Hubris calls for nemesis, and in one form or another it's going to get it

Uttin’ On the Itz

By Ben Hunt, Ph.D.

High hats and arrowed collars, white spats and lots of dollars
Spending every dime, for a wonderful time
If you're blue and you don't know where to go to
Why don't you go where fashion sits,
Puttin' on the Ritz.
– Irving Berlin

Hegel remarks somewhere that all great, world-historical facts and personages occur, as it were, twice. He has forgotten to add: the first time as tragedy, the second as farce.
– Karl Marx

I never could bear the idea of anyone expecting something from me. It always made me want to do just the opposite.
– Jean-Paul Sartre, “No Exit”

Every time I hear a political speech or I read those of our leaders, I am horrified at having, for years, heard nothing which sounded human.
– Albert Camus

The structure of a play is always the story of how the birds came home to roost.
– Arthur Miller

In Young Frankenstein, Mel Brooks and Gene Wilder brilliantly reformulate Mary Shelley’s Frankenstein; or, The Modern Prometheus, a tragedy in the classic sense, as farce. The narrative crux of the Brooks/Wilder movie is Dr. Frankenstein’s demonstration of his creation to an audience of scientists – not with some clinical presentation, but by both Doctor and Monster donning top hats and tuxedos to perform “Puttin’ on the Ritz” in true vaudevillian style. The audience is dazzled at first, but the cheers turn to boos when the Monster is unable to stay in tune, bellowing out “UTTIN ON THE IIIITZ!” and dancing frantically. Pelted with rotten tomatoes, the Monster flees the stage and embarks on a doomed rampage.

Wilder’s Frankenstein accomplishes an amazing feat – he creates life! – but then he uses that fantastic gift to put on a show. So, too, with QE. These policies saved the world in early 2009. Now they are a farce, a show put on by well-meaning scientists who have never worked a day outside government or academia, who have zero intuition for, knowledge of, or experience with the consequences of their experiments.

Two things happened this week with the FOMC announcement and subsequent press conferences by Bernanke, Bullard, etc. – one procedural and one structural. The procedural event was the intentional injection of ambiguity into Fed communications. As I’ll describe below, this is an even greater policy mistake that the initial “Puttin’ on the Ritz” show Bernanke produced at the June FOMC meeting when “tapering” first entered our collective vocabulary. The structural event ... which is far more important, far more long-lasting, and just plain sad ... is the culmination of the bureaucratic capture of the Federal Reserve, not by the banking industry which it regulates, but by academic economists and acolytes of government paternalism. These are true-believers in too-clever-by-half academic theories such as management of forward expectations and in the soft authoritarianism of Mandarin rule. They are certain that they have both a duty and an ability to regulate the global economy in the best interests of the rest of us poor benighted souls. Anyone else remember “The Committee to Save the World” (Feb. 1999)? The hubris levels of current Fed and Treasury leaders make Rubin, Greenspan, and Summers seem almost humble in comparison, as hard as that may be to believe. The difference is that the guys on the left operated in the real world, where usually you were right but sometimes you were wrong in a clearly demonstrable fashion. A professional academic like Bernanke or Yellen has never been wrong. Published papers and books are not held accountable because nothing is riding on them, and this internal assumption of intellectual infallibility follows wherever they go. As a former cleric in this Church, I know wherefore I speak.

The Abolition of the Playground

How Regulation Stifles Spontaneous Order and Play

by JEFFREY A. TUCKER

The Bobcat tractor was working its way through a pile of mulch as big as an office building, dragging it from the alley to the playground of a private daycare facility. I asked the crew foreman about the sheer vastness of this mulch pile.

“It’s about the state regulations. There has to be 8 inches of this stuff underneath every play structure.”

“The State regulates even things like this?” I asked. 

“The regulations on playgrounds are 15 miles long,” he said. “They mandate every fastener and bolt, the distance and height of every structure, and, especially, the drainage. Just getting the drainage right takes up most of the time and money.”

“But don’t these regulations inhibit others from opening daycare facilities?” I asked. “You would have to be super-well capitalized just to get one going.”

“I can tell you this. I would never do it.”

Hmm. Maybe stifling regulations partially account for the shortage of childcare facilities, the high prices of tuition to put your child in them, and the constant political pressure for the government to provide more preschool solutions for parents.

But where do these regulations come from? Of course the safety Nazis have never met a regulation they didn’t like, but I’m willing to bet they weren’t responsible for a regulatory panoply that extends way beyond safety concerns. The real origin of these regulations stems from the largest providers, who have every incentive to lock out new entrants and make sure every project they land is pricey. 

The higher the barriers to entry, the easier life is for the established firms. 

The whole scene confirmed all my worst fears. There should be something sacrosanct about the playground. It should be off limits to regimentation and central dictate. And yet the simplified federal manual about every aspect of the playground is 60 pages long, every paragraph presuming that without such guidelines the rest of us would be completely clueless and uncaring about the well-being of children. 

Free Immigrants, Free Capital, Free Markets

Instead of lamenting immigrants we should be welcoming them, especially the low-skilled ones

by David Howden

Early this year, the Saudi Arabian government decided to crack down on foreign workers. Writing for The Globe and Mail, Martin Dokoupil and Marwa Rashad argue that this will lead to a “stronger, more diverse economy.” In particular, they focus on the plethora of businesses open at the moment — more than they think is necessary — and the resultant reduction in both “unnecessary” labor and businesses that would be possible if these foreign workers were forced to leave.

The immigration debate, whether it occurs in Saudi Arabia, the United States, or even Canada, really boils down to answering a simple question: Do we want to import workers or goods?

Like money, workers go (when able) to the place that treats them best. Oftentimes this is where real wages are highest. Real in this sense means “cost-adjusted,” so that a worker making a low wage in a low-cost country (say Mexico) may actually have a higher standard of living than one working at a high-wage job in a high-cost country (perhaps Switzerland).

There is an enduring tendency for profits to equalize across all businesses as entrepreneurs move to exploit opportunities. The same holds true for real wages. As workers move from lower to higher real-wage areas there is the same equilibrating tendency. The relative removal of supply from the low-wage country will place upward pressure on the wages of the remaining workers. The influx of new workers to the higher-wage country functions in the opposite direction — wages begin to depress as a result of the increase in relative labor supply.

Worshipping the Wrong Goddess

Democracy and Liberty Don't Necessarily Go Together

by B.K. MARCUS

The crowd in Tiananmen Square was losing hope. Their mass protest had drawn throngs of students at first, but as the summer of 1989 approached, their numbers were dwindling, their leaders were resigning, and the square itself, according to one historian of China’s democracy movement, "had degenerated into a shantytown, strewn with litter and permeated by the stench of garbage and overflowing portable toilets."

The democracy movement seemed to be dying, not with a bang, but with a whimper.

This was before most of us in the West had ever heard of Tiananmen Square. What turned the protest around? Why did hundreds of thousands of supporters pack the square in the final days of May? What made the government, which had been ignoring the protest and refusing to offer any reforms, suddenly sit up and take notice—and send in tanks?

A lady with a torch.

To American eyes, she looked like a Chinese version of the Statue of Liberty, her torch of freedom held aloft over Tiananmen’s huddled masses. The art students who had quickly assembled the foam statue over a bamboo scaffolding  had deliberately avoided creating something that seemed "too openly pro-American"—even basing the style on the Cold War art of the Soviet socialist realists—but even with her Chinese features and a two-handed grip on the torch, the comparison with Lady Liberty was unavoidable.

But while the statue in New York Harbor represents Libertas, the Roman goddess of freedom, the protestors in Tiananmen Square were worshipping a different deity. They called their statue the Goddess of Democracy. 

The tanks rolled in and crushed the goddess beneath their treads, but her symbolic power remains, and her likeness now appears in the form of commemorative statues throughout the world. 

The authoritarian state may have won the battle, but the war for freedom lasts longer than our history textbooks would have us believe. In England and America, we had more than a century of struggles between liberty and power before anything like a victory could be declared for our cause. It took more than a piece of paper—more than the Declaration of Independence or the Treaty of Paris. And for years the words and symbols of liberty and independence inspired generations of freedom fighters, not just the ones we call the Founding Fathers.

But did the symbols ever unite us? Americans may look at the unifying force of the Goddess of Democracy and long for a time when our own symbols had the power to inspire our passion and our courage, but colonial America was never united on the cause of independence. About a fifth of the white population was loyal to the British Crown, with twice as many keeping their heads down and avoiding any openly held position on the question of independence. That puts the American Revolutionaries in the minority. And even among those who actively supported America’s secession from the empire, there was a deep philosophical divide about the goals of such a fight.

Turkey goes for Chinese take-away defense

Turkey's name on the NATO membership rolls should include an asterisk denoting its special status

By Peter Lee
On September 26, 2013, Turkey made the rather eyebrow-raising decision to put its long range missile defense eggs in a Chinese basket, announcing it had awarded a US$3 billion contract to the People's Republic of China for its truck-mounted "shoot and scoot" FD-2000 system. 

The Chinese FD-2000 is based on the Hong Qi missile, which has been around since the 1990s. The FD-2000 is an export version of the HQ-9 that appeared in 2009 and is marketed as a next-generation improvement on the Russian S-300 system, but whose fire control radar looks more like the radar matching US-based Raytheon's Patriot missile system (with the implication that the PRC filched the technology, maybe with some help from Israel). [1] 

Defense correspondent Wendell Minick relayed the description of the FD-2000 that China provided at a 2010 Asian arms show:

It can target cruise missiles (7-24 km), air-to-ground missiles (7-50 km), aircraft (7-125 km), precision-guided bombs and tactical ballistic missiles (7-25 km). "FD-2000 is mainly provided for air force and air defense force for asset air defense to protect core political, military and economic targets," according to the brochure of China Precision Machinery Import and Export Corporation (CPMIEC), the manufacturer of the system. It can also coordinate with other air defense systems to "form a multi-layer air defense system for regional air defense." [2]

Turkey is procuring 12 of these systems (it had originally requested 20 Patriot systems when Syria heated up and got six for a year, since renewed).

The FD-2000 looks great on paper. However, it appears to be untested in combat - and even the Patriot system is apparently not effective against cruise missiles, implying that the Chinese system isn't going to do any better. Political issues aside - and there were a lot of political issues - the deciding factor for Turkey was probably low price, and China's willingness to do co-production and technology transfer. 

Maybe the Chinese government are eager to put the FD-2000 in some foreign hot spot in the hopes of getting some real, battlefield data and make some upgrades before the cruise missiles start flying toward Beijing. [3] 

Press reports from June already implied that Turkey was leaning toward the Chinese system. However, Turkey's announcement in the midst of the Syrian chemical weapons negotiations still looks like a slap at the United States, which makes the Patriot missile system, and the North Atlantic Treaty Organization, which is now manning six Patriot batteries at present installed in Turkey. [4] 

Worse Is the New Normal

No turbulence left in America

By Mark Steyn

A few years ago, after the publication of my book America Alone, an exasperated reader wrote to advise me to lighten up, on the grounds that “we’re rich enough to be stupid.” That’s to say, Western democracies and their citizens are the wealthiest societies ever known, and no matter how much of our energies are wasted on pointless hyper-regulation for the business class and multigenerational welfare for the dependency class and Transgender and Colonialism Studies for our glittering youth, we can afford it, and the central fact of our wealth will ensure that our fortunes do not change. Since the collapse of Lehman Brothers in 2008, we have been less rich, and our stupidity ought in theory to be less affordable. Instead, it’s been supersized. To take only the most obvious example, President Obama has added six-and-a-half trillion bucks to the national debt, and has nothing to show for it. As Churchill would say, had his bust not been bounced from the Oval Office, never in the field of human spending has so much been owed by so many for so little.

The West’s rivals do not think like this. China is now the second-biggest economy on the planet, but it has immense structural problems: As I’ve been saying for years, it will get old before it gets rich. Thanks to its grotesque “one-child” policy, it has the most male-heavy demographic cohort in history — no chicks and millions of guys who can’t get any action, which is not normally a recipe for social stability. Despite being extremely large, the country is resource-poor. But you can’t say it’s not thinking outside the box. The Daily Telegraph in London reported this week that the Chinese have just signed a deal to lease five percent of Ukraine (or an area about the size of Belgium) to grow crops and raise pigs on. And I’d doubt it will stop with post-Soviet republics on the Euro-fringe: It’s not impossible to imagine China buying, say, the Greek islands. Beijing thinks the half-millennium blip of Euro-American dominance is coming to an end and the world is returning to its natural state of Chinese preeminence. The West assumes it can endure as a kind of upscale boutique unaffected by the changes beyond. Like, say, the frozen-yogurt shop at the Westgate mall in Nairobi — until last weekend.

China’s Ukraine deal may sound kinda wacky, but the People’s Republic consumes about 20 percent of the world’s food yet has (thanks to rapid industrialization) only 9 percent of its farmland. As Big Government solutions go, renting 5 percent of a sovereign nation to use as your vegetable garden and pig farm is a comparatively straightforward answer to the problem at hand. By contrast, try explaining American “health” “care” “reform” to the Chinese: You could rent the entire Ukraine for about 3 percent of the cost of Obamacare, and what does it solve? My colleague Michelle Malkin revealed this week that her family has now joined the massed ranks of Obamacare victims: Anthem Blue Cross Blue Shield sent her a “Dear John” letter explaining why they’d be seeing less of each other. “To meet the requirements of the new laws, your current plan can no longer be continued beyond your 2014 renewal date.”

Beyond the president’s characteristically breezy lie that “if you like your health-care plan, you will be able to keep your health-care plan” is the sheer nuttiness of what’s happening. For years, Europeans and “progressive” Americans have raged at the immorality of the U.S. medical system: All those millions with no health coverage! But Michelle Malkin had coverage and suddenly, under what Obama calls “universal health care,” she doesn’t. The CBO’s most recent calculations estimate that in 2023, a decade after the implementation of Obamacare, there will still be over 30 million people uninsured — or about the population of Canada. That doesn’t sound terribly “universal,” and I would bet it’s something of a low-ball figure: As many employers are discovering, one of the simplest ways “to meet the requirements of the new laws” and still stay just about solvent is to shift your workers from family plans to individual plans, and tell their spouses and children to go look elsewhere. Does it achieve its other goal of “containing costs,” already higher than anywhere else? No. Avik Roy reports in Forbes that Obamacare will increase individual-market premiums by 62 percent for women, 99 percent for men. In America, “insuring” against disaster now costs more than you’d pay in most countries for disaster.

Thinking Outside the Circle

Political spectra are often designed to make a “center” appear reasonable

by SANDY IKEDA

A circle is sometimes a useful image, but not in the way it’s often used to depict the political spectrum. Above is an example I found on the Internet of what I’m referring to.

You’ve got the Left and the Right at opposite sides of the circle such that, as you move to down and to the left from the Right and down and to the right from the Left—that is, away from their propensities—you end up at a kind of equilibrium point between the two. But moving up and to the left from the Right or up and to the right from the Left, you not only wind up farther from the reasonable “center” but at—gasp—unstable anarchy!

I learned this metaphor in high school. The lesson as I recall was something like “all extremes will eventually meet,” so the reasonable place to be is at the moderate “center.” The metaphor’s continued use reflects a continuing muddle in political discourse, especially in the mainstream media.

Does a Circle Have a “Right” or “Left” Side?

I saw a good specimen of such “circular thinking” on television when Edward Snowden, via Glenn Greenwald, revealed that an arm of the U.S. government, the National Security Agency, has been tracking foreign and domestic emails and phone conversations. Remember? It happened before the distraction of the President’s let’s-please-bomb-Syria campaign. (And while we’re at it, let’s remind ourselves of the abuses earlier this year of the Internal Revenue Service.) 

Now, I watch MSNBC about as much I watch Fox News (i.e., almost never) because of the particularly dismal (and usually loud) level of discourse on both channels. Not long ago, a paid “political expert” on the former remarked how puzzling it was that “libertarians,” whom he described as representing "the extreme right wing" of the political spectrum, were making common cause with the "Left" on the Snowden affair.

(Apologies for all the scare quotes in this column, but these terms are used so loosely in political blather that it’s dangerous to take them at face value.)

For that commentator the paradox emerged not so much from the fact that both progressives (at least some of them) and libertarians were upset about the breathtaking, unprecedented, and ongoing NSA violations of our civil liberties. The circle metaphor does after all put extreme Left and Right on the same spot. No, the mystery lay in the metaphor itself: It describes the situation without providing any underlying logic. What is it exactly that’s being measured around the circle? Apparently the point is simply to characterize “the center” as a reasonable ideological point of balance.

Means Versus Ends

I’m not sure that a single image can capture all of the important factors that go into locating a particular doctrine with respect to others. For instance, while socialism and fascism share political means, they each have different political ends. Moreover, look at how many varieties of socialism there are! That goes for fascism and capitalism, too.

I do think, though, that a political/doctrinal spectrum that looks at a single relevant dimension can clear up a lot of confusion. Although not his idea, Hayek put it well in The Road to Serfdom: 

Merkel's Awful Election Blunder

Without breaking a sweat, Merkel could have brought her grateful Free Democrats across the five percent hurdle

By Paul Roderick Gregory

The German and world press universally laud Angela Merkel’s election triumph in the German parliamentary elections. She has won (not 100% sure) a third term and she fell only three seats short of the holy grail of German politics – the absolute majority. Pundits say she won because German voters like her slow but steady decision making and her down-to-earth style. Few have pointed out that her election victory has been marred by a huge electoral blunder.

Josef Joffe (Angela Merkel’s Gilded Status Quo) points out that, having fallen short of an absolute majority, Merkel faces a daunting task in putting together a coalition government. The Social Democrats are loathe to enter another Grand Coalition, where they again risk losing votes from their base. The Greens must decide whether they are a grown-up and not one-issue party. Both Social Democrats and Greens will demand high prices for entering into a coalition with Merkel. She must sign on to their favorite issues or they won’t play along. They can always threaten to swallow their pride and form a government with the despised Left (die Linke).

Merkel could have easily avoided this electoral disaster by giving her junior coalition partners, the Free Democrats, or Liberals as they are known, a minor boost. She could have campaigned with them jointly, which would have transferred some of her electoral clout to them. On election eve, she could have issued veiled appeals to her backers to cast their second ballots (German election laws give voters two ballots) for the Free Democrats. But no. In the run-up to the election, she issued a clear call for her supporters to cast all their ballots for her party. Without breaking a sweat, Merkel could have brought her grateful Free Democrats across the five percent hurdle. Merkel would then have been free to form a coalition that would have agreed to her platform without a blink of the eye.

Why would a careful politician like Merkel make such a blunder? Perhaps the lure of the absolute majority was too great. She clearly underestimated the appeal of the anti-Euro  party (which also narrowly missed the five percent hurdle). But she went ahead and took the risk, and missed out on the coalition, which historically has ruled Germany well.

As Merkel goes about the difficult business of wooing reluctant coalition partners, the magnitude of her blunder will become apparent to the German and world press. 

How the West Destroyed Iraq

The bloody mess created by the occupation of Iraq was built on the West's own weakness and incoherence

By Tara McCormack

There has been considerable media focus recently on Syria and Egypt. Yet 10 years on from the invasion of Iraq, and two years after the official withdrawal of American troops (hundreds of thousands of private military contractors remain), the violence in Iraq is on-going. This year, the violence has been rising again. Earlier this month, several car bombs in Baghdad killed at least 25 people and wounded hundreds of others.

The intervention and occupation of Iraq ended a period during which intervention in other countries had won wide support among the political elites in Western states. During the 1990s, advocates argued that the post-Cold War order offered an opportunity for powerful states to act as a force for good in the world. Kosovo, arguably the high point (or low point, depending upon one’s political position) of humanitarian intervention was, as Tony Blair argued in his 1999 Chicago Speech, a war for values, not interests. The intervention in Iraq seemed to tarnish humanitarian intervention. Even those who had cheered as the bombs rained down upon Serbia in 1999, such as Jurgen Habermas and Gareth Evans, argued that Iraq was not a good intervention.

As David Clark, a key author of the UK’s so-called ‘ethical foreign policy’, has argued, the Iraq war had sown doubt about the legitimacy and efficacy of Western military power: ‘In departing from the principle of non-intervention and lacking a UN mandate, Kosovo is often regarded as the original sin that made Iraq possible. Even Russia’s invasion and recognition of Abkhazia and South Ossetia have been characterised as blowback from Kosovo’s declaration of independence a few months before. Comparisons of this kind confuse more than they clarify. The war in Kosovo was a response to a humanitarian emergency, not a geopolitical power play.’

Advocates of humanitarian intervention criticise the Iraq invasion on the basis that is was driven by material interests rather than values or the wish to liberate or save the people. Recently, the intervention in Libya, presented as an altruistic act, has to some extent rehabilitated the interventionist creed. Thus the intervention discussion is to a large extent framed in terms of a debate about whether intervention can ever be ‘pure’ or good.

Toby Dodge of the London School of Economics, who has been writing about Iraq for many years, has written an insightful book about the consequences of the Iraq invasion and occupation and what the future holds for Iraq. Iraq, From War to a New Authoritarianism is an important contribution to the debate about intervention and also for thinking about the nature of the Iraq conflict. As Dodge rightly concludes, what has happened in and to Iraq raises fundamental questions about the very capacity of external powers to change politics and economics in a society. In the context of demands to intervene in Syria, such questions need to be raised again and again. It is simply a cop-out by intervention advocates to suggest that the problem with Iraq is that it was not done with ‘pure’ intentions. In fact, as I will suggest below, this misunderstands what happened in Iraq.

Drawing upon literature about civil wars, Dodge uses three factors as a framework to understand civil conflict: ideological trends within a society that encourage the non-state use of violence; the weakness of the state’s administrative and coercive institutions; and the nature of the constitutional settlement structures and politics. Dodge looks in great detail at these factors in Iraq and finally considers the extent to which these have been overcome.

The victory of mumsy Merkel speaks to the infantilisation of European politics.

Mummy, please look after us

By Bruno Waterfield

In last weekend’s German elections, Angela Merkel’s Christian Democratic Union achieved its best result in 19 years, a victory which confirmed Merkel as German chancellor for a third term. The Christian Democrats fell just short of an absolute majority, but Merkel nonetheless destroyed the opposition, with the Social Democrats suffering their second worst result in history. (Their worst was in 2009, after being in coalition with Merkel.)

The election result may be a triumph for Merkel, and a vindication of the idea that ‘mummy will take care of it’, but the result bodes ill generally. That’s because it puts Germany in the vanguard of a pan-European flight from reality, one in which Europe’s governing elites attempt to avoid making the decisions necessary at this time of crisis.

Merkel personifies this trend. She combines a ruthless instinct for political survival with suffocating risk-aversion masquerading as canny pragmatism. The cult surrounding Merkel elevates the worst aspects of the contemporary political character while encouraging a woman, who is a very impressive operator, to employ her Machiavellian skills to avoid leadership and duck challenges, rather than engage with the real problems faced by German society.

What started off as a nickname, mutti or mummy, was intended by Merkel’s rivals to undermine her among the German Christian Democrats. But she has turned the ‘mummy’ moniker to her advantage. It is now her brand in a campaign that drove home the message of care and caution, complete with election posters showing her trademark clasped hands – a symbol of safety and a conflict-free maternal embrace. As the Wall Street Journal reports: ‘In a play on Merkel’s unofficial nickname – “Mutti” or “Mom” – her party’s youth organisation touts the slogan “Mutti Macht’s,” or loosely, “Mom will take care of it”.’

Merkel personifies the desire to duck responsibility, to leave it to someone else. As one German political pundit told the BBC: ‘Your mummy is always there for you. She doesn’t care what she looks like, but you can rely on her. Sometimes she might tell you to clean up your room but she’s always there for you.’

As Sabine Beppler-Spahl has observed on spiked, the building of the Merkel cult is based on a turn away from politics and the stigmatisation of political conflict as destabilising or dangerous. Merkel deliberately eschews vision because it leads to conflict. Little wonder that many commentators have noted that no one really knows what Merkel’s political agenda is.

The State As An Attractor for Sociopaths

War is an end in itself, and it matters little who is chosen as the enemy of the year

By Butler Shaffer

What the government is good at is collecting taxes, taking away your freedoms and killing people. It’s not good at much else.

                      -   Tom Clancy

In the science of chaos, “attractors” are operational principles around which turbulence and apparent chaos are harmonized. What the limited nature of our prior experiences dismisses as randomness or disorder, the study of chaos and complexity is revealing as deeper patterns of regularity. Attractors help to identify the dynamics by which complex systems organize themselves. Thus, it could be said that an earthquake fault line serves as an “attractor” for geologic forces in plate tectonics, just as river systems are attractors for water engaging in its ongoing relations with the forces of gravity. At a social level, an estate sale can be seen as an attractor for antique dealers; dumpsites as attractors for abandoned property; or hospitals as attractors for diseases. In marketplace economics, the pricing system is an attractor for buyers and sellers seeking to exchange property claims.

The study of chaos is helping us understand why all political systems are disruptive and destructive of life processes. Through this new science, we are discovering – contrary to Plato’s hubristic assumptions – that complex systems produce behavior that is bothdetermined and yet unpredictable. Left to the playing out of the forces operating within and upon it, a complex system will spontaneously generate consequences that are implicit – albeit unpredictable – within it.

But we know that many people do not like a world that is unpredictable and indifferent to their particular interests. Thus, a business owner who is unable to effectively compete for customers in a free market, may seek to disrupt the order that does not accommodate his whims. He might begin by pursuing voluntary agreements with his competitors to reduce the pace with which they pursue their respective interests, a strategy that is rarely successful. When the voluntary approach doesn’t satisfy all industry members, he and many of his business rivals turn to the state to compel, by force, results unobtainable in the marketplace. My book, In Restraint of Trade: The Business Campaign Against Competition, 1918-1938, documents this politicization of the business system.

Hezbollah gambles all in Syria

The strife that will consume everybody

By Samia Nakhoul

In the photograph the two robed men stand shoulder-to-shoulder, one tall and erect, the other more heavyset. Both smile for the camera. The picture from Tehran is a rare record of Iran's Supreme Leader Ayatollah Ali Khamenei meeting Sayyed Hassan Nasrallah, the head of Hezbollah, the Lebanese Shi'ite paramilitary group.

Taken in April during a discreet visit by the Hezbollah chief to his financial and ideological masters, the photograph captured a turning point in Syria's civil war and the broader struggle between Sunnis and Shi'ites, the two main branches of Islam. It was the moment when Iran made public its desire for Hezbollah to join the battle to help save Syria's President Bashar al-Assad, diplomats said. At the time, Assad and his Alawite sect, an offshoot of Shi'ite Islam, were losing ground to an advancing Sunni insurgency.

Within days of returning home, Nasrallah gave a televised speech making it clear that Hezbollah would fight alongside Assad to prevent Syria falling "into the hands" of Sunni jihadi radicals, the United States and Israel. The very survival of the Shi'ites was at stake, he said.

Soon afterwards, fighters from Hezbollah - which until then had largely stayed out of its neighbour's civil war - entered Syria. In June they helped Assad's forces recapture the strategic town of Qusair and other territory, turning the war in Assad's favour.

Regional security officials told Reuters there are now between 2,000 and 4,000 Hezbollah fighters, experts and reservists in Syria. One Lebanese security official said a central command in Iran led by the Revolutionary Guards directs Hezbollah operations in Syria in close coordination with the Syrian authorities. Another source said Hezbollah had "hit squads" of highly trained fighters in Syria whose task is to assassinate military leaders among the Sunni rebels.

Hezbollah declined to comment for this report on its involvement in Syria. Nasrallah has previously said it is necessary for Hezbollah to fight Sunni radicals allied to al Qaeda.

Officials in Iran did not respond to requests for comment. Last week, Iran's foreign ministry spokeswoman, Marzieh Afkham, said that Iran had no official military presence in Syria, but was providing humanitarian assistance. Last September, Mohammad Ali Jafari, head of the Revolutionary Guards, said some members of Iran's elite Quds force were in Syria but that it did not constitute "a military presence."

Hezbollah's role in Syria has ramifications not just in its home in Lebanon but across the region. If Assad wins, Iran's influence along the shores of the Mediterranean will grow. If he loses, Hezbollah and Iran's reach will likely be damaged. For some members of the group, the fight is an existential one.

Reuters has learned that a few voices within Hezbollah, which is considered a terrorist organisation by the United States and Europe, opposed joining the conflict in Syria. Two prominent members feared intervention would drag Hezbollah and the Shi'ite community into a quagmire; they questioned where the group would draw the line after Qusair.

The Economics and Politics of the Psychopath

The Gulags, the Chinese and Nazis Labor camps, were not the work of capitalists, but of capitalism’s enemies

BY JR NYQUIST

In November 2010 The Economist published a piece on psychopathy. The article suggested, however indirectly, that if psychopaths are packed into prisons they might also be packed into corporate boardrooms. It is, after all, the stupid psychopaths who get arrested. Perhaps the smart ones – being far more dangerous – go up the corporate ladder. According to The Economist, “The combination of a propensity for impulsive risk-taking with a lack of guilt and shame (the two main characteristics of psychopathy) may lead, according to circumstances, to a criminal career or a business one.”

In a short paper by Clive R. Boddy, titled The Implications of Corporate Psychopaths for Business and Society, the Corporate Psychopath is defined as “those people working in corporations who are self-serving, opportunistic, ego-centric, ruthless and shameless but who can be charming, manipulative and ambitious.” Boddy claims that psychopaths “may theoretically be present in organizations at senior managerial levels in much larger numbers than their approximately 1% incidence in the general population would suggest….”

Boddy’s paper claims that “Corporate Psychopaths are drawn to corporations as sources of power, prestige and money.” However, these folks are a “threat to business performance and longevity because they put their own interests before those of the firm.” In other words, psychopaths seek out situations where their tyrannical behavior and exploitive abilities will be condoned or even admired without actually caring if the business they manage ultimately succeeds. 

In a book titled Working With Monsters, Australian academic psychologist John Clarke shows how destructive psychopaths can be in the workplace. They present themselves as charming and efficient while, in reality, they are irresponsible and self-serving. Always in search of victims to enslave, the psychopath prefers to destroy rather than to build and should never be given authority over others. Yet, more often than we would like to admit, such people acquire positions of power for inflicting their petty tyranny on others. As Boddy wrote in his paper, “coming across [psychopaths] in organizations could present an employee with situations of harassment and humiliation.”

In an age of colossal financial loss – of Ponzi schemes at the corporate and federal level – there must be, somewhere in upper management, more than a few psychopaths. The damage done by such people may be incalculable. Think of the Savings and Loan crisis of the late 1980s and early 90s. Out of 3,234 savings and loan associations, 747 failed at an estimated total cost of $370 billion. Ruthless individuals, with no sense of responsibility, are highly dangerous when given management positions in sensitive organizations such as banks, investment firms, or government. In this respect, the news may be worse than we want to hear. Organizational psychologist Paul Babiak, author of Snakes in Suits, claims that psychopaths tend to rise quickly in business on account of their charm and readiness to manipulate others. While perfectly normal in outward appearance, the psychopath may appear to be an ideal leader. But in reality he victimizes everyone who relies on him.

As He Clips Our Coins, Bernanke Steals A Page From Nero's Playbook

Bending economic gravity

By Keith McCullough

“In 64 A.D., in a naïve attempt to deceive the populace, Nero decreased the silver content in the coins and made silver and gold coins slightly smaller” (The History of Money, pg 52)

As the quote above reveals, central planners have been clipping coins and devaluing the The People’s hard-earned currency for at least two thousand years.  The Roman Emperor Nero of course devalued the Roman currency for the first time in the Empire’s history. What was it that gave both the Roman and Ottoman Empires the audacity to plunder the purchasing power of their people?

After 200 years of operating as an independent bank, what made the British Empire so soft that it felt the need to socialize (nationalize) the Bank of England in 1946? What was the US “Free-Market” Empire and why have we empowered the Fed to change it?

If you disregard the vacuum of history in which Ben Bernanke thinks (the 1930s) and contextualize the moment his Fed currently occupies (within the construct of long-term history, which will ultimately judge Bernanke when he’s long gone), it’s getting scary again. But you probably already knew that. The sad thing is that some of his Fed heads do too.

On Monday, Dallas Fed Head Richard Fisher basically admitted two key things:

1.                 The current White House Administration has politicized the US Federal Reserve

2.               By not doing what they led the market to believe they would do (taper), the Fed is losing credibility

Check. check.

If you don’t understand the history of un-elected politicians devaluing currencies, you have some reading to do. Most people who aren’t paid not to “get” it understand this now. Self-education is the best long-term path to avoid becoming a lemming.

Look, I’m not that smart. Most people who have seen my SAT scores would agree. But I work hard and I recognize that Mr. Market is a very smart cookie. What I tend to get on a lag, is what Mr. Market is telling me to get. Unlike our Fed Chief, I don’t wake up every morning trying to bend economic gravity.

Ben Bernanke believes he can “smooth” gravity, economic cycles, etc. He’s basically telling the entire bond, currency, and stock markets that they are all wrong. So let’s stop, rewind the tapes and go to the score – what have markets done since Bernanke decided not to taper?