By internal devaluation the professor means a reduction of salaries and pensions, all brought about consensually by agreement between the unions, the bosses and the politicians. The economic pain and discomfort would thus have been shared equitably, and this would have been propitious for the necessary structural reforms that Greece has so far been unable to carry out.

All this seems very sensible to me, except for two things. The first is that Greece is not an island; and the international conjuncture at the time the Greek crisis erupted is omitted from the professor’s recommendation in hindsight that two thirds of the Greek debt should at once have been restructured or in effect written off. This might have been possible if Greece had been the only country in crisis: but it wasn’t, and what was sauce for the Greek goose would, for political reasons, have had to be sauce for the Irish, Portuguese and other ganders. Writing off the Irish debt to the same extent as the Greek – a debt contracted in a very different manner from the Greek, but a debt nonetheless – would have entailed losses of more than $200,000,000,000 for the British, German and Belgian banks. The near-simultaneous default of several deeply indebted states would thus have been a nerve-wracking experiment. Politicians preferred – and who can really blame them? – to pretend for a few more years that the debts were performing and that the banks were solvent in the Micawber-like hope that something – strong growth, perhaps, or more likely inflation – would turn up in the meantime to make the debts manageable.

Seven reasons to hate your parents: Reason #5

The higher "education" scam 

 

by Eugen von Böhm-Bawerk 
In their quest to avoid reality, our parents tried to re-establish the medieval practice of guilds to protect their own interest from our generation

In medieval time’s workers formed associations or guilds to control the practice of their particular craft. A guild was basically a state granted privilege designed to keep potential new comers from entering and hence competing in the particular line of business. Often these guilds emerged around universities with the blessing from the monarch in return for a fee or taxes. The appearance of protective guilds traces as far back as the 13th century.

However, toward the end of the 18th and through the 19th century outspoken intellectuals such as Adam Smith, David Ricardo, John Stuart Mill and Frederic Bastiat managed to rationally argue against guilds and in favour for free trade. Even left-wing thinkers such as Jean Jacques Rousseau and Karl Marx meant the guilds system was degrading to the worker as it locked in social rank and hampered social mobility. It basically was a caste system. By the time scientific thinking and economics in particular, had matured to the extent witnessed by 19th century, no arguments could maintain the continuation of guilds. Thus, we saw guilds being abandoned one by one all over Western Europe. The abolishment of guilds is mostly forgotten when historians today try to explain the “lift-off” and industrial revolution that led to prosperity for the masses!

So why do our parents insist on re-establishing this medieval practice of protection? There can be few other explanations than that they want to keep the goodies for themselves. By making it much harder for us to enter their domain they can reap the benefits while we pay.

The process of creating guilds today takes many forms, but the most prevalent is through the educational system. In order to secure a job at a big corporation the minimum requirement is always a Bachelor`s degree, and very often a Master’s degree. Truth be told, many seek menial corporate jobs with Ph.Ds. We have witnessed all this first hand. A big corporation does not even bother to look at your application unless you hold a Master`s degree from a relatively well renowned University.

Your humble writer has spent five years obtaining a Master degree and can confirm that 90 per cent of the time spent during those five years is a complete waste of time. The diploma derives its entire value solely by functioning as a ticket where the winning price is the opportunity to apply for a job. In the process almost every student has to go deep into debt!

What is even worse is that our parents taught us it didn’t really mean much what you studied, as long as you could prove to have wasted five years of your life. That is all that is needed to secure a ticket. Most of the education today is not investments, but simply kids spending time on their hobbies. Gender studies, fashion design, theatre, history, photography, art etc. may all be interesting, but are strictly speaking only hobbies.