Social Security: The Most Successful Ponzi Scheme in History

The flower in the seed

by Gary Galles

“We paid our Social Security and Medicare taxes; we earned our benefits.” It is that belief among senior citizens that President Obama was pandering to when, in his second inaugural address, he claimed that those programs “strengthen us. They do not make us a nation of takers.”

If Social Security and Medicare both involved people voluntarily financing their own benefits, an argument could be made for seniors’ “earned benefits” view. But they have not. They have redistributed tens of trillions of dollars of wealth to themselves from those younger.

Social Security and Medicare have transferred those trillions because they have been partial Ponzi schemes.

After Social Security’s creation, those in or near retirement got benefits far exceeding their costs (Ida Mae Fuller, the first Social Security recipient, got 462 times what she and her employer together paid in “contributions”). Those benefits in excess of their taxes paid inherently forced future Americans to pick up the tab for the difference. And the program’s almost unthinkable unfunded liabilities are no less a burden on later generations because earlier generations financed some of their own benefits, or because the government has consistently lied that they have paid their own way.

Since its creation, Social Security has been expanded multiple times. Each expansion meant those already retired paid no added taxes, and those near retirement paid more for only a few years. But both groups received increased benefits throughout retirement, increasing the unfunded benefits whose burdens had to be borne by later generations. Thus, each such expansion started another Ponzi cycle benefiting older Americans at others’ expense.

Social Security benefits have been dramatically increased. They doubled between 1950 and 1952. They were raised 15 percent in 1970, 10 percent in 1971, and 20 percent in 1972, in a heated competition to buy the elderly vote. Benefits were tied to a measure that effectively double-counted inflation and even now, benefits are over-indexed to inflation, raising real benefit levels over time.

Disability and dependents’ benefits were added by 1960. Medicare was added in 1966, and benefits have been expanded (e.g., Medicare Part B, only one-quarter funded by recipients, and Part D’s prescription drug benefit, only one-eighth funded by recipients).

The massive expansion of Social Security is evident from the growing tax burden since its $60 per year initial maximum (for employees and employers combined). Tax rates have risen and been applied to more earnings, with Social Security now taking a combined 12.4 percent of earnings up to $113,700 (and Medicare’s 2.9 percent combined rate applies to all earnings, plus a 0.9 percent surtax beyond $200,000 of earnings).

Historic Nuclear Agreement Reached With Iran

P5+1 and Iran Agree Landmark Nuclear Deal at Geneva Talks

By Russia Today

The P5+1 world powers and Iran have struck a historic deal on Tehran’s nuclear program at talks in Geneva on Sunday. Ministers overcame the last remaining hurdles to reach agreement, despite strong pressure from Israel and lobby groups.

Under the interim agreement, Tehran will be allowed access to $4.2 billion in funds frozen as part of the financial sanctions imposed on Iran over suspicions that its nuclear program is aimed at producing an atomic bomb.

As part of the deal Iran has committed to:

-  Halt uranium enrichment to above 5 per cent.-  Dismantle equipment required to enrich above 5 per cent.-  Refrain from further enrichment of its 3.5 per cent stockpile.-  Dilute its store of 20 per cent-enriched uranium.-  Limit the use and installation of its centrifuges.-  Cease construction on the Arak nuclear reactor.-  Provide IAEA inspectors with daily access to the Natanz and Fordo sites.

Iran’s foreign minister, Javad Zarif, called the deal a “major success” and said Tehran would expand its cooperation with the International Atomic Energy Agency (IAEA).

While Iranian President Hassan Rouhani announced that the deal reached in Geneva shows that world powers have recognized Tehran’s “nuclear rights.”

“Constructive engagement [and] tireless efforts by negotiating teams are to open new horizons,” Rouhani said on Twitter shortly after the announcement.

In turn, the IAEA said it is ready to check that Iran keeps its commitments under the deal.

“With the agreement of the IAEA’s Board of Governors, the Agency will be ready to fulfill its role in verifying the implementation of nuclear related measures,” said Director General Yukiya Amano as cited by Reuters.

Foreign ministers from the US, Russia, UK, France, China, Germany and the EU hailed the deal as a step toward a “comprehensive solution” to the nuclear standoff between Tehran and the West. The interim deal was reached early Sunday morning in Geneva after some 18 hours of negotiation.

“While today’s announcement is just a first step, it achieves a great deal,” 

US President Barack Obama said in a statement at the White House. 

“For the first time in nearly a decade, we have halted the progress of the Iranian nuclear program, and key parts of the program will be rolled back.”

Obama’s Surrender of Nuclear Non-Proliferation Can Clarify American Interests

There is value in leaving no doubt about reality

by Angelo M. Codevilla

Obama is making sure that nothing will stand in the way of Iran’s acquisition of nuclear weapons. Veiling that with a transparently insincere claim to be “freezing” Iran’s quest, and leaving in the lurch governments and peoples that had counted on his promises, he dishonors America. Thus does he guarantee that many more governments will acquire such weapons, and consigns to history the very ideal of nuclear non-proliferation.

But let us look on the bright side: There is value in leaving no doubt about reality.

In reality, nothing was going to stop Iran’s march to nuclear weapons, and nuclear non-proliferation was always a pipe dream. Governments of Europe and of the Middle East will now have to take responsibility for their own defense. And as soon as the inevitability of a world armed with nuclear-tipped missiles dawns through of Obama’s thin smoke screen, America’s ruling class will have to get serious about missile defense – a half century after it should have.

A generation of American statesmen had dreamt of staving off Iran’s nukes. But the Clintonian Liberal Internationalists’ offers of development aid never stood a chance of derailing a project that is dear to Iranians of all political stripes. Nor did some Bushy Neocons’ talk of “regime change” or other Bushies’ empty threats of “surgical strikes” frighten the Iranians away from it any more than did the Obamians’ “smart sanctions.”

Preventing Iran from going nuclear would require war. War, not bombing, which would merely delay the inevitable, but war – meaning above all a total, deadly secondary trade boycott backed by a blockade. Any military operations would be aimed at crushing (easily) any Iranian attempt to interfere with Persian Gulf shipping. The war’s objective would be the imposition of a more tractable regime. Anyhow, nobody in power ever gave this a second thought. Too hard.

Iran's Nuclear Triumph

Tehran can continue to enrich uranium at 10,000 working centrifuges

By Paul Gigot

President Obama is hailing a weekend accord that he says has "halted the progress of the Iranian nuclear program," and we devoutly wish this were true. The reality is that the agreement in Geneva with five Western nations takes Iran a giant step closer to becoming a de facto nuclear power.

Start with the fact that this "interim" accord fails to meet the terms of several United Nations resolutions, which specify no sanctions relief until Iran suspends all uranium enrichment. Under this deal Iran gets sanctions relief, but it does not have to give up its centrifuges that enrich uranium, does not have to stop enriching, does not have to transfer control of its enrichment stockpiles, and does not have to shut down its plutonium reactor at Arak.

Mr. Obama's weekend statement glossed over these canyon-sized holes. He said Iran "cannot install or start up new centrifuges," but it already has about 10,000 operational centrifuges that it can continue to spin for at least another six months. Why does Tehran need so many centrifuges if not to make a bomb at the time it pleases?

The President also said that "Iran has committed to halting certain levels of enrichment and neutralizing part of its stockpiles." He is referring to an Iranian pledge to oxidize its 20% enriched uranium stockpile. But this too is less than reassuring because the process can be reversed and Iran retains a capability to enrich to 5%, which used to be a threshold we didn't accept because it can easily be reconverted to 20%.

Mr. Obama said "Iran will halt work at its plutonium reactor," but Iran has only promised not to fuel the reactor even as it can continue other work at the site. That is far from dismantling what is nothing more than a bomb factory. North Korea made similar promises in a similar deal with Condoleezza Rice during the final Bush years, but it quickly returned to bomb-making.

As for inspections, Mr. Obama hailed "extensive access" that will "allow the international community to verify whether Iran is keeping its commitments." One problem is that Iran hasn't ratified the additional protocol to its International Atomic Energy Agency agreement that would allow inspections on demand at such sites as Parchin, which remain off limits. Iran can also oust U.N. inspectors at any time, much as North Korea did.

Then there is the sanctions relief, which Mr. Obama says is only "modest" but which reverses years of U.S. diplomacy to tighten and enforce them. The message is that the sanctions era is over. The loosening of the oil regime is especially pernicious, inviting China, India and Germany to get back to business with Iran.

We are told that all of these issues will be negotiated as part of a "final" accord in the next six months, but that is not how arms control works. It is far more likely that this accord will set a precedent for a series of temporary deals in which the West will gradually ease more sanctions in return for fewer Iranian concessions.

Allies Fear a U.S. Pullback in Mideast

Latest Evidence War-Weary U.S. Seeks to Close Books on Region's Long-Term Problems

By GERALD F. SEIB

America's allies in Israel and Saudi Arabia view the new nuclear agreement with Iran with a mixture of unease and alarm. But for some in the skeptics' camp, the broader concern extends well beyond the preliminary nuclear deal.

Their underlying worry is that the negotiations with Iran represent just the latest evidence that a war-weary U.S. is slowly seeking to close the books on a series of nettlesome long-term problems, allowing Washington to pull back from its longtime commitment to the Middle East.

In this view, the attempt to bring the nuclear dispute with Iran to a close without military action is of a piece with other steps the Obama administration has taken: withdrawals from Iraq and Afghanistan, in each case amid doubts whether much of an American presence will remain; an agreement on Syria that leaves Bashar al-Assad in power, without his chemical weapons but also without being subjected to a U.S. military strike; even an effort to achieve an Israeli-Palestinian peace deal that could finally close the book on Secretary of State John Kerry's renewed effort to resolve

Though each of those steps can be seen as a logical policy evolution, America's friends worry that the administration's moves, when taken together, indicate the U.S. has simply lost its appetite for continued entanglements in a region that has been at the center of American foreign policy since at least the 1973 Arab-Israeli war. Israel and Saudi Arabia in particular worry that a deal that accepts even a diminished or constrained Iranian nuclear program will result in a region in which Tehran plays a bigger role and America, freed of the need to suppress Iran's nuclear ambitions, a smaller one.

This is hardly what the administration says it is up to, of course. President Barack Obama, in announcing the preliminary nuclear accord with Iran over the weekend, specifically sought to reassure America's partners in the region. "As we go forward," he said, "the resolve of the United States will remain firm, as will our commitments to our friends and allies—particularly Israel and our Gulf partners, who have good reason to be skeptical about Iran's intentions."

Moreover, senior U.S. officials insist that, even if the preliminary nuclear accord works and leads to a permanent understanding on Iran's nuclear program, that won't magically produce some broader rapprochement with Iran and the clerical regime that rules the country.

Iran Pact Faces Stiff Opposition

Israel and Some U.S. Lawmakers Blast Interim Deal to Curb Nuclear Program, Ease Sanctions

By JAY SOLOMON

A groundbreaking deal to curb Iran's nuclear program faces towering obstacles at home and abroad to becoming a permanent agreement, starting with the U.S. Congress and two of America's closest allies.

The leaders of both the Democratic and Republican parties are threatening to break with President Barack Obama's policy and enact new punitive sanctions on Iran, arguing that the interim deal reached in Geneva on Sunday yields too much to the Islamist regime while asking too little.

"The disproportionality of this agreement makes it more likely that Democrats and Republicans will join together and pass additional sanctions when we return in December," said Sen. Charles Schumer (D., N.Y.), an influential member of the

Such a move could kill the nascent nuclear accord, U.S. and Iranian officials agree, and add to more recent political embarrassments for the White House.

Reaching a comprehensive deal with Iran also faces formidable diplomatic and technical challenges, said U.S. and European officials. Washington wants to eventually dismantle much of Iran's nuclear infrastructure, including a heavy water reactor and enrichment facilities, steps Tehran has so far refused to take.

The White House has signaled it would defend the agreement by directly appealing to lawmakers and to foreign leaders. Mr. Obama on Sunday spoke by telephone to Israeli Prime Minister Benjamin Netanyahu, who has campaigned against the pact. The U.S. leader said he wanted to consult with Israelis on talks, and agreed Mr. Netanyahu "has good reason to be skeptical about Iran's intentions."

Iran celebrated the deal on Sunday as a political victory for President Hasan Rouhani and a step toward economic relief.

A final agreement could underpin broader American efforts to stabilize the Middle East and end conflicts in Syria and between Israel and the Palestinians, where Tehran actively supports militant groups, these officials said.

Senior U.S. officials said Sunday that a successful conclusion of an Iran accord could redefine the U.S.-Iran relationship, which has been marked by open hostilities since the 1979 Islamic revolution in Tehran.

"I think this is potentially a significant moment, but I'm not going to stand here in some triumphal moment and suggest to you that this is an end unto itself," Secretary of State John Kerry said Sunday, following two days of exhaustive negotiations.

As a side benefit, experts expect to see the easing of tensions with Iran lead to a reduction in world oil prices, although the effects will depend in part on how much Iranian oil returns to the market.

Despite the lures of a permanent deal, the Obama administration's outreach to Tehran carries great risks, said U.S. and Mideast officials. Key American allies, including Saudi Arabia and Israel, are publicly challenging the U.S. policy, claiming it directly threatens their security.

Camus and Monod - Courage and Genious

The story of two men whose lives embodied resistance, humanism and intellectual inspiration

By ALEXANDER ADAMS

When Albert Camus died in a car accident in 1960, the Nobel Laureate was mourned not only as a creative artist but also as a moral philosopher. Camus championed moderation, dialogue and the inalienable dignity of the individual at a time when – in France – partisan loyalty to nation and party often led people to advocate and defend acts of barbarity. Camus refrained from becoming too publicly involved in the debate over Algeria, first in the grip of civil unrest then wracked by civil war, but instead worked to influence events behind the scenes. Acutely sensitive to the suffering of fellow Algerians, he knew his pleas for clemency from the French government and moderation from FLN insurgents would draw condemnation from both ends of the political spectrum.

Even Sartre, Camus’s ally-turned-opponent, admitted he was ‘an admirable conjunction of a person, an action, and a work’.

One of those most deeply touched by Camus’ death was Jacques Monod, a leading microbiologist at the Pasteur Institute. The two shared an outlook on life and had both been members of the wartime resistance movement - Monod as a military commander and Camus as a journalist and printer for the newspaper Combat. They epitomised existentialist man, free thinkers who had the courage to act independently of the shackles of religious and political doctrine, even at the risk of their lives. And death was never far away during the dark days of occupation between 1940 and 1944. Page after page of Brave Genius – Sean B Caroll’s new account of Camus’ and Monod’s friendship – documents fellow resistance workers who were imprisoned, tortured and executed. Camus and Monod came very close to arrest and death on several occasions. 

The men got to know each other socially only after the war. It was the Lysenko affair that brought them closely together in 1948. Soviet biologist Trofim Lysenko claimed that he had proof that acquired characteristics of plants could be passed on, thereby overturning evolutionary science. Biological life was not inherited in a Darwinian fashion but was actually Marxian in character – through circumstance and will, lifeforms could transform themselves and exercise self-determination. Established genetic science was condemned by the USSR as ‘bourgeois genetics’ and all dissent against the Lysenko doctrine was banned.

The World of English Freedoms

It's no accident that the English-speaking nations are the ones most devoted to law and individual rights

By DANIEL HANNAN

Asked, early in his presidency, whether he believed in American exceptionalism, Barack Obama gave a telling reply. "I believe in American exceptionalism, just as I suspect the Brits believe in British exceptionalism and the Greeks believe in Greek exceptionalism."

The first part of that answer is fascinating (we'll come back to the Greeks in a bit). Most Brits do indeed believe in British exceptionalism. But here's the thing: They define it in almost exactly the same way that Americans do. British exceptionalism, like its American cousin, has traditionally been held to reside in a series of values and institutions: personal liberty, free contract, jury trials, uncensored newspapers, regular elections, habeas corpus, open competition, secure property, religious pluralism.

The conceit of our era is to assume that these ideals are somehow the natural condition of an advanced society—that all nations will get around to them once they become rich enough and educated enough. In fact, these ideals were developed overwhelmingly in the language in which you are reading these words. You don't have to go back very far to find a time when freedom under the law was more or less confined to the Anglosphere: the community of English-speaking democracies.

In August 1941, when Franklin Delano Roosevelt and Winston Churchill met on the deck of HMS Prince of Wales off Newfoundland, no one believed that there was anything inevitable about the triumph of what the Nazis and Communists both called "decadent Anglo-Saxon capitalism." They called it "decadent" for a reason. Across the Eurasian landmass, freedom and democracy had retreated before authoritarianism, then thought to be the coming force. Though a small number of European countries had had their parliamentary systems overthrown by invaders, many more had turned to autocracy on their own, without needing to be occupied: Austria, Bulgaria, Estonia, Germany, Greece, Hungary, Italy, Latvia, Lithuania, Poland, Portugal, Romania, Spain.

Churchill, of all people, knew that the affinity between the United States and the rest of the English-speaking world rested on more than a congruence of parliamentary systems, and he was determined to display that cultural affinity to maximum advantage when he met FDR.

It was a Sunday morning, and the British and American crewmen were paraded jointly on the decks of HMS Prince of Wales for a religious service. The prime minister was determined that "every detail be perfect," and the readings and hymns were meticulously chosen. The sailors listened as a chaplain read from Joshua 1 in the language of the King James Bible, revered in both nations: "As I was with Moses, so I will be with thee: I will not fail thee, nor forsake thee. Be strong and of a good courage."

Lee Harvey Oswald Was My Friend

History can be altered by small players as well

By PAUL GREGORY

It was 7 a.m. on Sunday when the single phone at the bottom of the stairs echoed through my parents’ red-brick house, right off Monticello Park in Fort Worth. “Mr. Gregory,” a woman said as my father picked up, “I need your help.” Who are you? he asked in his Texas-Russian accent, still half-asleep.

The caller said only that she had been a student in his Russian language course at our local library, and that he knew her son. In that instant, my father, Pete Gregory, linked the voice to a nurse who sat in the back of his class and had once identified herself as “Oswald.” Until this phone call, he hadn’t realized that she was the mother of Lee Harvey Oswald, a Marine who had defected to the Soviet Union only to return two and a half years later with a Russian wife and a 4-month-old daughter. My father helped Lee and his young family get settled in Fort Worth a year earlier. The Oswalds had been my friends.

My father now understood that the woman on the other end of the line, Marguerite Oswald, must have taken his class to communicate with her daughter-in-law, Marina, who spoke little English. It was also clear why she needed his help. Two days earlier, Marguerite’s son shot the president of the United States. While Lee Harvey Oswald was sitting in a Dallas jail cell, his wife and mother and two young daughters were hiding out at the Executive Inn, a commuter hotel near the airport, where they were taken and then abandoned by a team of Life magazine staff members. Marina Oswald had become the most wanted witness in America. She needed a translator fast.

Hours after the Kennedy assassination, my parents and I experienced the shared horror of realizing that the Lee Oswald we knew, the one who had been in our house and sat at our dinner table, was the same man who had just been accused of killing the president. The Secret Service first knocked on my parents’ door at 3 a.m. on the morning of Nov. 23, 1963. The following day, just 45 minutes after my father hung up with Marguerite, an agent named Mike Howard picked him up and drove him to a Howard Johnson’s on the Fort Worth-Dallas Turnpike, where they met Robert Oswald, Lee’s brother. As the family’s translator of choice, my father was now part of the plan to get the Oswald women out of the dingy hotel room and into a safe house that Robert had arranged at his in-law’s farm, north of the city, so Marina could be questioned.

Game of Thrones – European Style

Winter Is Coming

BY JOHN MAULDIN

In 2009-10 it seemed like this letter was all Europe all the time. There was a never-ending crisis from one corner of the Continent to the other. That time seems to have slowly faded from our collective consciousness, but the Eurozone crisis is not over, and it will not end quickly or soon. Even if it seems to unfold in slow motion – like the slow build-up in a Game of Thrones storyline to violent internecine clashes followed by more slow plot developments but never any real resolution, the Eurozone debacle has never really gone away. The structural imbalances have still not been fixed; politicians and central bankers have still not agreed to solve major fiscal problems; the overall economy still disintegrates; unemployment is staggeringly high in some countries and still rising; and the people are growing restless.

Just as in the Game of Thrones, the Eurozone drama seems to drag on interminably. It seems to take forever to get to the next installment. I think GRR Martin (the wickedly brilliant creator of the series) should be confined to his Santa Fe villa until he finishes his epic – one of the few lapses in my personal belief that we should be allowed the freedom to control our own time. I read the first of the books in 1996 and the fifth when it came out in 2011, and he will need to finish at least two more. You can do the math, but it is clearly taking longer and longer between books – just as Europe seems to be taking longer and longer between successive peaks of its crisis. Perhaps we should confine the leaders of Europe to a far-northern Scandinavian hotel with hard beds and minimal amenities until they resolve their problems.

In the latest installment of the Eurozone crisis, deflation is back and winter is coming. This week we'll look at what is shaping up to be a very interesting year in Europe. I am going to visit a number of themes and offer links to readers who want to delve more deeply, as to develop each one would take several months' worth of letters. Next year it probably shall.

One of the continuing themes in the Game of Thrones is that a winter of epic proportions looms in the immediate future, and the world is not prepared for it. "Winter is coming" is whispered by worried wise men who urge various leaders to prepare, yet they put off the necessary in the face of the urgent. Signs that a European winter, too, is coming have lately been cropping up.

Key measures of inflation are decelerating across the Eurozone, and the region is as close as it has ever been to a deflationary bust. It's troubling enough that Eurozone headline CPI collapsed from 1.1% in August to 0.7% in September and that core CPI fell from 1.0% to 0.8% over the same period; but measures of Eurozone money supply (M1, M2, & M3) are also decelerating rapidly, suggesting that the deflationary trend will most likely continue without decisive action from the ECB, which has been strangely absent from the current rush by central bankers to print mountains of money. And the ECB could actually make a case for such action!

Even worse, this new round of borderline deflationary data is coming not just from a small number of lost causes like Greece or Cyprus. Ten out of the seventeen Eurozone countries experienced rapidly decelerating inflation rates over the past few months, including Italy and France. Spain officially fell into deflation for the first time since February 2010. In many ways, the situation is even worse than the CPI numbers suggest. Note that Italy, France, and Germany all hover barely above 1% inflation. And their numbers are falling.

There are two major problems associated with an extended period of ultra-low inflation or deflation in the Eurozone. First, peripheral countries will have a much harder time servicing and retiring their debts without the extra boost to nominal GDP that positive inflation provides. Even if you are working on lowering the absolute amount of your debt, it is impossible to improve your debt-to-GDP ratio when GDP is falling and your debts are growing. Moreover, outright deflation works to crush debtors (and debtor nations) by increasing the real weight of the debt and triggering the destructive debt-deflation cycle described in Irving Fisher's Debt Deflation Theory of Great Depressions(1933).

Confessions of a Quantitative Easer

We went on a bond-buying spree that was supposed to help Main Street. Instead, it was a feast for Wall Street.

By ANDREW HUSZAR

I can only say: I'm sorry, America. As a former Federal Reserve official, I was responsible for executing the centerpiece program of the Fed's first plunge into the bond-buying experiment known as quantitative easing. The central bank continues to spin QE as a tool for helping Main Street. But I've come to recognize the program for what it really is: the greatest backdoor Wall Street bailout of all time.

Five years ago this month, on Black Friday, the Fed launched an unprecedented shopping spree. By that point in the financial crisis, Congress had already passed legislation, the Troubled Asset Relief Program, to halt the U.S. banking system's free fall. Beyond Wall Street, though, the economic pain was still soaring. In the last three months of 2008 alone, almost two million Americans would lose their jobs.

The Fed said it wanted to help—through a new program of massive bond purchases. There were secondary goals, but Chairman Ben Bernanke made clear that the Fed's central motivation was to "affect credit conditions for households and businesses": to drive down the cost of credit so that more Americans hurting from the tanking economy could use it to weather the downturn. For this reason, he originally called the initiative "credit easing."

My part of the story began a few months later. Having been at the Fed for seven years, until early 2008, I was working on Wall Street in spring 2009 when I got an unexpected phone call. Would I come back to work on the Fed's trading floor? The job: managing what was at the heart of QE's bond-buying spree—a wild attempt to buy $1.25 trillion in mortgage bonds in 12 months. Incredibly, the Fed was calling to ask if I wanted to quarterback the largest economic stimulus in U.S. history.

This was a dream job, but I hesitated. And it wasn't just nervousness about taking on such responsibility. I had left the Fed out of frustration, having witnessed the institution deferring more and more to Wall Street. Independence is at the heart of any central bank's credibility, and I had come to believe that the Fed's independence was eroding. Senior Fed officials, though, were publicly acknowledging mistakes and several of those officials emphasized to me how committed they were to a major Wall Street revamp. I could also see that they desperately needed reinforcements. I took a leap of faith.

In its almost 100-year history, the Fed had never bought one mortgage bond. Now my program was buying so many each day through active, unscripted trading that we constantly risked driving bond prices too high and crashing global confidence in key financial markets. We were working feverishly to preserve the impression that the Fed knew what it was doing.

It wasn't long before my old doubts resurfaced. Despite the Fed's rhetoric, my program wasn't helping to make credit any more accessible for the average American. The banks were only issuing fewer and fewer loans. More insidiously, whatever credit they were extending wasn't getting much cheaper. QE may have been driving down the wholesale cost for banks to make loans, but Wall Street was pocketing most of the extra cash.

The End of the Political Party

Plans to rebrand the Conservatives reveal the shallowness of party politics

By TIM BLACK

And so the Conservative Party’s efforts not to be the Conservative Party anymore continue. Following in the footsteps of Tory MSP Murdo Fraser, who suggested quasi-independence and a new name for the voter-repellent Scottish Conservative Party in 2011, Conservative local government and planning minister Nick Boles has suggested an equally cunning plan to attract those people to the Conservative Party who don’t like anything about the Conservative Party: set up a new party.

It’s not a completely new party. In fact, Boles’ suggestion, the National Liberal Party (which existed between 1931 and 1968), is an old adjunct of the Tories proper. Still, its function would be very much of this era: to ‘detoxify the Tory brand’.

Speaking to Westminster Tory discussion group, Bright Blue, this is how Boles justified reviving the NLP: ‘The Conservative Party will only rebuild itself as a national party which can win majorities on its own if it understands that it cannot do so by making a single undifferentiated pitch to every age group and in every part of the country… We could use [the NLP] to recruit new supporters who might initially balk at the idea of calling themselves Conservative.’

It’s an absurd, slightly disconcerting ploy, but the very fact that a Tory minister offered it up as a viable plan reveals much about the husk-like condition of Britain’s main parties - despite Tory leader and prime minister David Cameron dismissing the idea. Because what Boles highlights is how the political party, an institution, in the Tories’ case, built on hundreds of years of tradition and political struggle, is ceasing to be a political party at all. That is, even for the politicians themselves, the political party is no longer an embodiment of a set of ideas, a vision of how things ought to be given organisational form. In fact, the party in Boles’ telling doesn’t seem to be much at all. Rather, it is at most an electoral brand to be stamped on to a section of the political class, much as commercial logos are stamped on to bags of dried pasta.

Turkey pushes crossroads politics

It's all about Pipelineistan 

By Pepe Escobar 
While everyone is concentrated on the possibility of a tectonic shift in US-Iran relations, and while a solution may be found for the Syrian tragedy in another upcoming set of negotiations in Geneva, Turkey is silently toiling in the background. Let's see what these sultans of swing are up to. 

We start on the internal front. Abdul Mejid I, the 31st Ottoman sultan (in power from 1839 to 1861) always dreamed of a submerged tunnel under the Bosphorus linking Europe to Asia. 

It took "Sultan" Erdogan, as in Prime Minister Recep Tayyip Erdogan, to make it happen, when last month he inaugurated – on the 90th anniversary of the founding of Ataturk's Republic - the US$3 billion, 76-kilometer Marmaray rail system which, in the hardly hyperbolic words of Mustafa Kara, mayor of Istanbul's Uskudar district (where the tunnel comes out), will "eventually link London to Beijing, creating unimagined global connections". [1] 

It certainly helps that this technological marvel fits right into China's extremely ambitious New Silk Road(s) strategy which, just like the original Silk Road, starts in Xian, and aims to cross to Europe via, where else, Istanbul. [2] 

So the fact remains that "Sultan" Erdogan simply has not been downed by the Gezi Park protests last June. All the ruling party AKP's mega-projects - supported by millions in rural Anatolia, ignored for decades by the secular elites in Istanbul - are alive and kicking. 
By 2025, more than a million commuters will be using the Marmaray. The third Bosphorus bridge, close to the Black Sea, is being built - despite Alevi fury that it will be named after Selim The Grim, a sultan who ordered the slaughter of thousands of Alevis. Same for the new six-runway airport northwest of Istanbul. And then there's the 50 km "crazy canal" (Erdogan's own definition), linking the Sea of Marmara to the Black Sea, so monstrous tanker traffic may be diverted away from the Bosphorus. The Turkish green movement insists this could destroy whole aquatic ecosystems, but Erdogan is unfazed.

Mexico’s Growing Middle Class

There’s a lot to be excited about in Mexico

Mexico’s economy sputtered earlier this year, but a recovery—however anemic—is on the way, and as the NYT reports, the country is seeing promising signs for growing its middle class:

After the free-market wave of the 1990s failed to produce much more than low-skilled factory work, Mexico is finally attracting the higher-end industries that experts say could lead to lasting prosperity. Here, in [Guanajuato, Mexico,] a mostly poor state long known as one of the country’s main sources of illegal immigrants to the United States, a new Mexico has begun to emerge.

Dozens of foreign companies are investing, filling in new industrial parks along the highways. Middle-class housing is popping up in former watermelon fields, and new universities are waving in classes of students eager to study engineering, aeronautics and biotechnology, signaling a growing confidence in Mexico’s economic future and what many see as the imported meritocracy of international business. In a country where connections and corruption are still common tools of enrichment, many people here are beginning to believe they can get ahead through study and hard work.

So often, the media coverage we see of Mexico ignores the solid but less sensational progress our southern neighbor is making in favor of salacious, bloody stories of a country torn apart by a prolonged drug war. The widespread violence remains a huge problem for Mexican President Enrique Peña Nieto, but unlike his predecessor Nieto seems willing to tackle many of the other problems Mexico faces. He pushed through education reform, is working to restructure the nation’s telecoms industry, and maybe most importantly is in the process of securing reforms to the nation’s constitution to bring private, foreign investment into the country’s energy resources.

Mexico has tremendous potential—the CEO of the country’s state-owned oil company predicted his country could be the “new Middle East,” and cheap energy could mold it into a manufacturing powerhouse. There’s a lot to be excited about in Mexico, and for the US, having a stronger, stabler southern neighbor is a welcome change, too.

Lee Harvey Oswald, Disappointed Revolutionary

Oswald's time in the Soviet Union shows that he was a troubled soul, capable of killing the president all by himself

By PETER SAVODNIK

On the morning of Jan. 7, 1960, Lee Harvey Oswald boarded a train in Moscow heading west. That evening, he arrived in Minsk, in the Belorussian Soviet Socialist Republic. He had just a few things: a change of clothes, a diary, a copy of Fyodor Dostoevsky's "The Idiot," which the KGB had given him for his 20th birthday. He was exuberant. In Minsk, he expected to build a new life and to escape his past—his mother, Texas, the Marines. He had written a letter to his mother and his brother, Robert, telling them to forget him. "I do not wish to [ever] contact you again," he wrote. "I am beginning a new life, and I don't want any part of the old."

Oswald's Russian foray was a failure, of course. Two-and-a-half years after turning up in Minsk, he and his wife, Marina, and their baby, June, left the Soviet Union. He had hoped to join the revolution, but there was no revolution to join. Long before he arrived, it had been snuffed out by the Gulag, the purges, the war. It had been eclipsed by a new craving for stability and single-family apartments and television sets. He returned to the U.S. in June 1962 more alienated than he had ever been. Seventeen months later, he murdered John F. Kennedy —a national trauma whose 50th anniversary we mark next month.

Today, when we talk about Lee Harvey Oswald, he is usually portrayed as a cog in the detective story surrounding Kennedy's assassination. He is viewed not as a three-dimensional character in a Shakespearean tragedy—which he was—but as an instrument whose actions were orchestrated by others: the mob, the CIA, Fidel Castro, the KGB. We seem mostly uninterested in the meaning of Oswald and much more concerned with the supposedly dark and clandestine forces behind him.

But a closer look at Oswald's life—his history, his personality, the relationships he forged, the fragmented political tracts he wrote—makes it abundantly clear that he was capable of killing the president all by himself. If we focus on his Soviet period, the most important chapter in his truncated, 24-year life, it is possible to piece together a more complete picture of Oswald.

None Dare Call it Prostitution

About Roses and Thorns

by Theodore Dalrymple

Reading recently a monograph about the lives of heroin addicts in preparation for an article about addiction I had been commissioned to write, I came across a couple of comparatively new locutions that irritate me: sex work and sex worker. What is meant by these, of course, is prostitution and prostitute. (Female heroin addicts are often prostitutes as well as addicts.) In the Anglo-Saxon world at least, there seems to be a law of the conservation of prudery: If we are not prudish about one thing, we are prudish about another, the total amount of prudery remaining constant. 

Medical journals now use these locutions as a matter of course, and since English is now the sole language of medicine and science, we spread our prudery with the same self-righteousness and moral rectitude as that for which missionaries were once famous—or infamous. 

The new locutions, obligatory in the polite company of the politically correct, are not only prudish but are instances of magical thinking. Those who insist upon their use think that by changing the word they will change the thing. For them, the problem with prostitution is not the phenomenon in itself and all that hitherto has inevitably surrounded it, but the stigma that attaches to it. And this, they think, can be eliminated, or at least reduced, by a change in nomenclature. For them a rose would not smell as sweet by any other name, nor would a skunk smell as bad by some other name.

Not only is the world more intractable than this supposes, but if prostitution were really no different from, say, nursing or teaching as a profession, it would not be an activity whose name the righteous reformers of the world dared not pronounce.

When political correctness trumps human lives

A very dangerous game

By Thomas Sowell

New York City police authorities are investigating a series of unprovoked physical attacks in public places on people who are Jewish, in the form of what is called "the knockout game."

The way the game is played, one of a number of young blacks decides to show that he can knock down some stranger on the streets, preferably with one punch, as they pass by. Often some other member of the group records the event, so that a video of that "achievement" is put on the Internet, to be celebrated.

The New York authorities describe a recent series of such attacks and, because Jews have been singled out in these attacks, are considering prosecuting these assaults as "hate crimes."

Many aspects of these crimes are extremely painful to think about, including the fact that responsible authorities in New York seem to have been caught by surprise, even though this "knockout game" has been played for years by young black gangs in other cities and other states, against people besides Jews -- the victims being either whites in general or people of Asian ancestry.

Attacks of this sort have been rampant in St. Louis. But they have also occurred in Massachusetts, Wisconsin and elsewhere. In Illinois the game has often been called "Polar Bear Hunting" by the young thugs, presumably because the targets are white. The main reason for many people's surprise is that the mainstream media have usually suppressed news about the "knockout game" or about other and larger forms of similar orchestrated racial violence in dozens of cities in every region of the country. Sometimes the attacks are reported, but only as isolated attacks by unspecified "teens" or "young people" against unspecified victims, without any reference to the racial makeup of the attackers or the victims -- and with no mention of racial epithets by the young hoodlums exulting in their own "achievement."

Despite such pious phrases as "troubled youths," the attackers are often in a merry, festive mood. In a sustained mass attack in Milwaukee, going far beyond the dimensions of a passing "knockout game," the attackers were laughing and eating chips, as if it were a picnic. One of them observed casually, "white girl bleed a lot."

That phrase -- "White Girl Bleed A Lot" -- is also the title of a book by Colin Flaherty, which documents both the racial attacks across the nation and the media attempts to cover them up, as well as the local political and police officials who try to say that race had nothing to do with these attacks.

Chapter 2 of the 2013 edition is titled, "The Knockout Game, St. Louis Style." So this is nothing new, however new it may be to some in New York, thanks to the media's political correctness.

Nor is this game just a passing prank. People have been beaten unconscious, both in this game and in the wider orchestrated racial attacks. Some of these victims have been permanently disabled and some have died from their injuries.

But most of the media see no evil, hear no evil and speak no evil. In such an atmosphere, the evil not only persists but grows.

Some in the media, as well as in politics, may think that they are trying to avoid provoking a race war by ignoring or playing down these attacks. But the way to prevent a race war is by stopping these attacks, not trying to sanitize them.

If these attacks continue, and continue to grow, more and more people are going to know about them, regardless of the media or the politicians.

Responsible people of all races need to support a crackdown on these attacks, which can provoke a white backlash that can escalate into a race war. But political expediency leads in the opposite direction.

What is politically expedient is to do what Attorney General Eric Holder is doing -- launch campaigns against schools that discipline a "disproportionate" number of black male students. New York City's newly elected liberal mayor is expected to put a stop to police "stop and frisk" policies that have reduced the murder rate to one-fourth of what it was under liberal mayors of the past.

Apparently political correctness trumps human lives.

Providing cover for hoodlums is a disservice to everybody, including members of every race, and even the hoodlums themselves. Better that they should be suppressed and punished now, rather than continue on a path that is likely to lead to prison, or even to the execution chamber.