Streetwise Professor

September 12, 2016

The New Deal With Chinese Characteristics

Filed under: China,Commodities,Economics,History,Politics,Regulation — The Professor @ 1:03 pm

When I was in Singapore last week I spoke at the FT Asia Commodities Summit. Regardless of whether the subject was ags or energy or metals, China played an outsized role in the discussion. In particular, participants focused on China’s newish “supply side” policy.

There is little doubt that the policy–which focuses on reducing capacity, or at least output in steel, coal, and other primary industries–has had an impact on prices. Consider coking coal:

Coking coal, the material used by steelmakers to fire their blast furnaces, has become the best performing commodity of 2016 after surging more than 80 per cent over the past month on the back of production curbs and flooding in China.

Premium hard Australian coking coal delivered to China hit $180.9 a tonne on Friday, this highest level since price reporting agency Steel Index began publishing assessments in 2013. It has risen 131 per cent since the start of the year, outpacing gold, silver, iron ore and zinc — other top performing commodities.

The main driver of the rally — which has also roiled thermal coal — is Beijing’s decision to restrict the number of working days at domestic mines to 276 days per year from 330 previously.

This policy is aimed at the improving the profitability of producers so they can repay loans to local banks. But it has reduced output and forced traders and steel mills to buy imported material from what is known as the seaborne market.

80 percent. In a month.

Or thermal coal:

Newcastle thermal coal is heading for the first annual gain in six years as China seeks to cut overcapacity and curb pollution. While the timing of the output adjustment is unavailable, it may start in September or October after recent price gains, Citigroup said in the report dated Sept. 8. Bohai-Rim is 26 percent higher from a year ago, when it was 409 yuan, while Newcastle has climbed as much as 40 percent this year.

The phrase “supply side reform” actually fits rather awkwardly here, at least to a Western ear. That phrase connotes the reduction of regulatory and tax burdens as a means of promoting economic growth. But Supply Side Reform With Chinese Characteristics means increasing the government’s role in managing the economy.

A better description would be that this is The New Deal With Chinese Characteristics. FDR’s New Deal was largely a set of measures to cartelize major US industries, in an effort to raise prices. The economic “thinking” behind this was completely wrongheaded, and motivated by the idea that there was “ruinous competition” in product and labor markets that required government intervention to fix. Apparently the higher prices and wages were supposed to increase aggregate demand. Or something. But although the New Deal foundered on Constitutional shoals only a few years after its passage, in its brief existence it had proven to be an economic nightmare rent by contradictions. For instance, if you increase prices in an upstream industry, that is detrimental to the downstream sector for which the upstream industry’s outputs are inputs. According to scholarship dating back to Milton Friedman and Anna Schwartz, and continuing through recent work by Cole and Ohanian,  interference in the price mechanism and forced cartelization slowed the US’s recovery from the monetary shock that caused the Great Depression.

The motivation for the Chinese policy is apparently not so much to facilitate the rationalization of capacity in sectors with too much of it, but to increase revenue of firms in these sectors in order to permit them to pay back debt to banks and the holders of wealth management products (which often turn out to be banks too). Further, the policy is also driven by a need to sustain employment in these industries. Thus, the policies are intended to prop up the financially weakest and least efficient companies, rather than cull them.

So step back for a minute and contemplate what this means. Through a variety of policies, including most notably financial repression (that made capital artificially cheap) and credit stimulus, China encouraged massive investment in the commodities and primary goods sectors. These policies succeeded too well: they encouraged massive over-investment. So to offset that, and to mitigate the financial consequences for lenders, local governments, and workers, China is intervening to restrict output to raise prices. Rather than encouraging the correction of past errors, the new policy is perpetuating them, and creating new ones.

Remind me again how China’s government got the reputation as master economic managers, because I’m not seeing it. This is an example of a wasteful response to wasteful over-investment: waste coming and going. Further, it involves an increase in government intervention, which obviously has those in favor a more liberal (in the Smithian sense) free market policy rather distraught, and which foreshadows even more waste in the future.

The policy is also obviously fraught with tensions, because it pits those consuming primary and intermediate goods against those producing them–and against the banks who are now more likely to get their money back. That is, it is a backdoor bank (and WMP) bailout, the costs of which will be borne by the consumers of the goods produced by industries that were supersized by past government profligacy.

Ironically, the policy also stokes something that the government purports to hate: speculation. Policy volatility encourages speculation on the goods and industries affected by these policies. The large movements in prices in the coal and iron-steel sectors in response to policy changes provide a strong incentive to speculate on future policy changes.

Further, it creates the potential for moral hazard in the future. Future lenders (and purchasers of WMP) will look back on this policy and conclude that the government may well undertake backdoor bailouts if the companies they have lent to run into difficulties. This is hardly conducive to prudent lending and investment.

This is not foresighted policy. It is extemporizing to fix near-term problems, most of which were created by past measures to fix near-term problems. There is a Three Stooges aspect to the entire endeavor.

Of course, it’s an ill wind that blows no one any good. Glencore is no doubt very grateful for Chairman Xi’s heavy-handed policy intervention. It has probably played a larger role in bringing the company back from the brink than did the company’s prudent efforts to cut debt. But it is probably too late, alas, for Peabody Coal, and Arch Coal, and all those “coal people” whom former empathizer in chief Bill Clinton mocked last week. The ingrates!

The bottom line is that China is the 800 pound gorilla of the commodity markets, and shifts in its policies can lead to huge moves in commodity prices. Given that these policy shifts are driven by the crisis du jour (e.g., commodity producer shakiness threatening to make banks and local governments shaky) rather than good economics, and that these policy shifts are difficult to predict given the opacity and centralization of Chinese decision making, they add to substantial additional volatility in commodity prices and commodity markets: who can read the gorilla’s mind (which he changes often)?, and woe to those who read it wrong.

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August 17, 2016

Michael Weiss Makes the Case for the Importance of the DIA Document

Filed under: History,Military,Politics — The Professor @ 7:23 pm

Michael Weiss essayed a lame (but I repeat myself) attempt of a rebuttal of the DIA document I wrote about over the weekend: Weiss’s response was apparently sparked by the fact that Sputnik (and not me!) gave the document attention. (It came out in June 2015, not last May as I had thought.)

Weiss’ piece is classic in the annals of farcical reasoning and logical fallacies. His complete failure to address the document and its implications betrays just how damning it is to his cause. If this is the best e’s got . . .

Weiss started out his attempted rebuttal with one of his specialities, an ad hominem attack:

At the time, this document was taken up with similar if paradoxical enthusiasm by far-left anti-imperialists (such as the Guardian’s Seumas Milne, now Labour leader Jeremy Corbyn’s spin-doctor) and anti-Muslim reactionaries (such as Pamela Gellar) as proof of a nefarious conspiracy led by Washington to encourage a takfiri takeover of the Levant.

None of which has anything to do with the substance of the document.

Weiss then quotes the report:

“If the situation unravels there is the possibility of establishing a declared or undeclared Salafist principality in Eastern Syria (Hasaka and Der Zor), and this is exactly what the supporting powers to the opposition want, in order to isolate the Syrian regime, which is considered the strategic depth of the Shia expansion (Iraq and Iran).”

He fails to mention that this prediction was made in 2012, and it came to pass, almost exactly. That does speak to its credibility, no?

Weiss scorns the idea that the document was “secret”–putting that word in scare quotes. Well, it was classified as . . . SECRET/NOFORN. I guess that kinda makes it officially secret, eh? He also notes the heavy redactions. So what? Does he have any reason to believe the redactions contradict the opinions that are not redacted–which are not qualified in any way? It is far more likely that the redactions include classified information that supports the conclusions that are expressed in the underrated portions.

Weiss then tries to dismiss the report as just one of many reports turned out by the Washington paper machine:

As The Daily Beast’s Jacob Siegel reported when the document was published, appraisals such as these are too numerous count at the Pentagon, much less be read by senior military or policy planners. And few ever rise to the level of adopted policy prescription.

Nor did this one, as anyone who has watched events unfold in Syria over the last four years can easily determine for himself.

This is an inversion of the importance of the document. The reason that the document is damning is precisely that it was ignored by the administration. The DIA writes a hair on fire warning to the security establishment, and the warning is utterly ignored, with the result being that the dire predictions it made came to pass. Whereas Weiss attempts to claim that the fact that the document was ignored means that it is irrelevant, this is precisely what makes it relevant, and damning to the administration. It either ignored its predictions that were borne out in blood, or it was actually complicit in the Salafist-supporting policy that the document describes.

Weiss then plays a shell game with the chronology:

If the United States had sought to rob Iranian clients and proxies of strategic depth in Syria, then it would plainly not be “de-conflicting” at present with the Syrian and Russian air forces, both of which are providing close air support to those same clients and proxies on the ground.

The document was written in 2012. The “de-conflicting” with Syrian and Russian air forces began in 2015. Much water has passed under the bridge in that time, including Obama’s classic walkback from the “redline” on Assad in 2013, the Iran nuclear deal in 2015 (and the negotiations leading up to it in 2014), the farcical collapse of expensive US efforts to train Syrian rebels, and most importantly the spectacular rise of ISIS in 2014-2015 that the DIA document so presciently predicted. The situation is so different now that current administration policy in no way implies that it was not allying with Salafists in 2011-2012 in an attempt to bring down Assad. At that time, the administration was also crowing about its “success” in Libya, and looked to repeat it in Syria. Now it wants to be completely shed of the situation. Four years of failure will do that.

Weiss finishes with another bait-and-switch:

Moreover, given the president’s well-known reluctance—criticized by his ISIS “co-founder” Hillary Clinton—to substantively aid and arm nationalist Free Syrian Army rebels in 2012 (when the document was drafted), one could argue his policy has been the very opposite of what’s in this document.

The bait-and-switch is that the DIA document doesn’t talk about US support for Weiss’ beloved and allegedly moderate, non-sectarian FSA: it talks about the “supporting powers” favoring Salafists, including AQI, the predecessor of ISIS: the FSA is not mentioned. It is well known that the Gulf states pumped large resources into these groups. Turkey is also clearly implicated (as another leaked report, this one from German intelligence, asserts). The US was clearly aligned with these nations in the objective of “Assad must go”, and indeed, the lukewarm support for the FSA actually supports the DIA’s claim that the “supporting powers” (including the US) had put their money on the Salafists, instead of the FSA.

Further, who knows what covert support the CIA was providing, and to whom? Rumors continue to swirl about a weapons pipeline from Libya to Syrian rebels. I have always have found it more credible that the US mission in Benghazi was attempting to intercept weapons on the loose in Libya to prevent them from flowing to Syria, but I am becoming more open to the possibility that the CIA was indeed running weapons from Libya to Syria. The complete silence about what was going on at the CIA Annex there–a silence in which Republicans on the Intelligence Committee like McCain and Graham and Rubio join in–even in the aftermath of September 11, 2012 makes me suspect that the CIA was doing something much more than a gun buyback program intended to help improve the ‘hood.

I also note that Weiss makes no effort to disprove the assertions in the DIA document that Salafists dominated the Syrian opposition from the beginning. This is important because Weiss made a name for himself by playing war tourist in Aleppo, claiming that he was visiting moderate rebels, and because ever since he has been spinning the tale of a moderate opposition that was abandoned by a feckless US. If the revolution was Salafist from the get go, Weiss comes off as a fool and useful idiot at best, and a collaborator with Islamists at worst. His silence on this point in the DIA document speaks volumes.

In short, Michael Weiss makes a great case for the importance of the DIA document by failing so miserably in his lame attempt to make a case against it.

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August 14, 2016

Obama & Hillary Enabled ISIS. Trump? Putin? No–the Defense Intelligence Agency

Filed under: History,Military,Politics — The Professor @ 11:26 am

Although it is hyperbole to say that Obama and Hillary Clinton “founded” ISIS, there is little doubt that they certainly enabled its dramatic expansion. Obama’s mishandling of the American withdrawal from Iraq (scathingly documented in “Losing Iraq“, a production of the notoriously right-wing PBS Frontline) and his passivity as ISIS mounted its major drives in late-2013 and early-to-mid-2014 were necessary to ISIS’s dramatic expansion.

A declassified Defense Intelligence Agency document, made public by Judicial Watch in May, makes clear that DIA was aware of what was going on, and predicted what transpired with uncanny accuracy. More disturbingly, the document can be read to suggest that the administration willingly supported jihadist elements in Syria–including ISIS–as part of its “strategy” to oust Assad.

Insofar as predictions are concerned, these excerpts from the document (which is heavily redacted) speak for themselves:

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That’s pretty much exactly what happened.

The timing is rather awkward for the administration.

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This is exactly the time, mind you, that Joe Biden was strutting around claiming that Iraq was the administration’s greatest foreign policy achievement.

Please spare us any more such successes. A few more like them and we’ll be ruined.

Note too in particular the arrow of causality here. Supporting the insurgency in Syria blew back into Iraq, and advanced the Sunni uprising that has convulsed the country in the past four years. Meaning that the administration supported actions in Syria that destabilized Iraq precisely when it was cutting US forces there that had been essential to maintaining the country’s tenuous stability.

What is more disturbing about the document is its statements about the relation between the rise of ISIS and US policy regarding the Syrian revolution. First, the memorandum forthrightly documents that from the very beginning, the Syrian revolution was predominately jihadist in nature:

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It is not possible, therefore, to argue that once-upon-a-time there was a non-jihadist, secular, and moderate opposition in Syria that was supplanted by extremist elements only because the West did not push out Assad.

What is even more disturbing is the DIA’s statement that it was US policy, in conjunction with its “allies” in the region like Saudi Arabia, Qatar, and Turkey, to support these jihadist elements. For the very next point states:

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Read “C.” above carefully. “[T]here is the possibility of establishing a declared or undeclared Salafist principality in eastern Syria. . . . this is exactly what the supporting powers to the opposition want, in order to isolate the Syrian regime, which is consider the strategic depth of the Shia expansion (Iraq and Iran).”

Recall that the memo specifically identifies “the West” as a supporting power. Further recall that this is the time when “Assad must go” was Obama’s mantra.

This puts an entirely different gloss on Obama’s insouciance towards ISIS during this period. It is clear that the Gulf States and Turkey were all in with Salafist elements. DIA makes the US firmly complicit in this, at the very least via an act of omission (failing to oppose the actions of the regional Sunni powers), and more plausibly as an act of commission.

Understanding the necessity of reading between the lines in an official intergovernmental communication like this, it is clear that DIA is essentially telling the administration (this Secret document was distributed to Hillary and Obama, among others) that it is engaged in a dangerous policy. This is the DIA’s demarche protesting administration Syria policy. One can only imagine what is in the redacted bits.

At the very least, even if you do not believe that the public portions of the document adequately support the charge that Obama and Clinton deliberately supported the rise of ISIS as a matter of policy, it does show that they were forewarned of what was happening and did nothing to stop it. This implies either complicity in the machinations of the policy of the Gulf states and Turkey, or analytical incompetence.

Remember, this is a document prepared by a part of the US intelligence establishment, not the Russians. But it strongly echoes many things that Lavrov and Putin said at the time, and have said since.

There are other interesting aspects of the document that are illuminating. In particular, it gives the lie to claims by Michael Weiss and other anti-Assad, Salafist-supporting Neocons that Assad created ISIS to divide the opposition.

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Paragraph “B.” is of particular relevance. Please take this into account when reading future deep thoughts by Weiss et al about the nature and origins of the anti-Assad opposition, and the necessity of taking down Assad.

This internal US intelligence document clearly lays great responsibility for the rise of ISIS at Obama’s feet. This document is not hindsight brilliance and ass-covering: it is foresight and forewarning.

The document also reveals the utter incoherence of US policy in the region. The ostensible rationale for trying to topple Assad (and this was certainly the motivation of the Gulf states) was that his regime was a supporter of Shia infidels, notably Iran and Hezbollah. And there is a realpolitik logic in attacking Syria as part of a campaign against Iran. But during this time the administration was also working on a rapprochement with Iran. Square that circle for me.

One other thing. This document came out in May. Have you heard of it? Almost certainly not. I hadn’t, until an ex-intel guy on Twitter made me aware of it.

If something analogous had been about the Bush administration circa 2005, and had been released while he was still in office, it would have been the subject of non-stop frenzied–nay, hysterical–coverage. But even while the war on ISIS goes on, and ISIS and ISIS sympathizers launch terror attacks in the US and Europe, and the sectarian war in Syria drags on, this document that places considerable responsibility for ISIS’s rise on the shoulders of the current president, and the Democratic nominee to replace him, gets no coverage whatsoever. This utterly damning document speaks directly to Hillary’s mindset and competence, yet it has been consigned to the memory hole by a media that is intent on ensuring her election.


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July 24, 2016

Hypocrites for Hillary

Filed under: History,Politics — The Professor @ 12:17 pm

The hysteria about the DNC hack and the frenzied efforts to focus blame on Putin and Russia have brought to the fore many anti-Russian/anti-Putin types who are so revolted by the prospect of a Trump presidency (in part because of Trump’s alleged admiration for Putin) that they have come out foursquare for Hillary. Most notable among these is Garry Kasparov. Neocons like Robert Kagan too. Journalists like Julia Ioffe of the Washington Post and Miriam Elder (formerly Moscow correspondent for the Guardian, now with BuzzFeed) qualify, as do myriad other journalistic and think tank pilot fish who are not really deserving of mention by name.

But here’s the funny thing. One of this crowd’s main indictments of Putin is his corruption and venality. They have a point about that, but if corruption and venality are reasons to detest a politician, how can they then turn around and support Hillary? For she is corrupt and venal as they come in American politics.

There are actually some similarities in Vladimir’s and Hillary’s trajectories of corruption. Putin’s schemes began not when he was at the center of power in Moscow, but when he was a functionary in the administration of a regional official, the mayor of St. Petersburg. Hillary’s career as a grifter also began in the sticks, when she was First Lady of Arkansas.

For who can forget cattle futures? Some years ago some academics calculated the odds that the typical trader could have turned $1000 into $100,000 in such a short period of time with such a high frequency of winning days. What were those odds, you ask? A mere 31 trillion (with a t!) to one. Yeah. It could happen to anyone who read the WSJ (which didn’t have a commodities page at the time, mind you).

Now you tell me. Would you have stopped trading if you were that good–or on that good a roll? As if: nobody would. But if these profits were part of a scheme (e.g., buying and selling the same contract, and allocating the winners to her account and the losers to the briber’s account) to pay off $100,000 to the governor and/or his wife, you’d have to stop as soon as that number was hit. So both the making of the money, and the stopping of the even trying to make more money, are damning.

Then of course there was Whitewater and Castle Grande, for which Hillary did legal work–and the developers went to jail.

Like Putin, Hillary went from the sticks to the center of power in the capital in one leap. There’s no indication that Hillary profited directly from her position in the White House, but the entire eight years of the Clinton presidency was a litany of stories about dodgy campaign finance schemes. Ironically, given Hillary’s harrumphing about the audacity of foreigners influencing American elections, the 1996 Clinton campaign assiduously courted foreign donors attempting to influence American elections–in anticipation of seeing their favors repaid by the winner.

After leaving the White House, Hillary complained of her straitened financial circumstances. Those soon changed, through the magic of her “charity”–the Clinton Foundation. The main beneficiaries of this “charity” have been herself, Bill, and daughter Chelsea. It is notorious for raising large amounts of money, very little of which goes to the causes (e.g., earthquake relief in Haiti) for which it was ostensibly intended–and large amounts of which go into salaries, travel, and “overhead.” Then there are passing mysteries, like how Bill gets paid $16.5 million dollars over a few years for being the “honorary” chancellor of a for profit education company (that is closely linked with George Soros).

With considerable justice, Putin critics look askance at his purported fortune and claim that it is evidence of his deep corruption. How can you possibly not say the same of Hillary’s wealth? For the Clinton Foundation was collecting tens of millions of dollars in contributions from corrupt governments (especially in the Middle East) at the same time as Hillary was dealing with these governments as Secretary of State. Purely a coincidence, no doubt! The Saudis are deeply, deeply concerned with the long-suffering Haitian people, aren’t they?

The nexus between the Clinton Foundation and Hillary’s role as Secretary of State shows a complete disregard for appearances of impropriety and conflict of interest, and reeks of pay-for-play. Indeed, one of the leaked DNC emails frets that “Clinton Foundation quid pro quo worries are lingering.” The DNC feared that more than her secret emails.

Such blurring of the lines between private interest and public office is also evident in Putin’s Russia, where Putin’s friends  (like the Rotenbergs and Gennady Timchenko) have profited handsomely in deals with the Russian state. There is of course suspicion that Putin shares in these windfalls. There is no suspicion that Hillary’s foundation has received windfalls from  governments with whom Hillary dealt as Secretary of State: it is a documented fact.

Hillary did her part as a high-ranking member of The Most Transparent Administration in History® by having meetings with donors, and then either (a) not recording these meetings in her schedule, or (b) the most recent revelation–burning her schedules! If there’s nothing to hide, why go to such lengths to hide them? (We can of course be completely confident that emails deleted from her private server contained only yoga routines and wedding plans, and no communications with foreign governments or their agents who are donors to the Foundation.)

Putin’s opacity is of course another subject of criticism amongst the Putin hating/Hillary loving crowd. Yet he has nothing on Hillary in that department. The entire email scheme was a pre-planned, preemptive coverup to prevent the release of information that could be used to hold Hillary to account. Putin also clearly understands the importance of the control of information.

And of course, when it comes to Russia in particular, how do Kasparov et al square their support for Hillary with this?:

The article, in January 2013, detailed how the Russian atomic energy agency, Rosatom, had taken over a Canadian company with uranium-mining stakes stretching from Central Asia to the American West. The deal made Rosatom one of the world’s largest uranium producers and brought Mr. Putin closer to his goal of controlling much of the global uranium supply chain.

But the untold story behind that story is one that involves not just the Russian president, but also a former American president and a woman who would like to be the next one.

At the heart of the tale are several men, leaders of the Canadian mining industry, who have been major donors to the charitable endeavors of former President Bill Clinton and his family. Members of that group built, financed and eventually sold off to the Russians a company that would become known as Uranium One.

Beyond mines in Kazakhstan that are among the most lucrative in the world, the sale gave the Russians control of one-fifth of all uranium production capacity in the United States. Since uranium is considered a strategic asset, with implications for national security, the deal had to be approved by a committee composed of representatives from a number of United States government agencies. Among the agencies that eventually signed off was the State Department, then headed by Mr. Clinton’s wife, Hillary Rodham Clinton.

The Canadian behind that deal (Frank Giurstra) and others associated with it have paid a mere $145 million to the Clinton Foundation. More bleeding hearts for Haiti, no doubt.

Indeed, there is a nexus between Rosatom and the email scandal. Politico(!) has documented numerous and extended lacunae in Crackberry addict Hillary’s emails. Most of the gaps are temporal: there are long time periods for which no emails on any subject have been produced. The Rosatom gap is different. During the entire period of her tenure, Hillary personally and the State Department generally were involved in Russian nuclear matters generally  (remember that Nunn-Lugar was operative until 2012) and Rosatom in particular. But despite the fact that there was extensive State Department cable traffic discussing the company, there was one lonely and innocuous email in what Hillary produced:

But then there is an instance where the State Department cable traffic rises and there are few if any Clinton corresponding emails. It’s the case of Rosatom, the Russian State Nuclear Agency: Clinton and senior officials at the State Department received dozens of cables on the subject of Rosatom’s activities around the world, including a hair-raising cable about Russian efforts to dominate the uranium market. As secretary of state, Clinton was a central player in a variety of diplomatic initiatives involving Rosatom officials. But strangely, there is only one email that mentions Rosatom in Clinton’s entire collection, an innocuous email about Rosatom’s activities in Ecuador. To put that into perspective, there are more mentions of LeBron James, yoga and NBC’s Saturday Night Live than the Russian Nuclear Agency in Clinton’s emails deemed “official.”

What could explain this lack of emails on the Russian Nuclear Agency? Were Clinton’s aides negligent in passing along unimportant information while ignoring the far more troubling matters concerning Rosatom? Possibly. Or, were emails on this subject deleted as falling into the “personal” category? It is certainly odd that there’s virtually no email traffic on this subject in particular. Remember that a major deal involving Rosatom that was of vital concern to Clinton Foundation donors went down in 2009 and 2010. Rosatom bought a small Canadian uranium company owned by nine investors who were or became major Clinton Foundation donors, sending $145 million in contributions. The Rosatom deal required approval from several departments, including the State Department.

When you’re the Dem darling, and you’ve lost Politico . . . . But she hasn’t lost the loudly anti-Russian, anti-Putin crowd, despite the fact that the stench of this particular Russian connection would make even a Rotenberg gag.

Oh, and Bill Clinton was paid $500,000 by Renaissance Capital, a Russian investment bank controlled by oligarch Mikhail Prokhorov. Clinton said “I’ve gotta pay the bills.” I guess baby’s too old to need new shoes. But the anti-Putin Hillary hive bats not an eye.

Putin critics also attack him-with good reason-for his high handed approach to the law. Who can witness what Hillary has done with regards to her server and her handling of classified information before, during, and after the fact and not conclude that she is lawless too, and also believes herself to be above the law? (FBI Director Comey’s excuse for her conduct is mental defect: she’s was too stupid to form criminal intent. He said this the day after Obama claimed that she is the most qualified candidate for the presidency since Jefferson. Maybe he meant George.)

Her complicity in the jailing of a hapless filmmaker to deflect attention from her failings in Benghazi also has more than a slight Russian smell to it: the case of the wife of a Kursk crewman who was tranquilized and bundled off while protesting against the Putin government’s handling of the sinking comes to mind. Going back to the beginning of her public career, Hillary’s desire to run roughshod over the law  was noticed during her time as a staffer on the House Judiciary Committee during the Watergate investigations. Legal nihilism is a term often used to describe Russia (Medvedev employed the term, in fact): it would be a fair way of describing Hillary’s attitude to the law.

When campaigning recently with Hillary in Charlotte (complete with a break from tradition by allowing her to speak from a podium displaying the Presidential Seal), Obama praised her for dedicating her life to public service. Whenever I hear that phrase, I reach for my wallet with one hand, and a airsickness bag with the other. This is particularly true when the alleged public servant is Hillary Clinton, who has served herself first, last, and always, grasping for more power, and more money. Putin, of course, often portrays himself as a mere humble servant, toiling ceaselessly for the benefit of the Russian people, for which he is paid a pittance. Both inveigh against the greed of others, while having fared quite well themselves. Both claim they are advocates for the little guy, while doing all they can to avoid actually spending any time with them.

I can understand disliking Putin, including because of his venality, corruption, lack of transparency as a public official, and disregard for legal norms. But if those Putin traits outrage you, you have to be outraged by Hillary too. Indeed, Putin is the product of a system that is notoriously corrupt and where the rule of law is more of an object of derision than an ideal. Hillary is contending for the highest office in a nation that believes that it operates according to a far higher standard (though her getting a pass for her flouting of the law with her private server calls those pretensions into serious doubt). For all his sins, Putin is not nearly the hypocrite Hillary is. And her coterie of Putin-hating supporters are as hypocritical as she.

Hillary’s Putinesque corruption and mendacity should be disqualifying. Her incompetence should be as well. She took pride in Libya, for crying out loud, and that was only one of the things that makes her the Mr. Magoo of international statecraft, merrily and blindly plunging ahead while leaving havoc and destruction in her wake.

But as shocking as these disqualifications are, they might not represent the greatest danger that she poses–which happens to be the very thing that attracts the neocons in particular to her, despite their professed dislike for Putin. As Libya demonstrates, Hillary is an adventurer with a predilection to intervention–another similarity with VVP (and whom the neocons berate for it). During her tenure at State, she had a reputation for advocating a far more truculent foreign policy than Obama. Libya is one example. Since her departure, she has been an advocate for a more muscular approach to Syria. In contrast, Trump has expressed skepticism about American intervention abroad.

The prospect of a corrupt, dishonest, not too bright, and demonstrably incompetent person as president should give anyone pause, especially so to alleged policy mavens. But neocons are overlooking all that, because she is the best prospect to give them the interventions-and wars-they want.


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Hillary Doubles Down on Blame Putin! Fat Lot of Good It Will Do Her.

Filed under: History,Politics — The Professor @ 11:57 am

Hillary is officially going with the Putin Did It! strategy to distract attention from the DNC leak. This follows official DNC response of the initial reports of a leak which says the leak may be part of a “Russian disinformation campaign.”

No one from the Clinton camp or the DNC has disputed the veracity of the material released. So we have a novel theory: the leaking of actual information is disinformation. I’ll have to remember that one. It might come in handy someday. Again, though, two! two! two! logical fallacies in one: ad hominem and appeal to motive.

Clinton better get the spin machine in prime condition, because the really good stuff might be on its way: the Clinton Foundation emails were also hacked.

Let the games begin!

Pause a moment, though, and consider this. On the one hand, Hillary blames the Russians for hacking the DNC. On the other hand, Hillary claims that her private server was immune to hacking and had never been hacked.

Yeah. That’s believable.

I mentioned Hillary’s flying monkeys yesterday, and indeed, they are swarming out of the castle as we speak, screeching that Trump is Putin’s bitch. Prominent examples include Josh Marshall and Jeffrey Goldberg. (With Obama leaving, Goldberg is busy finding another throne to sniff.)

Politically I think this is a non-starter. Most Americans don’t really give a damn about Russia. They are not enamored with it, but they don’t dread it either. It doesn’t haunt their thoughts the way that it did in the Cold War. This in fact is something that drives the Russians generally, and Putin in particular, crazy. They would much rather be hated and feared than ignored: the irrelevant are ignored, but if you are feared, you matter. The Russians want to matter. They don’t to most Americans, which will mean that Hillary’s invocation of the Russian bogeyman will likely have little effect.

In the meantime, though, I am sure Putin is basking in the attention.

But what else does she have? Zip. So she’s gotta go with what she’s got.

It is also quite rich for Hillary to bemoan foreign influence on elections. For one thing, she is the woman who brought us Johnny Chung, Maria Hsia, James Riady, and John Huang. For those of you not of a certain age, these were sources of big (and illegal) foreign donations to the Clinton campaign in the mid-1990s.

For another thing, Bill Clinton was intensely involved in influencing the Russian presidential election in 1996. He took the “just win, baby” mindset to Russia, and frankly stated that the end (re-electing Yeltsin) justified any means:

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The irony in all that is just too much, especially the turning a blind eye to Putin’s elevation part.

As for the conventional wisdom that Putin favors Trump, I am a contrarian. Trump is mercurial, unpredictable, and protean. He has been on every side of every issue. Anyone who believes that he can predict what Trump would do in office is deceiving himself. His current statements are probably the least reliable guide to his future actions. No one, least of all Putin, can have any confidence in predicting what a Trump presidency would be like. Even if he makes equivocal comments about Estonia today, he could turn around and send a division there when in office.

Hillary, on the other hand, is predictable, stupid, predictably stupid, and stupidly predictable. Putin has run rings around her before, and should be licking his chops at the prospects of doing it again.

The only reasons for Putin to favor a Trump election are that he wants more of a challenge, and he’s long gamma and hence relishes volatility.

Regardless of what Putin’s views are, facts are facts. Whoever leaked the DNC emails leaked facts. Moreover, it cannot be argue that the leak was selective, and thereby misleading: everything dropped. More leaked facts are almost certain to come, from the Clinton Foundation and perhaps even Hillary’s private server. And regardless of their provenance, the facts are damning.

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July 19, 2016

Paths to Redemption and the Differential Susceptibility of Religions to Terrorism

Filed under: Economics,History,Politics — The Professor @ 6:57 pm

Many human conflicts and struggles are universal, but they manifest themselves very differently in different cultures. One universal struggle is between religion and morals and carnal desire. Religions and cultures differ in how sins can be redeemed, and this strongly shapes how this conflict is resolved.

In evangelical Christianity, one manifestation of this struggle is extreme hypocrisy. As La Rochefoucault said, “hypocrisy is the tribute [or homage] that vice pays to virtue.” Public acknowledgement of sin, pledges of a devotion to Christ as the redeemer of sins, and efforts to bring other sinners to Christ are all paths to redemption. The greatest sinners, and those upon whom sins weigh most heavily (in large part because they have internalized the religion’s moral code), are often the most profuse in their public acknowledgements, most intense in their pledges, and most driven in their evangelizing efforts. This is what produces types epitomized in fiction by Elmer Gantry, and in real life by the likes of Jimmy Swaggert. Bible thumpers in public, drunkards and perverts in private.

For many Muslims, martyrdom in jihad against infidels is a path to redemption of sin. Many strongly believe that dying while killing in the name of Allah is a get out of hell free card.

This comes to mind after reading a story about the mass murderer in Nice, who was apparently violent, a drug abuser, a man with an “out of control sexual life” (including bisexuality–with septuagenarians!), and a violator of Muslim dietary strictures. His sordid and dissolute and unobservant life is being seized upon to claim that since he “did not practice the Muslim religion,” Islam is absolved of any role in his heinous acts, and could not have been his motivation.

To the contrary. The fact that Muslims believe that martyrdom in waging jihad against infidels is a path to redemption means that a widely-held set of Islamic beliefs contributes directly to the murderous acts of  men like Mohamed Bouhlel. It is precisely those whose sins are so great who are most in need of redemption, and who are most likely to turn to suicide terrorism as a means of obtaining it. That’s a path offered to them by their culture and religion.

Such tortured individuals are the most susceptible to the proselytizing efforts of ISIS and its ilk. These are the people who are most vulnerable to online radicalization. These are the people who are the perfect prey for radical recruiters who can readily exploit the intense cognitive dissonance of the extreme sinner who wants to be a good Muslim.

I therefore hypothesize that suicide terrorists and recruits to terrorist groups will be disproportionately “bad Muslims”: criminals, heavy drug users, and sexual deviants (where deviance is defined by Muslim mores). An unsystematic recollection of some notable cases (e.g., the 911 hijackers) provides support to this hypothesis, but it deserves more systematic testing. (There is conflicting information on whether Orlando shooter Omar Mateen is consistent with they hypothesis.)*

Violent, drug abusing, sexual deviants are less of a concern when they are utterly amoral, and uninterested in redemption in the confines of any religion: they harm mainly themselves, a small circle of people around them, and sometimes an unfortunate stranger. They become dangerous when such people believe in a religion that offers redemption through violent action. Then large numbers of random strangers are at risk. Eighty-three corpses in Nice are only the most recent example of that.

Religions differ in the ways that they allow adherents to resolve the conflict between belief and sinfulness, and the way that Islam allowed Mohamed Bouhlel to resolve his conflict poses a grave risk to the societies in which men like him live. Europe generally, and France in particular, are at great risk because they have large populations of young, unattached, and alienated Muslim men with high rates of criminality, drug abuse, and other anti-social behaviors. Combined with ubiquitous online proselytization and a network of (often very ascetic) recruiters (including recruiters in prison), this is a combustible mix. This population isn’t going anywhere, and in fact is growing due to Europe’s immigration choices, economic malaise, and demonstrated incompetence at integrating immigrants. Islam isn’t going anywhere either, and shows no signs of leaving behind martyrdom as a path to redemption. To the contrary, Wahhabism and other fundamentalist strains of Islam are ascendent, due in no small part to massive Saudi spending to spread them.

Connect these dots, and you draw a very disturbing picture. Neither of the two things that combine to create terrorism are readily amenable to change, and if anything appear to be growing in virulence. That portends ill for the future, not just in France, but world-wide.

* There can be another causal mechanism that would create such a correlation. A game theoretic explanation of strictures against suicide in Catholicism where sins can be absolved by confession is that absent eternal damnation for suicide, one could commit mortal sins to one’s heart’s content, confess, commit suicide immediately afterward, and go to heaven. Thus, damnation for suicide is necessary to make afterlife punishments for other sins a credible deterrent when confession absolves sins. If martyrdom while committing a terrorist act absolves one for other sins, the punishments for these other sins are less credible, and they are more likely to be committed, and martyrdom through violence is also more likely.


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June 26, 2016

Brexit: A Case Study in Preference Falsification

Filed under: Economics,History,Politics — The Professor @ 6:23 pm

About 20 years ago Timur Kuran wrote Private Truth, Public Lies. The book introduces the concept of preference falsification, whereby social pressure induces people to make public statements that are contrary to their private beliefs or preferences.

Preference falsification helps explain why revolutions, especially in totalitarian countries, or in oligarchic societies with substantial hierarchical social control, seem to come from like a bolt from the blue. Because of preference falsification, widespread dissatisfaction is concealed. In response to some shock–which can be very minor–people reveal their dissatisfaction or anger simultaneously, resulting in a revolt or civil unrest.

There is a coordination game aspect to the transition between passivity and revolt. People will reveal their preference by going into the street only when they are convinced that enough other people share their views. Widespread falsification makes it difficult to know how widespread the dissatisfaction is, and tends to cause people to remain quiet and at home. But if something triggers enough people to reveal it, a cascade is triggered and the equilibrium flips from no one revealing to everyone revealing.

In the UK, it is clear that numerous individuals were concealing their true preferences about Leave vs. Remain. The elite in the UK, and the EU as a whole, mounted a campaign of insult and intimidation. They had no positive message, but engaged in fear-mongering and ad hominem. Any brave soul who put his or her head above the parapet was immediately subjected to a barrage of invective. So many people stayed hunkered down, and concealed their preferences.

Social control worked, in one sense: it kept people’s mouths shut. But unlike the revolutionary situation, there was no coordination problem, and no need for a spontaneous and simultaneous recognition that the socially ostracized beliefs were in fact widely shared in order to spark action. The Referendum allowed people to express their preferences privately, and to keep them private if they chose. People felt compelled to stifle expression of their preferences in public, but could do so in a way that did not expose them personally to obloquy if they chose not to reveal their vote. They didn’t have to coordinate, which is the main impediment to translating dissatisfaction into action. The Referendum made it easy.

Although the mechanism was somewhat different, the result was the same: an outcome that completely shocked the elite at the top of the social and power hierarchy.

Indeed, I would say that the attempt to exert social control actually affected preferences. The bullying and scorn and insult from the Remain crowd revealed a lot about who they are and what they think of those who are not them. I think it is highly likely that many who might have actually been favorably disposed to the Remain side looked at that and said: “Are these the kind of people I want running my life? Hell No!”

The unfalsification of preferences that the vote allowed is why its effect was so cataclysmic. The smug priors of the better-than set were hit by an avalanche of information about preferences. Their confidence in their popularity, and in the shared belief in their superiority, has been shattered. They now have to update their beliefs about their popularity and standing in the rest of the EU.

In a sense, the British have done the Eurogarchs a favor, by giving them a big dose of reality that should shake them from their reveries. They have time to absorb this information and adjust course.

I predict that they will not. The initial reaction–doubling down on the scorn–is a pretty good indication of that. Furthermore, they seem to be finding all sorts of ways to rationalize the outcome, and suggest that it was a one-off that reflected English (and Welsh) eccentricity.

Good luck with that.

Now the Eurogarchs are confronted with a rather daunting choice. Do they risk referenda (or other means of expressing popular preferences about the EU and its current course) in other countries? That would reduce the cost of revealing true preferences, and risk a Brexit-like outcome. But if they refuse to countenance democratic means of preference expression, the preference revelation could come in a much more destructive and violent way, through civil unrest or outright rebellion.

Societies that rely heavily on social control to induce uniformity in the expression of opinion are inherently brittle. They tend to be tidier and more orderly than societies that don’t, but more expression-tolerant societies provide means for people to blow off steam, and more importantly, to give those in government information that can induce them to change course before alienation becomes too extreme. This makes the tidy, orderly, tightly controlled societies more vulnerable to sudden and severe breakdown.

The great cultural, linguistic, and economic heterogeneity of the EU means that greater pressure is required to create homogeneity in expressions of opinion about political issues. Even greater pressure is needed when there is a big shock that raises questions about the competence of the leadership, and its consideration for the opinions of those they rule. Europe has experienced two big shocks–economic malaise, and perhaps more importantly, the refugee crisis.

This means that the EU is particularly vulnerable to preference falsification at present. It is also acutely vulnerable to a shattering of its brittle structure when those preferences are revealed. For this reason, I would say that the expectation should be that the EU will muddle through, but there is a substantial tail risk that it will shatter into 28 pieces. And when it does, it will not go with a whimper, but a bang.

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June 14, 2016

The American Bourbon Talks Terrorism

Filed under: History,Military,Politics — The Professor @ 6:49 pm

I have often described Obama as an American Bourbon (as in Louis XVIII, not Old Granddad): he has learned nothing, and forgotten nothing. No single thing exemplifies this more than his stubborn refusal to blame radical Islam for the latest outrage, this one in Orlando.

Obama claims that his rationale is that he does not want to allow ISIS to claim that the US is at war with Islam. Well, that’s the whole point of adding “radical” as a modifier. It is to demonstrate that we do not have an indiscriminate hatred or fear or even dislike of all Muslims. Obama’s refusal to make this distinction suggests that he thinks that Muslims are too stupid to recognize that. Or perhaps he thinks so little of Americans that he doesn’t believe that we are truly capable of making discriminating judgments, and that he really believes were are all closeted–or not so closeted–Islamophobes. He’s insulting either Muslims, or Americans, or more likely both.

Regardless, would that there were a latter-day Talleyrand who would lean over to Obama and say: “But sire, they are most decidedly at war with us.”

Keynes once said  “When the facts change, I change my mind. What do you do, sir?” If Obama was his interlocutor, the reply would be: “Nothing. I am never wrong, and no new facts can contradict my original conclusion.” That’s exactly what leads to the Bourbon forget nothing-learn nothing syndrome.

Here’s why Obama’s mulishness is intensely unsettling to most Americans. They believe that his refusal to acknowledge a plain-as-the-nose-on-your-face fact has led to a conscious policy of ignoring threats for fear of offending Muslims. Orlando just provides more grist for that mill.

The shooter, Omar Mateen, flew more red flags than a Soviet May Day parade. The FBI investigated Mateen twice, and interviewed him three times. He had interacted with an American who went to Syria to become a martyr for ISIS. He was involved with Marcus Robertson*, a well-known jihadist and radical cleric who had been a bodyguard for the “Blind Sheikh.” He had attended an extremist mosque. He was well-known at his work for making extremist remarks.

But the FBI said “move along, nothing to see here!”, and the investigations were dropped. In the aftermath of Fort Hood (“workplace violence”), the dismissal of the investigation of the Tsarnaevs, and other episodes of denial and avoidance, people have a clear sense that Obama has made it plain to everyone below him in the chain of command that even the perception of Islamophobia is a far graver sin than letting a potential mass-murderer walk free–and it’s a career killer to boot.

It’s not just the refusal to utter the words “radical Islam” that conveys this message. “We can absorb attacks.” “ISIS is not an existential threat.” “You are more at risk of dying from a fall in your bathtub.” All of these send a message: Obama believes that Americans have an inordinate fear of terrorism.

Easy for a guy who drives around in an armored limousine called “the Beast” to say, isn’t it? Guy in an Orlando night club–not so much.

Yes, the probability of dying from terrorism is small. But people are rationally averse to low probability, extremely adverse events. And the question is whether these events can be prevented or deterred at reasonable cost, and whether it is the government’s responsibility to do so. Most Americans think yes. Obama evidently thinks no, or that the cost of perceived Islamophobia outweighs the benefit of preventing a mass murder or two.

It’s hard to believe, but the refusal to say “radical Islam” was among the least offensive things that Obama said today. He had the temerity to claim that attacks like Orlando are proof that ISIS is losing on the battlefield. As if there what happened in Orlando (or San Bernardino) involved the redeployment of any ISIS resource in Syria or Iraq, or that ISIS has no independent reason to attack the US. (I remind you that in his “ISIS is the jayvee” period, Obama asserted that ISIS had no intention of attacking the West as a reason for his insouciance. Wrong again, Carnac.) Further, he touted the 13,000 air strikes. Bean counting bullshit. How many strikes have been aborted? How many times has LBJ II vetoed a target? What is the operational impact of these airstrikes? Why was the air campaign so desultory for so long? Why has ISIS been given years of breathing room?

Obama has theories about Islam and terrorism. He has long held those theories, and he adamantly refuses even to modify them even in the face of a torrent of evidence. And pace Jefferson Davis, Americans have strong grounds to believe that many of their fellow citizens have died of that theory, including 50 people in a night club in Orlando.

* Robertson was interviewed this evening by Greta van Sustern. Considering it was an interview with a sick bastard who wants us infidels dead, it did have its amusing moments. Among other things, Mr. Robertson gave his weighty opinions on the presidential race. Among his pearls of wisdom was that Hillary would be dangerous as a president because as a woman she might get angry during her menses, and push the button.

Perhaps Mr. Robertson is a little bit shaky on the realities of the female reproductive system (which seems to be the case with most fundamentalist Muslim clerics), but I am pretty sure that Hillary is well past the age when menses, or even menopause, can have the slightest effect on her behavior.

Who wants to break the news to him? It could change his vote!



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June 12, 2016

More Media Idiocy and Dishonesty on Venezuela (and Climate Change)

Filed under: Climate Change,Economics,History,Politics — The Professor @ 12:12 pm

Venezuela’s economic and social collapse brings out the most idiotic “reporting” and commentary from the mainstream media. They are desperate to explain away the catastrophic failure of an avowedly socialist polity. They are also eager to recruit the country’s crisis to advance other progressive agendas, most notably climate change.

I thought I had read peak Venezuela stupid earlier this week in an Bloomberg article. (More on that below.) But I now know that I have seen peak stupid, because nothing can be more idiotic than this from a New York Times reporter:

And there’s no way that the Venezuelan government could print that much money to keep up with inflation. So what happens – they don’t. And there’s not enough money. There’s a shortage of money, just like there’s a shortage of electricity and water. It means, you know, paying for things and doing everything in your day-to-day life has become very, very challenging.

Hilarious! Who knew that hyperinflation occurs because the there’s “a shortage of money”?

This is New York Times economics “thinking” in a nutshell: that is, 180 degrees from reality.

News for Mr. Casey, courtesy of Milton Friedman: “Inflation is always and everywhere a monetary phenomenon in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output.”

The corollary is that hyperinflation can be produced only by an extremely more rapid increase in the quantity of money.

Boy, I guess money was really short in Zimbabwe a few years ago (inflation rate 79.6 billion percent in 2008–Venezuela has some catching up to do!)

The rest of the interview with Mr. Casey proves that he is not short of economic comedy gold. John Hinderaker at Powerline has deconstructed it thoroughly, so I don’t have to. The implication is blindingly obvious: anyone who relies on the NYT for economic insight can find it only if they follow one rule: conclude the opposite of everything the Timesman (or -woman) says.

One would hope for better from Bloomberg (its Twitter handle is @business, after all), but one would be disappointed. For while the NYT tells you that hyperinflation in Venezuela is due to the lack of printing press capacity, Bloomberg tells you that the crisis is due to the “wilting away of the state.” (Wait–Marx told me that was a feature, not a bug! WTF?)

Yes, the Venezuelan state is collapsing. But it is collapsing not because of climate change or other factors beyond its control. It is collapsing because its previous hyperactivity wrecked the economy and destroyed civil society. Perhaps the adverse consequences of the drought was the death knell, but that was only possible because Chavism had already undermined society’s capacity to absorb another shock. It’s like blaming pneumonia for the death of an AIDS victim. Yeah, it’s what killed him, but it wouldn’t have killed him if his immune system hadn’t already been ravaged.

This attempt to blame Venezuela’s crisis (and Syria’s–the article is a twofer!) on climate change is beyond annoying because it fails to identify honestly the source of the state’s “lack of adaptive capacity”:

“Powerful groups, especially in corrupt states, use their power to capture resources,” says Homer-Dixon. “You get a polarization of wealth, a weakening of state capacity, and urban stress.” Although these kinds of changes are indirect effects of a drought, they are often the tipping point for social conflict. “We are seeing these things around the world now,” Homer-Dixon says. “As environmental stresses get worse, [their effects] become more common.”

Global water shortages are predicted to decrease global gross domestic product by as much as 14 percent by 2050, according to a recent report by the World Bank, which predicts that this “severe hit” will spur conflict and migration across the Middle East, Central Asia, and Africa. Even resource-rich countries previously considered to have stable economies, such as Brazil and Russia, have become more susceptible to environmental disequilibrium. Last year production of coffee, one of Brazil’s most important commodities, fell 15 percent as a result of drought. A lack of rain in Russia this fall damaged a quarter of its cereal crops. The last time the country’s harvest failed, rising global prices contributed to the Arab Spring in countries dependent on imported grain. [What? Um, there have been droughts for like forever. And steep declines in agricultural output are a historical norm. Further, Russian grain output is likely up this year. FFS. Agricultural output variability has been the norm since humans first scratched the ground with a stick. Before that, even: variability in the amount of stuff to gather predates the agricultural revolution.] Even Islamic State’s political power may soon be affected by drought. As water levels in Lake Assad in Syria plummet, Raqqa, the group’s stronghold, is facing severe shortages. Last year, Islamic State’s press officer, Abu Mosa, told Vice News that it would consider attacking Turkey to gain access to additional water resources.

Climate science has an explanation for why environmental forces can have this kind of destabilizing effect. Angel Muñoz, a postdoctoral research associate at Princeton, says, “Risk is just a multiplication of hazard by vulnerability.” Muñoz, who grew up in Venezuela and moved to the U.S. to study climate risk management, explains that a drought is a hazard, but what actually created this year’s mess was Venezuela’s lack of what he calls “adaptive capacity.” The drought was predicted months before it began—neighboring Colombia started water rationing in September 2015. Although Venezuela has far more natural resources than its neighbor, Colombia is not in such dire straits. “A society’s vulnerability is at least as important as the hazard,” Muñoz says.

As a result, when weak states [!] face environmental catastrophes like drought, “you might see the collapse of authoritarian regimes, as you did during the Arab Spring,” Homer-Dixon says. “But they’re probably going to be replaced with something just as bad, because a deeply divided society is still dealing with a materially stressed situation.”

The point is that authoritarian regimes–which invariably use their authority to control the economy and undermine private contract and markets–are brittle. That’s why they have less adaptive capacity. Some shock is the proximate cause (in the USSR, it was the decline of oil prices in 1986), but statist systems are brittle because in their mania for control they destroy the resilience of emergent orders.

Brittleness is different than weakness. The “weak state” formulation suggests a polity like Somalia or Afghanistan where the government’s writ does not extend beyond the capital, if it extends even that far. Or medieval Europe. The problem with Venezuela and Syria is that the state’s writ runs everywhere.

Regardless of the science regarding climate change, and in particular the science of attributing to climate change a particular type of event that has occurred on earth since far before recorded history, it is beyond dishonest and manipulative to ignore the real anthropogenic factor at work here: the destruction of a society’s adaptive capacity by a hyperactive state. If Venezuela is on the brink of anarchy, it is because the state was too strong, not because it was too weak.

What is particularly perverse is that climate change is being used to justify intense statist intervention on a global scale. This despite the fact that as the case of Venezuela (and other socialist paradises) demonstrates, humanity (and nature) have much to fear from a hyperactive state. The Bloomberg article is particularly dishonest because it insinuates the exact opposite.

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May 28, 2016

Obama’s Sly–and Cowardly–Slander in Hiroshima

Filed under: History,Military,Politics — The Professor @ 3:45 pm

Obama gave his long-awaited speech in Hiroshima yesterday. No, he did not apologize for Truman’s decision to drop the bomb. In many ways, what he says was actually worse.

Most of the speech was vapid banalities. War is bad. (Who knew?) War has been part of the human condition since the beginning of recorded history. (Really?)

Most of the rest was moral preening and the uttering of grandiose but completely empty and unrealistic solutions to the scourge of nuclear weapons. According to Obama, nothing short of a “moral revolution” is required.

What, pray tell, in the vast sweep of human history gives the faintest hope that such a “moral revolution” is remotely possible? Perhaps Obama has enlisted the help of invisible magic unicorns. Or angels.

Indeed, given Obama’s track record with gaseous speeches such as these, you might want to become a prepper, rent a backhoe, and start building your bomb shelter. For instance, Obama’s searching criticism of the history of the relationship between the West and the Muslim world, an his soaring call in his Cairo speech for a fundamental transformation–a revolution, if you will–in that relationship ushered in a period of even greater violence in the Muslim world, and a serious decline in the relationship between Islam and the West.

The Middle Eastern dystopia that slouched in the wake of Obama’s Cairo speech makes me shudder for what will follow in the aftermath of this one. Reading Obama’s Hiroshima speech in light of the dismal aftermath of his Cairo vaporings should lead the Bulletin of Atomic Scientists to move the Doomsday Clock to within a few seconds of midnight.

As for why Obama’s speech was in some ways worse than an outright apology, it was an exercise in moral equivalence that did not distinguish between the combatants in WWII, but lumped them into one mass engaged in a conflict that was undistinguishable from the conflicts that mankind has waged since pre-historical times:

The world war that reached its brutal end in Hiroshima and Nagasaki was fought among the wealthiest and most powerful of nations. Their civilizations had given the world great cities and magnificent art. Their thinkers had advanced ideas of justice and harmony and truth. And yet the war grew out of the same base instinct for domination or conquest that had caused conflicts among the simplest tribes, an old pattern amplified by new capabilities and without new constraints.

In the span of a few years, some 60 million people would die. Men, women, children, no different than us. Shot, beaten, marched, bombed, jailed, starved, gassed to death. There are many sites around the world that chronicle this war, memorials that tell stories of courage and heroism, graves and empty camps that echo of unspeakable depravity.

The difference between WWII, and the War of Austrian Succession, say, let alone some unrecorded tribal conflict, is blindingly obvious, and that difference matters. Why people were “shot, beaten, marched, bombed, jailed, starved, gassed to death” matters. And the responsibility matters, and it is indisputable that the responsibility for this ghastly record is by no means equally shared: it rests disproportionately on Germany and yes, Japan. To ignore these fundamental facts is unpardonable. To do so in the context of a speech at Hiroshima insinuates that the act that ended one part of the war was morally indistinguishable from the events that led up to it, and therefore obscures any moral line between those who initiated the conflict and carried it out with horrific brutality, and those who ended it.

Then there is this wretched paragraph:

The wars of the modern age teach us this truth. Hiroshima teaches this truth. Technological progress without an equivalent progress in human institutions can doom us. The scientific revolution that led to the splitting of an atom requires a moral revolution as well.

This suggests in a very Hegelian/progressive way that the dropping of the atomic bomb was the result of some some inexorable technological process that had slipped human control. It is a statement about a historical process that is utterly ahistorical–more of Obama’s trademark historicism, in other words. It does not put the decision in the very specific historical context of the time. It suggests that the decision to drop the bomb was worse than the alternatives, but does so in a cowardly way because it does not address those alternatives and argue that they were better than dropping the bomb.

It also suggests that the man who made the decision was morally defective, and in need of some moral reformation. This is utterly unfair. Truman had a wrenching choice to make.  A decent successor to his office would recognize that, and give it proper deference. But Obama did not do this, and instead continued his tiresome role as a moral titan instructing lesser beings. All in all, an utterly appalling performance, but a totally unsurprising one.

Obama’s amnesia is, unfortunately, widely shared. American attitudes about Hiroshima and Nagasaki have changed dramatically since the war, and no doubt Obama’s implicit condemnation will be viewed favorably by large numbers of Americans, perhaps a majority. In some respects, this reflects the fact that in the experience of most Americans, the Japanese are a peaceful, quiet, diligent and inoffensive people: few are familiar with the bestiality of Japanese conduct from 1931 through August, 1945. Therefore, it is hard for many to comprehend how something as horrific as Hiroshima and Nagasaki could possibly be justified.

But to do this is to totally misunderstand the basic fact that modern Japan and modern Japanese are pacific, benign and enlightened precisely because of the bomb. Only the utter destruction of a militarist society that was enthusiastically supported by the vast bulk of the citizenry, and which spawned untold miseries across Asia, could have turned the Japanese into a pacific people. Nothing short of the bomb (or an invasion that would have led to more destruction and more death) would have scared the Japanese straight.

Although Obama did not apologize, many other commentators have used the occasion of Obama’s speech to regurgitate their condemnation of the dropping of the bomb and to suggest that an apology is the least that the US owes the Japanese, and the world. It would take me seventy years to go through the verbal sludge that has oozed forth in the last seven days, so I will limit myself to a brief discussion of the worst.

This piece was written by one Jeffrey Lewis, who styles himself in his Twitter bio as “one of the pointier heads in all of nuclear wonkdom.” It would be more accurate to say “one of the emptier heads in all of nuclear wonkdom.” Or at least I hope to God that’s the case, because we’re doomed if he isn’t. For Mr. Pointy Head wrote one of the most cosmically stupid lines I have read in my life:

The historical debate in the United States over Hiroshima, as best I can tell, began as a debate over responsibility for the Cold War.

It is the case that this has been a debate in the fever swamps of the left, who are sure that Truman dropped the bomb as the opening salvo of the Cold War, and that Stalin was the real target. But in the saner precincts of the United States (and even in those very rare academic precincts that can be considered sane) the historical debate began, and continues, as a debate over whether dropping the bomb was the best way to end WWII in the Pacific. The key issues in the debate were from the beginning and remain things like: Would moving away from unconditional surrender have led to an end of the war? How many casualties would the Allies have suffered if they had invaded? How many casualties would the Japanese have suffered if the Allies had invaded? How many Japanese would have died if the US had attempted to continue to firebomb and starve Japan into submission, instead of dropping the bomb? Would dropping the bomb on an uninhabited location, with Japanese witnesses, have convinced the Japanese to surrender?

But if you read Lewis’s piece, you’ll note that something is missing: World War Two! How anyone can discuss the dropping of the bomb and ignore altogether the Solomons, New Guinea, the Philippines (especially Manila), Iwo Jima, Okinawa, Kamikazes, Operations Downfall, Coronet and Olympic, western POWs, huge populations under brutal Japanese control in China and elsewhere in Asia, etc., etc., etc., boggles the mind. But no. In Lewis’s mind it’s all about the Cold War.

The closest that Lewis comes to recognizing the reality of the grim choice facing Truman is this smart-assed line: “And that’s why your granddad didn’t die on some god-forsaken beach code-named after a car.” Would that Paul Fussell or Eugene Sledge or other less literary veterans who were spared unspeakable horrors by the bomb were alive to put this little puke in his place.

Lewis is a product of the same leftist miasma that produced Barack Obama. I have little doubt that his views resonate with Obama, and that the President primarily chooses not to express such views as forthrightly as Lewis does out of political expediency, rather than out of conviction. But in truth, Obama said much the same in his remarks in Hiroshima. By orating about Hiroshima in soaring moral terms completely untethered to the horrific choices facing Harry Truman and the American military leadership, Obama slanders them and does a grave disservice to the truth.


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