Considering the devastating effects they experienced, the people of Iceland reacted to the economic crisis with relative calm in the weeks following the collapse of the krona and the failure of the country’s three major banks. Yes, there were rushes on grocery stores, and a black market for foreign currency sprang up through classified ads. Some even participated in protests on weekends. Still, there were no reports of unrestrained chaos.
Now, over three months after the banking failure, Iceland’s government has collapsed in reaction to mounting dissent. Geir Haarde, the Prime Minister, stepped down today after his party failed to meet the demands of the Social Democratic Alliance, its coalition partner.
Mr Haarde’s resignation comes amidst significant turbulence. Last week, Iceland experienced its first violent rally in decades, with police using tear gas for the first time since 1949.
There is a pretty major difference between America and Iceland…
What he might have said was that the nations funding the majority of America’s public debt — most notably the Chinese, Japanese and the Saudis — need to be prepared to sacrifice. They have to fund America’s annual trillion-dollar deficits for the foreseeable future. These creditor nations, who already own trillions of dollars of U.S. government debt, are the only entities capable of underwriting the spending that Mr. Obama envisions and that U.S. citizens demand.
These nations, in other words, must never use the money to buy other assets or fund domestic spending initiatives for their own people. When the old Treasury bills mature, they can do nothing with the money except buy new ones. To do otherwise would implode the market for U.S. Treasurys (sending U.S. interest rates much higher) and start a run on the dollar. (If foreign central banks become net sellers of Treasurys, the demand for dollars needed to buy them would plummet.)
In sum, our creditors must give up all hope of accessing the principal, and may be compensated only by the paltry 2%-3% yield our bonds currently deliver.
So as a spin on the old [perhaps mis-attributed] Lenin quote about rope, the Chinese, Japanese and Saudis sold us the rope to hang ourselves. But we tricked them. We paid for that rope with nothing.
We may be hanging ourselves, but the other end of that rope is still tied to them with our dollars — if we go down, they’re coming with.
Maybe this is just one of my more pessimistic days, but I think that we’re actually reaching a major tipping point. I don’t know what that will entail, but it won’t be pretty. You can only sweep the dust under the rug for so long; eventually you trip over the big bump in the rug.
But it’s worth zooming in on why the Chinese are making this a priority right now: Chinese economists see universal health care as a way to induce consumption and economic dynamism. The Chinese have a high savings rate — indeed, an absurdly high savings rate, between 30 percent and 40 percent of income — and one of the reasons is fear of medical expenses. China lacks a safety net, and so people spend less because they need to plan for catastrophe. And if catastrophe doesn’t befall, then they’ve simply spent less. Which is a problem when you’re facing down a potentially long recession. And so China is trying to make it safe for its citizens to spend, which means making future expenses more predictable, which means offering health care coverage.
Chinese saving rates are extraordinary. While Ezra’s point that one of the reasons is a fear of catastrophic medical expenses, there are certainly other factors at work — cultural, historical, etc. China is a poor country rapidly modernizing, and I would guess that the level of uncertainty for most workers is surprisingly high. Americans who lived under the Great Depression were far more savings-oriented than Baby Boomers or Gen-Xers, and this is probably due in large part to knowing “how bad it can get”.
But look at what Ezra is claiming here. He is essentially claiming that because the Chinese — who have decided their best interests are to save rather than to engage in American-style consumerism — aren’t “spending enough”, that the government should take their money away from them to cause them to spend more. The logic is that government taking away a bunch of money will remove their responsibility to plan for their lives, and allow them to live on the edge.
Doesn’t this remind anyone of the reason we’re in a worldwide deflationary debt spiral bordering on the worst financial crisis in history?
This completely avoids the COST of such a safety net as Ezra is suggesting. For many, it could be between 25 and 45 percent of income. If you look at high-tax European countries, where the social safety net is well-established, citizens need not worry about saving 30 to 40% of their income, because the government has taken it away as taxes.
China would be far better served by private entities (such as insurance companies, etc) helping to allow them to better plan their future expenditures than passing that burden to the government. In order for that to occur, of course, it would require a consistent legal environment based upon the rule of law, much more economic liberalization, and a commitment to property rights. The end result, however, would be to empower the Chinese to have both moderate saving rates, consistent planning of expenditures, and higher consumption. And it would allow them to control the balance of each. Ezra, on the other hand, would rather the government simply take the money away from them and decide how it gets spent.
From The Economist’s Free Exchange blog, the Brits are learning that you can’t play the King when you’re only a Duke:
Do not do as America does, unless you are a very big country (or economic bloc). That seems to be the lesson Britain is learning as the pound weakens and confidence in the credit worthiness of the country slips. If you have a global reserve currency, if private demand for your debt is strong, if the flight to safety means that government borrowing costs remain low no matter how profligate the central bank, well, then you can do as America has done. If not, better prepare to have your capital dubbed “Reykjavik-on-Thames”.
I don’t think many Americans understand the fortunate position our currency holds in the world. I don’t think they understand that we’ve been taxing the world for decades, but that the world is so intertwined with our monetary system that we’re the de facto “gold standard” of the world.
Hopefully for America, the rest of the world doesn’t wise up and realize the tribute they’ve been paying. I think it’s too late, though. Even if they realize it, they [and we] are still screwed.
The quintessential French blue cheese found itself the unlikely focus of a trade war after the Bush administration took punitive action for the European Union’s ban on imports of US hormone-treated beef.
America imposed a 100 per cent import duty on a long list of EU products on Thursday, but singled roquefort out for a 300 per cent tariff.
Producers of what the French hail as the “king of cheeses” for its salty tang and creamy finish are furious at the move. They claimed that the action was a parting shot by a Bush administration still piqued by France’s opposition to the Iraq war and that President George W Bush had taken his final revenge against a nation once maligned by Americans as “cheese-eating surrender monkeys”.
“Roquefort is a French symbol and we’re paying for its fame,” said Robert Glandieres, president of producers of the cheese, which is made in the Midi-Pyrenees region from sheep’s milk according to a 1,000-year-old tradition.
But don’t worry, in this economy Obama’s going to provide us with all the government cheese we can eat!
Lovers of liberty, rejoice. Today, we’re launching FreedomPolitics.com, a site dedicated to the pursuit and protection of freedom.
We’re not the only ones who think freedom needs a hand, but as a Freedom Communications site, we follow the model of an exceptional defender of liberty, R.C. Hoiles. [snip]
With the support of more than 25 newspapers across the country, including that flagship, FreedomPolitics.com will be a hub of news and commentary dedicated to spreading R.C. Hoiles’ vision and the ideas of liberty of liberty he loved.
Right now we’re just getting started (consider this our soft launch), so don’t hesitate to let us know if something goes awry. The site will go fully operational on Inauguration Day with a slate of commentary from the top minds in the freedom movement.
The first set of articles are great. My fave is from former co-worker Doug Bandow, who writes about our “Return to Liberal Interventionism.”
Barack Obama is nothing if not a unique politician. Despite his liberal background, he rushed to the center after the election.
Indeed, his foreign policy is starting to look like a slightly more reasonable version of Bush-McCain neoconservatism. The result may be promiscuous military intervention, but only after Washington takes the usual diplomatic steps and rounds up the usual allies.
The most disconcerting sign of the future is the appointment of Hillary Clinton as secretary of state. True, when testifying before the U.S. Senate she sounded like the model of responsibility: “We must build a world with more partners and fewer adversaries. Foreign policy must be based on a marriage of principles and pragmatism, not rigid ideology.”
I’m bookmarking the site and will be checking it out from time to time.
Back in the day, antitrust regulators decided that including a browser with an operating system was an unfair competitive measure. But to this day, they’ve only ever enforced this against Microsoft, and the EU is still pushing:
European antitrust regulators have told Microsoft Corp. that the company’s practice of including its Internet browser with its popular Windows operating system violates European competition law, Microsoft said Friday.
The Redmond, Wash.-based software giant (MSFT) said that it’s been presented with a statement of objections informing it that related remedies put in place by U.S. courts when Microsoft settled an antitrust case in this country in 2002 are not adequate for Europe, though a “final determination” hasn’t been made on the matter.
I’ve never really used Apple’s computers much, but I’m pretty sure you can’t buy an Apple PC without Safari pre-installed. I’ve installed a number of Linux distributions (Red Hat, Debian, ubuntu, and even a 50MB distro called DamnSmallLinux), and every single one of them has been bundled with a browser. Microsoft has argued that a browser is a critical part of an operating system, and thus — even though it sucks — it makes perfect sense for them to distribute IE with Windows.
In fact, it’s so pervasive, that I’ve never seen an OS that comes without a browser pre-installed. Is the EU going to go after each of OS distributors next? I didn’t think so.
Back in October, I posted on a little problem appearing in Venezuela. The government’s spending requires very high oil prices to keep the books balanced, and $40 oil is not exactly close to that target.
President Hugo Chávez, buffeted by falling oil prices that threaten to damage his efforts to establish a Socialist-inspired state, is quietly courting Western oil companies once again.
Until recently, Mr. Chávez had pushed foreign oil companies here into a corner by nationalizing their oil fields, raiding their offices with tax authorities and imposing a series of royalties increases.
But faced with the plunge in prices and a decline in domestic production, senior officials have begun soliciting bids from some of the largest Western oil companies in recent weeks — including Chevron, Royal Dutch/Shell and Total of France — promising them access to some of the world’s largest petroleum reserves, according to energy executives and industry consultants here.
Their willingness to even consider investing in Venezuela reflects the scarcity of projects open to foreign companies in other top oil nations, particularly in the Middle East.
First, he’s going to auction off the fields. Then, the companies who actually have technology will develop them. Finally, when prices have risen and he’s feeling saucy, he’ll re-nationalize them.
Any oil company that trusts Chávez, at this late date, won’t get much sympathy from me when he changes course again.
“As I’ve said before, the United States does not torture,” said President Bush in 2006. “It’s against our laws and it’s against our values.”
The AP brings us the latest episode of the other half of the story:
“We tortured Qahtani,” Crawford said, making her the first senior Bush administration official to say that aggressive interrogation techniques had crossed the line.
“His treatment met the legal definition of torture, and that’s why I did not refer the case” for prosecution, she said.
Al-Qahtani in October 2006 recanted a confession he said he made after he was tortured and humiliated at Guantanamo.
The alleged torture, which he detailed in a written statement, included being beaten, restrained for long periods in uncomfortable positions, threatened with dogs, exposed to loud music and freezing temperatures and stripped nude in front of female personnel.
The definition of torture is when the victim has no effective choice but to say something, true or false, to end the ordeal. You can bring a victim to that point of surrender of his or her soul and will in many different ways.
In the meantime, some people partially responsible for 9/11 may never be prosecuted because of the irresponsible, illegal and immoral acts of the soon-to-be previous administration.
Germany is now reporting the worst recession they’ve faced in at least 12 years has begun:
The German economy, Europe’s largest, contracted more than economists expected in the third quarter, pushing the nation into the worst recession in at least 12 years.
Gross domestic product dropped a seasonally adjusted 0.5 percent from the second quarter, when it fell 0.4 percent, the Federal Statistics Office in Wiesbaden said today. Economists expected a 0.2 percent decline, the median of 40 forecasts in a Bloomberg News survey showed. The economy last contracted this much over two consecutive quarters — the technical definition of a recession — in 1996.
And this is not likely to be contained in Germany:
The International Monetary Fund predicts advanced economies including the U.S. and euro area will contract simultaneously next year for the first time since World War II. Federal Reserve Chairman Ben S. Bernanke, Bank of England Governor Mervyn King and European Central Bank President Jean-Claude Trichet have all signaled they’re ready to cut interest rates further to stem the deepening economic slump.
The European Commission said on Nov. 3 that the 15-nation euro region is probably already in a recession. Just over 40 percent of German exports go to other euro-area nations.
Several other European nations are expected to be reporting GDP numbers over the next day. The news is not expected to be positive, with at least Italy and Spain looking weak, with some troubles in France as well.
All this bad news will lead right into the G20 summit, and is likely to lead to some very interesting talks. You’ve already seen my thoughts on that. Sadly, I think Bush’s comments today may only throw fuel on the socialistic fire, since his words carry negative weight these days.
It’s tough for me even to pay attention to this stuff. Each day, I work to educate myself more and more about what’s actually going on. Each day, I try to get a better and better handle on the truth. The truth is making me less pessimistic about the market, and unfortunately is making me far more fatalistic. I’m really thinking Great Depression II is on the way. I just hope this doesn’t come true.
Over the last few months, I’ve been trying to devote time to the credit crisis and bailout. Unfortunately, the news cycle is often so short that it’s difficult to keep up. Today I was lucky to be able to catch the bailout modification. With the busy times ahead, though, there’s something that needs to be monitored very, very closely:
The Group of 20 nations is prepared to act “urgently” to bolster growth and called on governments to cut interest rates and raise spending as the world’s leading industrialized economies battle the threat of a recession.
“We stand ready to urgently take forward work and actions agreed by our leaders to restore and maintain financial stability and support global growth,” the group said in a statement released yesterday following a meeting in Sao Paulo. “Countries must use all their policy flexibility, consistent with their circumstances, to support sustainable growth.”
Those measures include “monetary and fiscal policy,” it said.
The G20 nations will be at a summit in Washington beginning this Saturday.
Something tells me that nothing good for us “plebes” will come of this. We’ll end up paying dearly for this.
The City Club of Cleveland extended an invitation to the top six presidential candidates*. Of the six candidates, Libertarian Party candidate Bob Barr, Constitution Party candidate Chuck Baldwin, and independent candidate Ralph Nader participated; Democrat Barack Obama, Republican John McCain, and Green Party candidate Cynthia McKinney were no-shows.
Unlike the debates we have already seen in this cycle, the candidates in this debate actually debated the issues!
*The candidates who could theoretically receive the requisite electoral vote to win the presidency
I just received my mail-in ballot a week or so ago. The ballot, with multiple choices with arrows to be filled out next to each choice, reminds me of taking standardized tests back in the day. Some tests were easier than others but I knew that if I did not study, one of two things could happen: (1) I could get lucky and answer enough of the questions correctly to pass or (2) I could possibly fail.
In a way, the general election is a final exam. Whether one “passes” the exam or not depends on whether s/he votes according to his or her principles. In order to increase your chances of voting according to your principles, you must study.
I am disgusted with the Republican and Democrat parties. When going over my ballot, my first instinct was to vote Libertarian in every race with a Libertarian candidate. I had studied all of the ballot measures and was satisfied that I could make intelligent choices there, but I hadn’t researched the candidates below the presidential level*. In the U.S. House race, I found three choices: the incumbent Diana DeGette (D), George Lilly (R), and Martin Buchanan (L). I knew that DeGette supported the bailout so she was never an option. Buchanan is a Libertarian and his positions he posted on his website are indeed Libertarian.
So why not just support the Libertarian you ask?
Regardless of how much I despise the Republican and Democrat parties, I make an effort to learn about the individual candidates and their positions before making a choice. Much to my delight and surprise, I found the Republican, George Lilly to be a “Ron Paul Republican.” I knew that there were such individuals running in this election but I never thought I would have had an opportunity to vote for one!
9. RESTORE integrity to the tax system — rein in the I.R.S.
10. RESTORE and retain rights to unregulated health supplements & the Internet.
The following will be my top priorities in Congress:
1. Create a level playing field for Americans who receive the benefit of Workmen’s Compensation, mandatory health insurance, retirement benefits, taxes, OSHA, EPA etc. and calculate that into the cost of the products manufactured so that any foreign country not providing the same benefits to their employees would have to pay a tariff on their imported products to equal that amount.
2. Support a bill that calls for a single subject on all spending bills.
3. Oppose unconstitutional spending in the form of corporate subsidies.
4. Oppose unconstitutional spending in the area of education so that “No (every) Child Left Behind” is abolished.
5. Hold the Federal Reserve to account for their corruption of the dollar which has driven up the price of everything way beyond what any normal person can even consider affording!
While I have some concern about his #1 priority being a little on the protectionist side, I certainly applaud his willingness to stand up for the Constitution and against big government**. He’s not purely libertarian but in my estimation, he’s at least as libertarian as Ron Paul.
Having learned about George Lilly’s positions, most of which I agree with, I am very glad I had taken the time to make an informed choice. Now my choice was between the Ron Paul Republican and the Libertarian. Who should I choose?
Most things being equal, I decided to support Lilly. As a practical matter, the Republican Lilly would have a much better chance of unseating DeGette than the Libertarian Buchanan. I have not seen any polls regarding the District 1 race, but I suspect that in a district which seems to worship the ground Barack Obama walks on, DeGette will be difficult if not impossible to beat. If most of the libertarian vote goes to Buchanan, we’ll almost certainly re-elect a tax and spend Democrat to another term.
This is why I urge everyone to study each race before casting a vote***. Put emotions aside and “think the vote.” Though the electorate as a whole may fail the exam, we should each make the effort to pass individually. » Read more
For the better part of a decade, Hugo Chavez has been running “La Revolución!” It’s been an attempt to remake Venezuela and then the rest of South America into a socialist powerhouse that would stand up to el Diablo del Norte.
He’s financed this movement on high oil prices. As an oil exporting nation, and as a dictator who has nationalized oil into a fully state-owned enterprise, he’s been living high on the hog for quite some time. Many of us predicted that he was wasting money that would be better spent exploring for more oil on his social programs and would eventually face the reckoning of declining production. Instead, though, he may face his fate more quickly:
According to studies prepared by PFC Consulting Limited, a Washington-based wholly owned subsidiary of Power Finance Corporation Limited, and German bank Deutsche Bank, Venezuela is the most vulnerable country to the financial crisis.
PFC considers that Venezuela needs that the price of oil averages USD 97 to balance its accounts while in 2000, the South American country required that the price of the barrel of petroleum was USD 34.
Deutsche Bank says that next year Venezuela and Iran require that the average price of oil remains at USD 95; Saudi Arabia at USD 55 and Russia at USD 70.
The Ministry of Energy and Petroleum only releases the weekly price of the Venezuelan basket of crudes, and based on the statistics, oil prices dropped 35.3 percent, from USD 126.46 on July 18 to USD 81.78 at the end of last Friday session.
Venezuela has been spending and spending, like the good times of high oil prices will never end. In a weakening economy, perhaps with oil heading downwards further, it seems likely to put a stop to his wider dreams of regional domination. I’d say that it puts his own administration in jeopardy, though, but I think he’s got enough of a lock on power at this point that very little will challenge his reign internally.
Of course, it’s not like America is without fault, as we’re reeling from the same overexuberance and feeling like the good times would never end. But we didn’t put all our eggs in one oil barrel, so I think we’re much more capable of weathering this storm than Venezuela.
Some readers have questioned the veracity of the article I cited in yesterday’s post (which is a good thing and should be encouraged). I am not familiar with the work of the article’s author, Amir Taheri and cannot speak to his credibility one way or the other. I realize that there is a great deal of misinformation from both the Right and the Left in the Blogs as well as the MSM concerning the top candidates running for president and vice president. Like many people, I’m just trying to find the truth.
Having said that, the charge by Taheri is very serious and deserves to be investigated further by the MSM. There’s an article in today’s New York Post written by Geoff Earle which reports that the Obama campaign has responded to Taheri’s article:
WASHINGTON – Barack Obama said yesterday he didn’t urge Iraq to hold up an agreement with the Bush administration over the status of US troops serving in Iraq.
“Obama has never urged a delay in negotiations, nor has he urged a delay in immediately beginning a responsible drawdown of our combat brigades,” said Wendy Morigi, an Obama spokeswoman in response to a column in yesterday’s Post.
Morigi cited “outright distortions” in an column by Amir Taheri, but the Obama camp did not specifically dispute any of the quotes in the piece.
I’ll see if I can find the actual statement from the Obama campaign to find out which parts of the Taheri article they claim to be “outright distortions.”
If this turns out to be true, this could be the most damning scandal exposed of any of the candidates seeking to be the next president or vice president. According to an article in The New York Post, Sen. Barack Obama told Iraqi leaders to delay a U.S. troop withdrawal agreement until after the presidential election:
WHILE campaigning in public for a speedy withdrawal of US troops from Iraq, Sen. Barack Obama has tried in private to persuade Iraqi leaders to delay an agreement on a draw-down of the American military presence.
According to Iraqi Foreign Minister Hoshyar Zebari, Obama made his demand for delay a key theme of his discussions with Iraqi leaders in Baghdad in July.
“He asked why we were not prepared to delay an agreement until after the US elections and the formation of a new administration in Washington,” Zebari said in an interview.
Obama has made many contradictory statements with regard to Iraq. His latest position is that US combat troops should be out by 2010. Yet his effort to delay an agreement would make that withdrawal deadline impossible to meet.
Obama has made ending the war in Iraq a hallmark of his campaign. Is he more concerned about bringing the troops home sooner than later or does he really want the troops to remain in Iraq just long enough so he can take credit for fulfilling a campaign promise? The idea that a presidential candidate would try to keep the troops in harm’s way any longer than he believes necessary is truly disturbing.
Regardless of my political differences with Sen. Barack Obama, I sincerely hope this turns out to be untrue. Perhaps those in the MSM can get over their “tingly feelings” for a moment and actually do their jobs and follow up to find out if this is true.
There’s a lot of hoopla and hullabaloo over the politicization of the Olympics, including the fact that it’s held in a country that is horrendously restrictive of social freedoms.
But there’s another aspect that’s largely ignored. There is a certain nationalism that follows the Olympics, which is wholly unjustified. As Americans, we are expected to celebrate the accomplishments of American athletes as if they are our own– as if their accomplishments bring glory to America rather than to the athletes themselves. The whole nation-glorification aspect reminds me more of a McCain campaign rally.
Tonight, the American women’s gymnastics team was bested by the Chinese in the team competition, while the American men’s relay swimming team absolutely destroyed a world record on the way to their own gold medal in that competition. Should I feel pride, as an American, that our men’s swimming team did so well? Should I feel shame, as an American, that our gymnastics team was beaten by the athletes of a nation whose government is deplorable on a level that we Americans are nearly unable to comprehend?
No. All of this faux-nationalistic-pride is bullshit. I don’t share in any of the wins, nor in any of the defeats, of the American Olympic athletes. I celebrate those Americans who have excelled in these Games, just as I also celebrate those non-Americans who have excelled in these games.
The Olympics is a competition that pits the best of the best, from around the world, in feats that the rest of us can simply ogle as if they’re super-human. We should celebrate the athletes that medal in these games, whether they’re American, Chinese, Russian, Kenyan, Indian, Chilean, or from any other nation in the world. This is a competition of the best of the best, and we should be celebrating the best, not some faux nationalism of athletes who we have no connection with outside of an arbitrary accident of sharing borders.
Celebrate those Americans and non-Americans who medal at the games, but understand that their accomplishments are not your accomplishments. As Doug Stanhope said:
You didn’t medal anywhere. Why should you care if some American who you have never met– and will never meet– beats some foreign athlete who you will never meet?
One of the key ideas that I find myself discussing in any election cycle is the desire of Americans to elect a savior. Not gonna happen. The system is bigger than the players, and the system is flawed.
But that doesn’t stop the average voter from trying to elect someone who will “run the country”, “fix the economy”, and “encourage growth”. Again, not gonna happen. There is very little that a government can do to improve the economy. Government is not an efficient economic actor. Usually, without getting into a debate on anarchism vs. minarchism, the traditional role of government in an economy is to set fair rules protecting individual actors from force or fraud, and enforce those rules in a consistent and predictable manner. Thus, the best thing that a government can do for an economy is not to get involved, but to stay out of the way unless a dispute arises to be settled by a supposedly neutral arbiter.
Of course, the fact that there aren’t many actions a government should take to improve an economy should not suggest that they don’t have power over an economy. They have plenty of power to cause mayhem and destruction with the stroke of a legislative pen, as we have seen in Zimbabwe, with their 2 million percent inflation:
With prices doubling every few days, Zimbabweans now spend huge amounts of time and energy preventing their meagre cash resources from completely evaporating. Trying to catch up with galloping hyperinflation, now officially running at 2.2m per cent a year and at least four times faster in reality, the central bank has been printing ever bigger denominations. But it is outrun by galloping prices: at last count, the most valuable banknote available was for 50 billion Zimbabwean dollars, now worth barely 70 American cents on the black market, and the stock of Zimbabwean dollars is dwindling. Local cash could become scarcer still, now that the German company that was providing Zimbabwe with paper to print its banknotes has cancelled its contract; the Zimbabwean monetary authorities are likely to turn to a less specialised supplier. Meanwhile, people do not even bother to pick up notes of hundreds of thousands on the pavements of Harare, the capital. At independence in 1980, the Zimbabwe dollar was more valuable than the American greenback.
It may seem odd that the local currency is still used at all. From Z$25 billion to the American dollar at the beginning of this month, the cash exchange rate had jumped threefold within a fortnight. In restaurants or shops, prices are still quoted in local currency but revised several times a day. Salaries are paid in Zimbabwean dollars, still the only legal tender. A minibus driver taking commuters into Harare every day still charges his clients in Zimbabwe dollars—but at a higher price on the evening trip home—and changes his local notes into hard currency three times a day. The local money is losing its relevance.
Zimbabwe’s currency is now so worthless that their German supplier won’t even sell them the paper to print it on. You can look at all the problems of Zimbabwe’s history, through colonialism, foreign rule, etc. But nothing about the current situation can be described as anything but massive failure at the governmental level. No private actor has the power to cause this much misery.
Libertarians generally believe that government is inherently evil, and should be minimized. But (with the exception of anarchists) they believe that the government is a necessary evil. Governments are like parasites: the good ones actually form symbiotic relationships with their hosts and rely on their hosts continued survival and success. Others, like that of Zimbabwe, continue eating until their hosts are consumed, leaving nothing but a carcass of a society behind that must be built anew.
John McCain must hate little girls. It is one of many inescapable conclusions that arise from reading his National Security position paper, which promises all things to everyone – well almost everyone. His foreign policy plans promise more submarines, more ships, more aircraft, more divisions, more security, more military assistance for allies, more attacks on enemies, more purchases from the military-industrial complex. About the only thing he does not promise in the document is to give every little girl in America a pony. I presume that this is not an oversight. Sen McCain is very focused on foreign policy and military matters, and I cannot imagine that the omission of free ponies was anything but intentional.
Don’t believe me? Well, let’s go through the document together and we can look at all the things he does promise, and you will see the glaring omission of ponies for little girls in this fantastic proposal.
In a dangerous world, protecting America’s national security requires a strong military. scratcccccchhhhhh
Wow, one sentence in, and I can already see Sen McCain’s famed courage – I see this was published without being reviewed by an editor who knew how to write English well! This is the public relations equivalent of going commando. Just as charging recklessly at the pillbox can get you shot needlessly, Sen McCain has opened himself up to an attack – Do we really want a president who wishes to defend that national security apparatus of the United States? What happened to defending American’s who are not involved in national Security? Of course, this attack is unfair. Rather, Sen McCain or a staff member merely screwed up the topic sentence of one of his more high profile position papers.
In a dangerous world, protecting America’s national security requires a strong military. Today, America has the most capable, best-trained and best-led military force in the world. scratcccccchhhhhh
Does anybody remember the strategic surprise of the Russians capturing that airport in Kosovo? Osama bin Laden’s escape from Tora Bora? The first attempt to smash Fallujah? The U.S. military gets away with a lot because they have an overwhelming amount of firepower, and have faster communications than the little tin pot dictators or rudimentarily armed militias they’ve been fighting. If the U.S. military has the best officer corps in the world, then we must be entering into a new age of prosperity and peace since all the other militaries must be officered solely by incompetents without a single officer of average intelligence amongst them.
But much needs to be done to maintain our military leadership, retain our technological advantage, and ensure that America has a modern, agile military force able to meet the diverse security challenges of the 21st century.
John McCain is committed to ensuring that the men and women of our military remain the best, most capable fighting force on Earth – and that our nation honors its promises to them for their service.
And here we go!
The global war on terrorism, wars in Iraq and Afghanistan, threats from rogue states like Iran and North Korea, and the rise of potential strategic competitors like China and Russia mean that America requires a larger and more capable military to protect our country’s vital interests and deter challenges to our security. America confronts a range of serious security challenges: Protecting our homeland in an age of global terrorism and Islamist extremism; working with friends and partners overseas, from Africa to Southeast Asia, to help them combat terrorism and violent insurgencies in their own countries; defending against missile and nuclear attack; maintaining the credibility of our defense commitments to our allies; and waging difficult counterinsurgency campaigns in Afghanistan and Iraq.
Wow! It seems that the United States taxpayer must take part in every fight on Earth! Let’s review the conflicts:
The occupation of Iraq
The occupation of Iraq is a purely discretionary exercise. Iraq does not, nor did it ever pose a threat to U.S. citizens living within the borders of the United States. If the United States were to withdraw all its forces as fast as possible, it would be decades, if ever, before whatever gang took over and proclaimed itself as the government of Iraq had mustered up the firepower to launch a significant attack on the people of the U.S.
It did however threaten the Saudi monarch, and John McCain understands that preserving freedom at home requires sending U.S. soldiers overseas to die to prop an unpopular king on his throne.
The occupation of Afghanistan
Many people consider this to be required to defend the U.S. from attack. Certainly, if you accept the need to fight a global war on terrorism, the occupation of what was Al Queda’s rear areas is a requirement. Of course, this occupation is going badly; Slowly but surely, the United States is controlling less and less territory there. Occupying Afghanistan so weakened the Russian military that it collapsed. the U.S. army’s experience is similar to the Russian one – an seemingly easy early conquest followed by a slow war of attrition that saps men and wrecks equipment. Every month is harder than the previous one.
The Taliban who were bankrolled by the Saudi King (the guy U.S. soldiers are dying in Iraq to protect), the Pakistani government (who were trying to counter Iranian influence in Afghanistan) and increasingly by the lucrative heroin trade (high profits courtesy of the U.S. War on (Some) Drugs. The Taliban were also bankrolled by al Queda which purchased their protection.
The War on Al Queda
Al Queda’s mission is the overthrow of the Saudi king (whom U.S. soldiers are dying in Iraq to defend). They targeted the United States because the United States loans soldiers to defend the Saudi King, builds the bases he uses to secure his territory and supplies him with weapons, ships and aircraft. The leadership of al Queda, many of whom survived the vicious Egyptian security forces (funded and trained by the United States) who viewed the religious conservatives as a threat to their power (the Egyptian rulers being old school pan-arab socialists who were bankrolled by the soviet Union until the U.S. government offered to give them taxes collected from U.S. citizens), have developed a hatred of the United States for bankrolling their attackers.
The Iranian government is unpopular. It levies heavy taxes on the population, harasses young people looking for love, meddles in school curricula, and has pursued an inflationary monetary policy which is wrecking the economy. And like every powerful government that is screwing up domestically, they try to play up external threats. They make noises about how they are surrounded by enemies and that other governments pose a threat to the Iranian people, in an attempt to awake nationalist feelings. And they can easily make this case; their substantive negotiations with the U.S. state department in 2002 were shut down by the Bush administration. Most of the nations bordering Iran have U.S. bases with combat troops stationed in them. And the U.S. government, which initiated a war against Iran in 1954 has been obligingly threatening to bomb them… with nuclear weapons…
Officially, the purpose of this new proposed war is to keep the Iranian government from using nuclear weapons (which they don’t possess) against Israel.
Did I mention that Iran has a population that is much larger than that of Iraq? And that the terrain is pretty mountainous. And that they have the capability to cut the southern supply lines of the U.S. army occupying Iraq (in order to help prop up the Saudi King on his throne?
North Korea tried to build a nuclear bomb. It didn’t work. They flooded most of their farm land and now have a permanent famine going. They pose a threat to … South Korea. Except that South Korean soldiers are better fed and have more modern weapons and have prepared defenses, and have a larger population to draw upon. If the United States Government would quit subsidizing the government with food aid, it would probably have collapsed already.
Having largely abandoned central planning, the Chinese economy is booming, allowing the government to levy the taxes to build ships, submarines and aircraft that would have been modern in the late 1970’s. the Chinese people do allot of business with people living in the United States. They have territorial ambitions over a few sections of Central Asia and over Taiwan, and have absolutely no interest in attacking the United States.
The Russians have loads of natural resources and little else. While their government is moving in a fascist direction, their territorial ambitions are focused on “defending” slavic peoples’ hegemony in the Balkans and Eastern Europe.
The Equipment Needed When Seeking Out New Enemies
To take on all these enemies, which do not directly threaten the citizenry, McCain proposes a massive arms build up to “modernize ” the U.S. military. he proposes increasing the size of the U.S. military dramatically. He proposes expanding benefits offered to veterans. He promises that the U.S. will prop up more governments that face popular rebellions, thus increasing the number of people who view the U.S. people as enemies fighting against them. He promises to increase intelligence gathering world-wide – more spies, more expensive spy satellites, more payoffs to local insurgents to provide the U.S. with intelligence (payoffs which all too often fund terrorist attacks against U.S. enemies).
John McCain famously commented that he didn’t know much about economics, and this paper proves it. These new divisions, their equipment, the aircraft, ships, submarines and satellites, the bombs and ammunition required for this adventure in world domination will not be produced by elves working at Santa’s workshop on the north Pole. They will be paid for either by taxes on the U.S. citizenry, or by debasing the U.S. dollar. Unless John McCain is going to eliminate medicare, the U.S. citizenry will be paying for these things at a time when they have little wealth to spare. rather than producing consumer goods or other forms of wealth, the labor of people making or shooting the weapons will be wasted economically speaking.
There is one word to describe this proposal: fantasy. this plan will never happen. The United States economy will implode well before McCain has raised half of the divisions he needs to put his plan of world domination into action. and since John McCain is throwing unrealizable wishes left and right in this paper, it’s a shame he decided not to throw in a pony for every little girl in the U.S. Who knows, that is one wish that Santa might have granted…
The rest of the paper.
The rest of the paper continues banging the drums of war in much the same vein as what has already been commented on.I am therefore going to leave reading the rest as an exercise to the reader.
Looks like the “reveal” may be a few short years away. Maybe it will finally be understood just how deeply the rottenness and fraud has gone:
to imagine the IMF investigating the US financial system is unthinkable, or was. But, at the weekend, Der Spiegel reported that the IMF would conduct a full investigation into virtually every aspect of it.
Der Spiegel wrote that the IMF had “informed” Federal Reserve chairman Ben Bernanke of plans that would have been unheard of in the past: a general examination of the US financial system. The IMF’s board of directors has ruled that a so-called Financial Sector Assessment Program is to be carried out in the US.
This, Der Spiegel wrote, “is nothing less than an X-ray of the entire US financial system”, adding that “no Fed chief in US history has been forced to submit to the kind of humiliation that Ben Bernanke is facing”.
The fact that the IMF is knocking on the very doors of its parents and waving legal papers about who lost the house, the car and the kids will, if the past is anything to go by, be buried in the US by pom-pom waving on CNBC telling all what a great time it is to buy.
A little over a year ago– in one of my pessimistic phases– as the subprime mess was just starting to become apparent to the masses, I penned a post about the potential end of the American financial empire. I pointed out that the dollar as the world’s reserve currency and the petrodollar allows the US to inflate without experiencing the pain that should follow. I said that as alternative currencies gain momentum, there was the chance that other nations might ditch the dollar, and send them all back here for that visible inflation to occur in rapid form.
This action by the IMF may be the catalyst. There’s already a lack of faith in the American financial position. Nobody has been willing to publicly acknowledge, though, that the emporer is naked. Once that happens, it makes it much more likely that other nations will act to protect their interests from being hurt by our economic collapse.
In the long run, fixing our economic system will be a positive event. But in the long run, we’ll all be dead. There may be a lot of pain in the interim.