How the Paper Money Experiment Will End

We are now in a situation that looks like a dead end for the paper money system

by Philipp Bagus

A paper currency system contains the seeds of its own destruction. The temptation for the monopolist money producer to increase the money supply is almost irresistible. In such a system with a constantly increasing money supply and, as a consequence, constantly increasing prices, it does not make much sense to save in cash to purchase assets later. A better strategy, given this senario, is to go into debt to purchase assets and pay back the debts later with a devalued currency. Moreover, it makes sense to purchase assets that can later be pledged as collateral to obtain further bank loans. A paper money system leads to excessive debt.

This is especially true of players that can expect that they will be bailed out with newly produced money such as big businesses, banks, and the government.

We are now in a situation that looks like a dead end for the paper money system. After the last cycle, governments have bailed out malinvestments in the private sector and boosted their public welfare spending. Deficits and debts skyrocketed. Central banks printed money to buy public debts (or accept them as collateral in loans to the banking system) in unprecedented amounts. Interest rates were cut close to zero. Deficits remain large. No substantial real growth is in sight. At the same time banking systems and other financial players sit on large piles of public debt. A public default would immediately trigger the bankruptcy of the banking sector. Raising interest rates to more realistic levels or selling the assets purchased by the central bank would put into jeopardy the solvency of the banking sector, highly indebted companies, and the government. It looks like even the slowing down of money printing (now called “QE tapering”) could trigger a bankruptcy spiral. A drastic reduction of government spending and deficits does not seem very likely either, given the incentives for politicians in democracies.

So will money printing be a constant with interest rates close to zero until people lose their confidence in the paper currencies? Can the paper money system be maintained or will we necessarily get a hyperinflation sooner or later?

There are at least seven possibilities:

1. Inflate. Governments and central banks can simply proceed on the path of inflation and print all the money necessary to bail out the banking system, governments, and other over-indebted agents. This will further increase moral hazard. This option ultimately leads into hyperinflation, thereby eradicating debts. Debtors profit, savers lose. The paper wealth that people have saved over their life time will not be able to assure such a high standard of living as envisioned.

2. Default on Entitlements. Governments can improve their financial positions by simply not fulfilling their promises. Governments may, for instance, drastically cut public pensions, social security and unemployment benefits to eliminate deficits and pay down accumulated debts. Many entitlements, that people have planned upon, will prove to be worthless.

3. Repudiate Debt. Governments can also default outright on their debts. This leads to losses for banks and insurance companies that have invested the savings of their clients in government bonds. The people see the value of their mutual funds, investment funds, and insurance plummet thereby revealing the already-occurred losses. The default of the government could lead to the collapse of the banking system. The bankruptcy spiral of overindebted agents would be an economic Armageddon. Therefore, politicians until now have done everything to prevent this option from happening.

The Grand Illusion

Social Security Is NOT a Government Insurance Program

By Gary North

I received this email from a self-professed fan. But in his note, he felt obliged to add this:

I do take one strong exception to your statement that Social Security is the largest Ponzi scheme ever. Social Security is an insurance policy. We pay real money to receive real benefits. It currently has over 2 trillion dollar surplus. And, if we simply remove the cap so that the wealthy continue to pay in at the same rate as everyone else, it will be solvent for all time.

So, instead of painting yourself as one of the few intellectual right-wing extremists out there, why don't you use your obvious intellect and be honest about Social Security instead of parroting Fox News talking points?

It never ceases to amaze me that there is anyone out there who still believes any of this. At the age of 17, in 1959, I was taught the truth in a high school civics class. The program is not funded in terms of any insurance program.

First, the Supreme Court of the United States in 1960 declared that the Social Security program is not an insurance program. The case was Fleming v. Nestor. On the Social Security website, we read this.

There has been a temptation throughout the program's history for some people to suppose that their FICA payroll taxes entitle them to a benefit in a legal, contractual sense. That is to say, if a person makes FICA contributions over a number of years, Congress cannot, according to this reasoning, change the rules in such a way that deprives a contributor of a promised future benefit. Under this reasoning, benefits under Social Security could probably only be increased, never decreased, if the Act could be amended at all. Congress clearly had no such limitation in mind when crafting the law. Section 1104 of the 1935 Act, entitled "RESERVATION OF POWER," specifically said: "The right to alter, amend, or repeal any provision of this Act is hereby reserved to the Congress." Even so, some have thought that this reservation was in some way unconstitutional. This is the issue finally settled by Flemming v. Nestor.

In this 1960 Supreme Court decision Nestor's denial of benefits was upheld even though he had contributed to the program for 19 years and was already receiving benefits. Under a 1954 law, Social Security benefits were denied to persons deported for, among other things, having been a member of the Communist party. Accordingly, Mr. Nestor's benefits were terminated. He appealed the termination arguing, among other claims, that promised Social Security benefits were a contract and that Congress could not renege on that contract. In its ruling, the Court rejected this argument and established the principle that entitlement to Social Security benefits is not contractual right.

http://www.ssa.gov/history/nestor.html

Second, there is no money in the Social Security Trust Fund. There is merely a stack of IOUs issued by the Treasury Department. The SSA says of these assets,

By law, income to the trust funds must be invested, on a daily basis, in securities guaranteed as to both principal and interest by the Federal government. All securities held by the trust funds are "special issues" of the United States Treasury. Such securities are available only to the trust funds.

There is no money in this fund. The government has spent every dime.

The Bailout

$14 Billion Up in Smoke

by eric peters

In Washington, they always try to announce unpleasantness during the off-hours (weekends, holidays and such) so that – hopefully – the stink will be less noticed.

In Detroit, too.

The recent announcement of the accession of Mary Barra as the new CEO of General Motors just happened to be exactly coincident with the announcement that the federal government has divested itself of its remaining partial ownership of GM.

This is good news.

The bad news – according to the Center for Automotive Research – is that $14 billion in taxpayer dollars went up in smoke as a result of the government’s “investment” in GM.

Now, this is supposedly mitigated by the recovery of GM – and the existence of all the associated jobs (and consumer spending and tax revenue) that would have disappeared had GM not been crash-carted by the federal government. That is, had the violence of the state not been used to forcibly compel ordinary Americans to subsidize the failure of a big corporation and thereby immunize it from the moral hazard (having to face up to the consequences of poor decisions) that face them – you and me – in the course of their ordinary, individual lives.

But it’s a false premise.

Why is it assumed that, had GM not been crash-carted, a zero-sum game would have ensued? Certainly, there were parts of GM that were sound. Had the corporation gone on the block, these worth-something parts would not have been thrown away. Do people throw away machine tools? Physical plants? Of course not. They are sold – and re-used.

Productively.

Consider the analogy of a guy who owns a car he can no longer afford to fix. Perhaps he is not competent to fix it. In any case, he realizes it is time for him to bow out – and hand the keys to someone who can fix it (or who can afford to have it fixed). The car is not thrown away because it needs a brake job (or even a new engine). A free exchange takes place – and both parties are benefited. The in-over-his-head former owner walks away from something he isn’t able to deal with – cash in hand, which he can use for other productive purposes. The new owner has less cash in hand, but holds title to a new (to him) car that he will repair and which, once repaired, will be of more value to him than the cash he parted with.

This analogy is simple, but it scales.

Little Kim does Pulp Fiction

In the name of revolution and the people

By Pepe Escobar 

"Despicable human scum." "Worse than a dog." A "traitor for all ages" who "perpetrated anti-party, counter-revolutionary factional acts in a bid to overthrow the leadership of our party and state and the socialist system." Fate: a swift military tribunal, and a swift execution "in the name of revolution and the people". 

So that was the date with destiny for Jang Song-thaek, 67, uncle of North Korea's leader Kim Jong-eun (arguably 30), according to state news agency KCNA. In North Korea, the revolution is definitely not a bulgogi party. 

KCNA maintains that Jang - married to Kim Kyong-hui, the very influential sister of the late Dear Leader Kim Jong-il - admitted he wanted to stage a military coup d'etat. The inevitable follow-up is - what else - a purge (at the Central Committee's administrative department). Who said all that Cold War shtick was over? 

Jang was, in theory, young Kim's Cardinal Richelieu. And then, out of the blue, he is shown on state TV dragged out of a meeting, publicly humiliated, demonized as a drug addict and womanizer, stripped of all posts and titles (chief of the Party's administrative department, vice chairman of the National Defense Commission), accused of corruption, tried and whacked, as if this was a North Korean Pulp Fiction remake. What gives? 

Re-educate or else

Let's see the reaction from the usual suspects. South Korean President Park Geun-hye said this is a "reign of terror". Japanese Defense Minister Itsunori Onodera said this is a remix of the Cultural Revolution in China. Beijing, demonstrating trademark restraint, called it just "an internal affair". 

The most obvious interpretation is Kim telling North Korea, the Korean peninsula and the world at large "I'm in charge. And don't you mess with me." 

Now for the details. Little Kim, since he acceded to the leader's throne, was already deep into a sequential reshuffle of especially the military nomenklatura (that's according to South Korea's Unification Ministry). The most probable scenario is that Jang's slow-motion purge started a few months ago. Or even before that, because Kim Il-sung and Kim Jong-il always suspected him of social (and especially political) climbing. Some of Jang's aides had already met the Pulp Fiction treatment, but his money manager is lucky enough to be in China, taken care of by the South Koreans. 

Make no mistake: Jang was very powerful and well connected. So powerful that the inevitable "re-education" campaign to follow - either you worship Kim or he'll go medieval - will not be that easy. 

Rich Don't Pay Most of the Taxes

They Pay All of Them

By MIKE SHEDLOCK

Counting transfer payments such as foods stamps, Medicaid, Medicare, and other government welfare, Congressional Budget Office (CBO) analysis shows the top 40% pay 106% of all taxes (more than all of them). In turn the bottom 60% get money back.

Please consider The rich do not pay the most taxes, they pay ALL the taxes by CNBC reporter Jane Wells.

Buried inside a Congressional Budget Office report this week was this nugget: when it comes to individual income taxes, the top 40 percent of wage earners in America pay 106 percent of the taxes. The bottom 40 percent...pay negative 9 percent.

The key table is in Box 1 on PDF page 11 (report page 7) of Distribution of Household Income and Taxes. The report was released in December 2013 but data is for 2010.

Key Facts

·         The bottom 20% had average income of $8,100 but received $22,700 in annual assistance, netting $30,800 in after-tax income.

·         The second quintile had average income of $30,700 but received $15,200 in annual assistance, netting $43,400 in after-tax income.

·         The middle quintile received a bit more than they paid out, with $2,600 in annual assistance to be precise.

That money had to come from somewhere, and it did.

·         The highest quintile paid $52,500 more in taxes each year than they got back.

·         The second-highest quintile paid $8,800 more in taxes each than they got back.

Wells concludes ...

Fair or not, I will let you be the judge. People who make more should pay more, generally speaking. In America, they are. Yes, the rich (and almost rich) are getting richer. When it comes to individual income taxes, they're also covering the entire bill. And leaving a tip.

The Geography of Aging

Why Millennials are headed to the Suburbs 

by Joel Kotkin

One supposed trend, much celebrated in the media, is that younger people are moving back to the city, and plan to stay there for the rest of their lives. Retirees are reportedly following suit.

Urban theorists such as Peter Katz have maintained that millennials (the generation born after 1983) show little interest in “returning to the cul-de-sacs of their teenage years.” Manhattanite Leigh Gallagher, author of the dismally predictable book The Death of Suburbs, asserts with certitude that “millennials hate the suburbs” and prefer more eco-friendly, singleton-dominated urban environments.

Green activists hope this parting of the ways between the new generation and the preferences of their parents will prove permanent. The environmental magazine Grist even envisions “a hero generation” that will escape the material trap of suburban living and work that engulfed their parents.

Less idealistic types, notably on Wall Street, see profit in this new order, hoping to capitalize on what Morgan Stanley’s Oliver Chang dubs a “rentership society”; in this scenario millennials remain serfs paying rent permanently to the investor class.

But a close look at migration data reveals that the reality is much more complex. The millennial “flight” from suburbia has not only been vastly overexaggerated, it fails to deal with what may best be seen as differences in preferences correlated with life stages.

We can tell this because we can follow the first group of millennials who are now entering their 30s, and it turns out that they are beginning, like preceding generations, to move to the suburbs.

We asked demographer Wendell Cox to crunch the latest demographic data for us to determine where people have moved by age cohort from 2007 to 2012. The data reveals the obvious: People do not maintain the same preferences all their lives; their needs change as they get older, have children and, finally, retire. Each stage leads them toward somewhat different geographies.

Bitcoins vs. Greenbacks and/or Precious Metals

A Reality Check

By Gary North

There are conflicting stories among Bitcoins' supporters about why a Japanese programmer or team of Japanese programmers, who are known by a pseudonym Satoshi Nakamoto, developed the original idea for the Bitcoins software.

The primary justification for Bitcoins among libertarians is the prediction that Bitcoins will become an alternative currency to all existing central bank currencies. Bitcoins are seen as a first-stage revolt against central bank money.

In this essay, I'm going to make a series of arguments. I'm going to tell you in advance what my arguments are. You can then judge whether or not I have been successful in presenting my case. Here are my arguments.

First, the primary benefit that libertarian promoters of Bitcoins offer in justification of their theory that Bitcoins will become an alternative currency is this one: Bitcoins offer privacy. Paper money today offers a much greater degree of privacy that Bitcoins do, plus a whole series of other major advantages that Bitcoins do not offer.

Second, money is the most marketable asset. Paper money is vastly more marketable than Bitcoins.

Third, gold-based and silver-based digital currencies are more likely to become future world digital currency than Bitcoins.

Fourth, most Americans do not want privacy in their exchanges. This is manifested by the fact that they do not use the form of currency in which privacy is easily available and totally legal: greenbacks.

I will compare the advantages of Bitcoins with the advantages of greenbacks. I will then compare the disadvantages of Bitcoins with the disadvantages of greenbacks. Then I will compare Bitcoins to digital currencies that are backed by either gold or silver.

1. PRIVACY

Here, I discuss the price of buying privacy.

Greenbacks. There are three ways that anyone with a bank account in the United States can obtain greenbacks. First, he can walk into his bank, fill out a request for greenbacks, hand it to the teller, and the teller will hand over a specific quantity of paper money. Second, he can drive up to a booth in the bank's parking lot, put a check into a tube, put the tube back into a reception box, and within a couple of minutes, the tube will come back with a specified amount of paper money in it. Third, an individual can walk over to an ATM machine, specify how many dollars he wants, run his bankcard through the machine, and will immediately receive his paper money.

The Expanding scandal of the Nobel peace prize

A modern definition of Peace

By Fredrik S Heffermehl 
OSLO - A March 2012 decision by the Swedish authority supervising foundations is a ticking box of dynamite under the Nobel Peace Prize. Even presented in an official, open document, the decision has not reached the general public and become the news story it actually is. 

The order implies that the decision to award the 2013 Nobel to the bureaucrats enforcing the ban on chemical weapons, the Organisation for the Prohibition of Chemical Weapons (OPCW), is illegal. 

It is true, as the citation of OPCW mentions, that disarmament was important to Alfred Nobel. But why is it the secretive committee's best-kept secret that Nobel's will included a recipe for a weapons-free world? 

Nobel did not believe in civilizing war, reducing a weapon here and an army there; he was quite specific when, in his 1895 will, he described a prize for "the champions of peace" seeking to abolish all weapons in all nations, as an alternative to militarism and military forces. With terms like the "brotherhood of [disarmed] nations", he used language that anyone familiar with the history of the peace movement will recognize. 

Even though its secretary is a historian, the Norwegian Nobel Committee chooses to ignore that the kind of recipients Nobel had in mind were the Austrian baroness Bertha von Suttner, author of the bestseller Lay Down Your Arms, and her political friends. 

In the last years of his life, Nobel joined Suttner's Society of Friends of Peace and gave substantial financial support to this Austrian society and the (still existing) International Peace Bureau, and - very important to understanding his purpose in setting up a peace prize - promised Suttner to "do something great" for her movement. 

Those Who Can't, Govern.

Don't just do something. Stand there.

by Mark Steyn
For much of last year, a standard trope of President Obama's speechwriters was that there were certain things only government could do. "That's how we built this country — together," he declared. "We constructed railroads and highways, the Hoover Dam and the Golden Gate Bridge. We did those things together." As some of us pointed out, for the cost of Obama's 2009 stimulus bill alone, you could have built 1,567 Golden Gate Bridges — or one mega–Golden Gate Bridge stretching from Boston to just off the coast of Ireland. Yet there isn't a single bridge, or a single dam ("You will never see another federal dam," his assistant secretary of the interior assured an audience of environmentalists). Across the land, there was not a thing for doting network correspondents in hard hats to stand in front of and say, "Obama built this."

Until now, that is. Obamacare is as close to a Hoover Dam as latter-day Big Government gets. Which is why its catastrophic launch is sobering even for those of us who've been saying for five years it would be a disaster. It's as if at the ribbon-cutting the Hoover Dam cracked open and washed away the dignitaries; as if the Golden Gate Bridge was opened to traffic with its central span missing; as if Apollo 11 had taken off for the moon but landed on Newfoundland. Obama didn't have to build a dam or a bridge or a spaceship, just a database and a website. This is his world, the guys he hangs with, the zeitgeist he surfs so dazzlingly, Apple and Google, apps and downloads. But his website's a sclerotic dump, and the database is a hacker's heaven, and all that's left is the remorseless snail mail of millions and millions of cancellation letters.

For the last half-century, Obama has simply had to be. Just being Obama was enough to waft him onwards and upwards: He was the Harvard Law Review president who never published a word, the community organizer who never organized a thing, the state legislator who voted present. And then one day came the day when it wasn't enough simply to be. For the first time in his life, he had to do. And it turns out he can't. He's not Steve Jobs or Bill Gates or Jeff Bezos. And Healthcare.gov is about what you'd expect if you nationalized a sixth of the economy and gave it to the Assistant Deputy Commissar of the Department of Paperwork and the Under-Regulator-General of the Bureau of Compliance.

The Economy of the Future

Posterity cannot vote against us, but we can vote against them.

BY JR NYQUIST

In Niall Ferguson’s book, The Great Degeneration: How Institutions Decay and Economies Die, he quotes one of my favorite passages from Edmund Burke’s Reflections on the Revolution in France where Burke explains that “one of the first and leading principles on which the commonwealth and the laws are consecrated is — that [people] should not think it among their rights to cut off the entail or commit waste on the inheritance [of posterity] by destroying at their pleasure the whole original fabric of their society, hazarding to leave those who come after them a ruin instead of an habitation….” Burke added that society is a partnership between the living, the dead, and the unborn. About this partnership Ferguson wrote, “In the enormous inter-generational transfers implied by current fiscal policies we see a shocking and perhaps unparalleled breach of precisely that partnership.”

Our economic future is now threatened by the government’s inability to control public spending. The developed world is going deeper and deeper into debt, sacrificing the future to the present. Already in the 1890s the Irish historian and political theorist William Edward Hartpole Lecky saw that increasing government taxation and expenditure was a trend which might eventually lead to bankruptcy on a massive scale. He believed government indebtedness was a serious and long-term threat to liberty and prosperity; for when a government borrows it is stealing from the future. Even worse, when such a theft is accomplished in the name of equality, warned Lecky, it only proves that “democratic tendencies are distinctly adverse to liberty.” Such a realization is unsettling, and we do not know how to fix what now seems broken.

If we return to Burke’s quotation, above, we today find that the partnership between the living, the dead, and the unborn has given way to the selfishness of the moment. The unborn have no vote and the U.S. Constitution never really protected posterity from the vagaries of the democratic present. Supposedly we are to feel a natural concern for the future, and this was to restrain our behavior. But our feelings for the future are clearly attenuated. Perhaps we don’t even believe that the future will come. But when it comes let us admit that the banks will be empty. Uncle Sam will be broke. Every taxpayer will be stripped bare. And why must this be? The answer is given at every election by our leading politicians. Social justice requires solutions now, regardless of the future cost; for everyone must have healthcare and every country in the Middle East must have democracy; and it’s all very expensive, of course, so we settle the bill on posterity.

Posterity cannot vote against us, but we can vote against them. If we were decent folk this would not happen. But we aren’t decent. Not any longer. Let us therefore eat up our inheritance and leave nothing for our children. Such is the logic of our system of government. Such is the logic of our governors – those great visionaries. The politics of our time is about arranging the economy in such a way that our children will pay. Who, after all, can stop us from doing this? We are determined. It is already largely accomplished. The system of the Founding Fathers, which was designed to limit the power of the government, has been subverted by a generation that wants everything for itself now.

Recent testimony before a Congressional Committee offers fascinating insight into the breakdown of limited government in America. Congressman Bob Goodlatte (R-VA) recently put a question to legal analyst and scholar Jonathan Turley: “How does the president’s unilateral modification of acts of Congress affect both the balance of power between the political branches and the liberty interests of the American people?”

Pope Francis: the new King of Italy

In a country with little faith in politics, the 'people's pontiff' has become Italy's de facto head of state.

By PATRICK WEST

Much has been written recently about how Pope Francis has become a new pin-up for progressives, anti-capitalists and those who feel that the US president, Barack Obama, has disappointed the poor and downtrodden. It’s an interesting turn of events for the papacy, a hierarchical institution that normally makes the headlines for the wrong reasons: paedophilia, clerical cover-ups and its unfashionable stance on women and homosexuality.

The ‘Austerity Pope’, who shuns the traditional opulence of the role, has certainly tapped into today’s spirit of banker-bashing, non-judgementalism and inclusion (even if many Catholics rather like a pope that pontificates), but another more curious development is afoot. This is that Francis has, in all but name, become Italy‘s new monarch. In a country where politicians are abhorred like nowhere else in Europe, he is the figure most Italians look up to for guidance, inspiration and leadership.

Pope Francis made the first state visit of his pontificate last month. He travelled two miles to Italy’s presidential palace, where he told President Giorgio Napolitano of his solidarity with Italy and the challenges it faces on immigration, poverty and hard-up families. Francis also recalled his visit to Lampedusa, the island off which more than 300 Eritrean refugees drowned in October.

The Pope’s intervention after that disaster – ‘Pope Francis says Lampedusa migrant boat disaster a “disgrace”’ read a headline in the Mirror – achieved far greater global coverage than President Napolitano’s. Indeed, the Pope’s visit had its direct parallel with the visit to Santiago di Compostela by King Carlos of Spain, following a train crash there in July. Providing comfort and hope is what heads of state do, and it’s what Pope Francis basically does for Italians.

The Right to Our Own language

For $100K, You Would At Least Think That College Grads Could Write

By George Leef

Suppose you sent your daughter to a music camp—an expensive camp lasting months. She had said that she wanted to learn the violin, so you bought her a nice one and sent her off to camp.

Upon her return, you ask how the camp was and she replies, “Great! We studied lots of stuff about music and the violin.” Then you ask her to play something.

“Well, we didn’t play much and I still don’t know how to tune my instrument. But it was still a terrific experience!”

You would probably think that a music camp ought to concentrate on essentials first—tuning, scales, simple pieces—before moving on to music theory, music history, conducting technique, and so on.

For many American students, college is like that music camp. They take lots of courses and study lots of stuff (or at least seem to), but don’t even learn how to use the English language well. You might think that would be a top priority, but actually it’s not a priority at all.

A recent CNBC article, “Why Johnny can’t write, and why employers are mad” puts a spotlight on this remarkable omission. Companies are trying to fill many job openings but find that hard, even with lots of un- and under-employed college graduates looking for work. “Often,” writes author Kelley Holland, ”the mismatch results from applicants’ inadequate communication skills. In survey after survey, employers are complaining about job candidates’ inability to speak and write clearly.”

She quotes Brandeis University professor William Ellet, who says that the neglect of writing starts early in school and often continues straight through college: “Nobody takes responsibility for writing instruction.”

From personal experience, I can attest that he’s correct. Many students enter college with amazingly poor writing ability, owing to the fact that no one paid much attention to their writing while they were in their K-12 years. Once I had a student come to my office with her test in hand, a test on which she had scored very poorly on all three of the essay questions. “But I never had to write essay answers before,” she complained. Throughout her previous years of schooling, she had taken almost nothing but true-false and multiple-choice tests.

Changes in South African Inequality During Mandela’s Life

Income disparity in South Africa is larger now than under Apartheid

BY MARC CHANDLER

This Great Graphic shows how the average income and population by racial group changed during the life of Nelson Mandela. It comes from The Economist.

It illustrates a sad fact. Income disparity in South Africa is larger now than under Apartheid.

There have been joint and distributional gains since the end of Apartheid. The distributional gains have gone disproportionately to white and Asian South Africans.

Economically, the challenge is not racism per se, but governing issues, education quality and a skills shortage among South African blacks. Black empowerment has been modest and appears to be limited to a relatively small group that is politically connected.

Sadly, South Africa, post-Apartheid, is among the most unequal countries in the world. It may be beyond the ability of the one-party rule of the African National Congress, with its weak leadership, cronyism, and rent-seeking incentives. 

Why the Jews left their Arab lands

Jews who had been present in Arab Muslim countries for a 1,000 years were squeezed out in the span of one generation

By David Bensoussan 

There has been a Jewish presence in Arab-Muslim countries since well before Islam was introduced and it dates back to before the 6th century before the current era. These communities have disappeared or are in the process of disappearing in the majority of Arab-Muslim countries. In fact, 865,000 Jews found themselves excluded in the very countries they were born in and felt that they had to leave. [1,2] 

The traditional legal status of non-Muslims in Muslim countries
Non-Muslim minorities in Muslim countries have the status of dhimmi, which means "tolerated" or "protected". This flows from the assertion that Jewish and Christian scripture was distorted by their unworthy depositories. It is legislated under the Pact of Umar which was amended several times with the addition of other discriminatory measures. 

A dhimmi is in an inferior position within Muslim society: they have special taxes, wear recognizable clothing, are the subject of humiliating measures, and do not have legal status when they are involved in a legal matter involving Muslims. Shi'ite Islam considers Jews to be a source of impurity. While the conditions of Jews have differed between countries, some features overlap for Jews in Morocco, and in the Ottoman and Persian Empires. 

In the 19th century, several travellers, consuls and educators, sent out by the Alliance Israelite Universelle, sent back alarming reports on the situation of Jews, including the following: daily humiliation, objects of scorn, submissive to the point of atrophy, constant insecurity, abductions, densely populated Jewish quarters, dramatic impoverishment and seriously unsanitary living conditions. They described nightmarish fanaticism on the one hand and resignation on the other.   

The difficult circumstances of Jews, who made up 0.5% to 3% of the population, depending on the country, was also raised by Muslim chroniclers. Jews automatically became the scapegoats whenever there was political instability, a military defeat or difficult economic conditions, as well as drought. Massacres and plundering happened on a regular basis. [3] 

Putin the Perónist

Will Putinism survive Putin?

by NINA L. KHRUSHCHEVA

Russian President Vladimir Putin has been compared to many strongmen of the past – Joseph Stalin, Leonid Brezhnev, and Chile’s Augusto Pinochet, to name a few. But, after nearly 14 years in power, perhaps the best comparison now may be a transgender cross between the former Argentine leader Juan Perón and his legendary wife, Eva (“Evita”).

In the early 1940’s, Colonel Perón, as Minister of Labor and Secretary of War, was a “gray cardinal” to Argentina’s rulers. Before communism collapsed in 1989, Colonel Putin, also memorably gray, was a devoted KGB operative, entrusted with spreading disinformation and recruiting Soviet and foreign agents in East Germany.

At the labor ministry, Perón initiated social reforms, including welfare benefits for the poor. Although his motivation, at least in part, may have been a desire for social justice, Perón was, in effect, bribing the beneficiaries to support his own rise to power and wealth. With his beautiful and outspoken wife – a “woman of the people” – at his side, Perón was able to persuade voters in 1946 that, as President, he would fundamentally change the country.

He was as good as his word. Perón’s government nationalized banks and railroads, increased the minimum wage and improved living standards, reduced the national debt (for a while at least), and revived the economy. Argentina became less reliant on foreign trade, though the move toward autarky eventually undermined growth, causing the country to lose its position among the world’s richest.

During this period, Perón also undermined freedom of speech, fair elections, and other essential aspects of democracy. He and his emotional wife spoke publicly against bourgeois injustices and luxury, while secretly amassing a private fortune. Finally, Perón was ousted in 1955, three years after the death of Evita, his greatest propagandist.

Green Power Gridlock

Why Renewable Energy Is No Alternative

By Larry Bell

Since just about everything we do and the equipment needed to support it depends upon a source of energy, wouldn’t it be great if someone would invent perpetual motion machines that  can  generate all we want without consuming any resources or producing pollution? Okay, some of you are doubtless saying: 

“Yes, and they already exist. There are wind turbines and solar power systems that can do that if we build enough of them.”

Sorry…but it just isn’t that easy.

First of all, without reversing progress back to the Stone Age (and even then, remember those smoky caves), we couldn’t create adequate numbers of either or both  to accommodate modern power demands regardless how much conservation we practiced. One constraint is suitable land area. There simply aren’t enough appropriate wind and solar site locations to make that happen. Another limitation is power supply unreliability. For example, recharging those nifty plug-in electric cars would present a big problem when the wind isn’t blowing, at night and when it’s cloudy.

There are also such unfortunate matters to consider as high development and operations costs, low output efficiencies, and the fact that environmental groups and near-by landowners fight them tooth-and-nail in the courts.

I’ve discussed all of these issues at some length in other articles, and won’t dwell on them again here.  Instead, let’s revisit that previously-mentioned output reliability limitation on renewable power dependence alone, and just hypothetically imagine that installations and outputs will be pretty much limitless.

In other words, contemplate renewable energy (wind + solar) as true power source “alternatives” to fossils, nuclear and hydro which currently provide more than 96 percent of all U.S. electricity. Only about 3.4 percent now comes from wind, and about 0.11 percent from solar.

Grid Balancing On a High Wire:

Managing the uninterrupted transfer of electrical power from myriad sources wherever and whenever it is needed is a hugely complicated challenge. It’s one thing when the principal supply sources use gas, heat or hydraulically-driven turbines which provide constant, unfluctuating outputs that can be adjusted and counted upon independent of weather or season.

The Liberty of Addiction

Troubled Spirits and Weak Flesh

by Theodore Dalrymple        

Celebrities do not interest me, in part because I often do not know who they are. Not having had a television for forty years, and having survived quite happily without one, people apparently world famous are to me completely unknown, either by sight or sound; while those figures whom I consider important are often comparatively obscure and unknown to millions. I count myself lucky: there is evidence that those who interest themselves in the lives and doings of celebrities are unhappier than those who do not, though in which direction the causative relationship, if any, lies I cannot be certain.

However in the modern world, unless you are a complete hermit, celebrities, or rather news about celebrities, will come to you regardless of your wishes or interest. And even I, who have neither radio nor television, could not altogether avoid some knowledge of the current trial in England of two Italian sisters, former servants of Charles Saatchi and Nigella Lawson, who are accused of having defrauded the couple of $1 million by the unauthorized use of the couple’s credit cards.

Mr Saatchi was an advertising magnate, now art collector and dealer, and his wife is a famous television cook and author of best-selling cookery books. Evidently they lived in a world in which $1 million can go missing without anyone really noticing.

The defense case of the two accused is that Nigella Lawson knew and approved of their use of the credit cards, on condition that they did not tell her husband of her use of cocaine, which they claim was heavy and persistent. She spent several hours in the witness box being examined by the lawyer for prosecution and cross-examined by the lawyers for the defense.

One of the latter asked her whether she has ‘a drug problem,’ to which she replied that she had ‘a life problem.’ The lawyer asked her whether that is what she wanted to say under oath, to which she replied that it was.

I am glad that she stuck to her guns, for to have admitted that she had ‘a drug problem’ would have been to imply that the problem was with the drug rather than with the person taking it (or them). And this would have been to get everything exactly the wrong way round. It is not the drug that takes the person but the person that takes the drug. Therefore Nigella Lawson was being absolutely honest when she said she had a life and not a drug problem.