Streetwise Professor

January 16, 2022

Dispatches From Dystopia

Filed under: CoronaCrisis,Economics,Politics — cpirrong @ 7:17 pm

The shade of James Buchanan rests easy now, secure in the knowledge that he is no longer the worst president in US history.

Although the eclipse of Buck’s dubious claim to fame has been evident for some months, his successor to the sobriquet sealed the deal with a truly loathsome (even by his standards) speech on “voting rights” in Georgia last week. Unsurprisingly demonstrating no shame, or self-knowledge, the one-time buddy of full-on segregationists (e.g., Eastland, Talmadge, Byrd) and man who bragged that (a) Delaware had sided with the South in the Civil War, and (b) that George Wallace praised him, claimed that anyone who opposed the federalization of US elections was in a confederacy with Bull Connor, selfsame George Wallace and . . . Jefferson Davis.

Buchanan was a disaster because he fiddled while the country spun into disunion and civil war. But although he failed to stop it, he didn’t actively stoke division and hatred. Which is what exactly Biden did in his speech.

A sharp contrast to Biden’s previous claims (e.g., in his inaugural address) that he would be a unifier.

As if that was ever credible.

Biden’s speech was so repulsive that even his pom-pom squad (e.g., Peggy Noonan, Chuck Todd, DICK Durbin, Al Sharpton, CNN, MSNBC, etc.) recoiled in horror. Not even they would drink this KoolAid.

But to anyone who is shocked: seriously? Where have you been during Biden’s entire public life? He has ALWAYS been a mean, nasty, dishonest, repulsive schmuck. Did I mention dishonest? His hair plugs are the most honest thing about him. Anyone who fell for the avuncular Joe shtick was an idiot or self-deluded.

In sum, it was only a matter of time before Brandon elbowed Buchanan to the side, and assumed the mantle of worst president in American history. Worst in personality (which is saying something, given the likes of LBJ), the most intellectually limited (by a mile, even before his senescence), and the most inept.

An illustration of Mencken’s adage: “Democracy is the theory that the common people know what they want, and deserve to get it good and hard.”


Well, we’re getting it good and hard now, ain’t we?

And as for democracy, and in particular, “our democracy”, Biden’s mantra is that state control of elections is tantamount to Jim Crow. Well, state control of elections has been a staple of “our democracy” (sic–the US is a republic) since the first federal election in 1788. But now it’s not, apparently. Indeed, its an anathema to it.

So spare me any blather about “our democracy” (sic). What we are witnessing is not reverence for, and an effort to protect, our political traditions: it is a concerted attempt to overthrow them.

Switching gears somewhat in my tour-de-dystopia–to COVID. (Not a complete shift, because Biden’s idiocy appears here too).

Here there is too much ground to cover–the entire globe, in fact. So much malignity to choose from. But much of it focuses on vaccine mandates.

Even this is a target rich environment. Macron saying that those refusing vaccination were not citizens and that he would piss on them. Quebec fining the unvaccinated and Canada barring unvaccinated truckers from entering the country (thereby exacerbating an already acute supply chain situation). Germany. Austria. (Germans gonna German!) Biden’s attempts to foist them on the US via OSHA or HHS (the former foiled the latter alas not).

But Australia presents the most egregious example. Australia has been in an intense competition with Canada and New Zealand for the Commonwealth Fascist Cup, but had eased into a comfortable lead with its concentration camps and truncheoning protesters (including old ladies). It has decided to cement its lead with its actions in a very high profile case.

Unvaccinated tennis great Novak Djokovic was just deported, thereby preventing him from playing in the Australian Open (with the very good chance of setting the record for Grand Slam victories). Was he deported because he violated visa requirements? No, even the Australian government recognized that he had a recognized and legitimate exemption–a previous COVID infection which made him less of a threat to the health of Australians than his vaccinated competitors. No. They deported him because he may “foster anti-vaccination sentiment.”

That is, he might galvanize opposition to government propaganda. Or, put differently, he would potentially undermine Mass Formation Psychosis.

Can’t have that!

Note well that governments’ insistence on vaccination has been almost perfectly negatively correlated with evidence regarding vaccine efficacy and perfectly positively correlated with evidence regarding its risks, especially for the non-aged.

To learn more about evidence of the always weak and now declining efficacy of the vaccines, read Substacks by el gato malo, Steve Kirsch, or Alex Berenson. The evidence is too strong to ignore–but governments are doubling down on ignoring it.

Hell, don’t believe them? How ’bout Bill Gates?: “The vaccines we have prevent severe disease and death very well but they are missing two key things. First they still allow infections (‘breakthrough’) and the duration appears to be limited. We need vaccines that prevent re-infection and have many years of duration.” So they don’t work long and they don’t stop the spread. Other than that, they’re great!

Don’t believe Bill? How about the Pfizer CEO, Albert Bourla?:

“The two doses, they’re not enough for omicron,” Bourla said. “The third dose of the current vaccine is providing quite good protection against deaths, and decent protection against hospitalizations.”

And believe me, these are the mildest characterizations of mRNA “vaccine” efficacy.

And as for the health risks, the anecdotal evidence (e.g., athletes collapsing or withdrawing from competition due to heart issues) is pretty startling.

Well, you might say, it’s only anecdotal evidence. But I guarantee that for any other medication, this anecdotal evidence would catalyze public outrage and spur aggressive government investigations, and indeed, pre-emptive pauses on further vaccination pending a thorough inquiry.

But here we see the exact opposite from governments. They do not even deign to acknowledge the issue, but double down on their demonization of the unvaccinated, their dismissal of doubts, and their demand for obedience.

Why? For the worst of reasons.

First, governments are loath to admit their myriad errors regarding the panicdemic, most notably their errors in wildly exaggerating the miracles that mRNA technology would shower upon a beleaguered world. Two shots didn’t work??? Then THREE! Three don’t work? FOUR! (The Dutch are planning six!)

Insanity: doing the same thing over, and expecting different results.

And this does not even get into the possibilities mooted by some even before mRNA treatments were widely employed that they could have unintended consequences, such as stimulating mutation or damaging immune systems.

Second, and even more disturbingly, as with most of the COVID policies we have endured the last two years, it’s not really about public health. It’s about public control. The Djokovic situation demonstrates that clearly: he was a threat not because he jeopardized public health (which the government acknowledged he did not), but because he jeopardized the government’s control over an ovine public. The sheep might get ideas!

(Never forget that 40 percent of Australians descend from prison guards conditioned to exact obedience. I shudder to think at the proportion among those in government. And many of the rest descend from prisoners conditioned to obey.)

Take any government policy adopted over the last two years that seems completely insane from a public health perspective. Then evaluate it from the perspective of whether it advances government control–or elite control (e.g., the Bill Gateses of the world).

You’ll find that the public health insanity is the epitome of government control rationality. Every. Damned. Time.

The Djokovic deportation is unique only because it is a disarmingly honest recognition of that fact.

There are stirrings of discontent around the world. But stirrings are not enough. The time for full-blown civil disobedience has arrived. No disobedience now, dystopia forever.

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January 9, 2022

Yalta II: Poland Gets Schtupped Again

Filed under: History,Military,Politics,Russia — cpirrong @ 5:21 pm

Vladimir Putin has demanded Yalta II. Specifically, a withdrawal of Nato forces to the pre-expansion lines of 1997, which would basically abandon Poland and the Baltic nations.

It is easy to understand why Putin would demand this. It is far harder to understand why the US, and Nato generally, would give this demand the time of day. But it apparently is doing far more than that: it is signaling a preemptive concession.

Hapless, feckless, gormless, chuckleheaded Secretary of State Anthony Blinken sent the signal, in words, not blinkin’ his eyes in Morse Code:

But there’s more!

Of course Blinken said, after suggesting unilateral concessions, there would be no unilateral concessions.

Totally credible! Especially in light of US actions in Afghanistan, etc.

As Casey Stengel once said: “Doesn’t anybody know how to play this game?”

FFS, Russia has taken a maximalist position in its negotiating stance. You don’t respond to a maximalist position by playing Caspar Milquetoast.

TIL that the use of the word "milquetoast" to mean someone ineffectual or  weak derives from the name of a once hugely popular American Newspaper  Comic Strip character, "Caspar Milquetoast", who appeared

(And I swear to God, if Blinken’s photo isn’t next to the definition of “Beta Male” in the dictionary, it damned well should be. Who could possibly be intimidated by this guy? Hell, who in Russia or China isn’t wetting themselves laughing at the thought of seeing this guy at the other end of the bargaining table?)

Somebody comes to negotiations with a maximalist position, the appropriate response is: “fuck you and yo’ mama too.” Call the bluff, then talk.

And it’s so unnecessary. Look, Yalta is hardly a credit to FDR’s legacy, but (a) at the time, Stalin had possession of the territories in question, and possession is ten tenths of the law in international power politics, and (b) FDR was a sick, weak man at the time.

Well, I guess (b) pretty much holds today. (As pathetic as he was, FDR was sharper in 1945 than LGB is now.) But with regards to (a), the situation is totally different. Today Nato controls the territories in question. There is no reason whatsoever in order to make any concessions. Zero. Zip. Nada.

Yes. I have said it’s stupid to include Ukraine in Nato. But Poland and other eastern European nations are already in Nato. Totally different situation. Tell Vova to get over it and get used to it. Don’t egg him on by dangling concessions.

But Biden (and, of course, Germany) appear quite willing to shtup Poland yet again.

One wonders what Poland did to anger God. Placing it on defenseless territory between Germany and Russia. And putting its fate in the hands of feckless fools like Brandon and Blinken.

How disgraceful. Especially since Poland has been the most stalwart member of Nato and very loyal to the US. In stark contrast to the perfidious Germans. Yet whom is Biden apparently content to sell down the river? Yes, disgraceful. But this is a disgraceful administration.

One last thing. Can you imagine the shitshow if the Trump administration had bleated out what Blinken did? “See!!!!! He’s in Putin’s pocket!!!! He’s Putin’s puppet!!! COLLUSION!!!!”

But what do we hear now?: crickets.

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January 7, 2022

Kazakhstan: Putin Putting the Band Back Together

Filed under: China,Military,Politics,Russia — cpirrong @ 6:51 pm

Kazakhstan has been rocked by days of massive unrest, including attacks on government buildings (including the presidential palace), and large numbers of killed among both security forces and civilians.

The supposed catalyst for the uprising was a rise in liquid petroleum gas (LPG) prices–LPG being a fuel widely used for cooking, heating, and transportation.

This is plausible. Authoritarian regimes can persist despite a deeply unhappy populace because of coordination problems, exacerbated by preference falsification. A rise in the price of food and fuel hits the entire population, and can serve as a focal point on which masses can rally in coordinated opposition. Many rebellions and revolutions start for such reasons, but once they start they are difficult to contain even if the government reverses the initial catalyst, as Kazakh president Tokayev did with LPG. The opposition has coalesced. People know that many share their broader disgust with the rulers. And their is courage in numbers. So even though the spark has been extinguished, the fire can continue to burn.

But I suspect there is more to it than that. Intra-elite conflict is also likely an important driver. Tokayev had succeeded Nazarbayev, but the latter remained powerful, chairing the Security Council. Shortly after fighting erupted Tokayev fired Nazarbayev. Shortly after that, Nazarbayev and his family fled the country. Tokayev also restored the name of the capital (Astana) in lieu of Nur-Sultan (which was an homage to Nazarbayev). It is therefore likely that a conflict between factions is the real underlying cause of the uprising.

One striking thing is that the oppositionists appear to be fairly heavily armed. That would make sense if many of them are effectively militias for one of the elite factions.

Russia, using the beard of the Collective Security Treaty Organization (a poor simulacrum of the USSR), has intervened, sending paratroops to assist Tokayev in crushing the revolt. Apparently ground troops are also massing at the border, and units from the Far East are also being mobilized.

The speed with which Russia reacted is intriguing. It suggests considerable foreknowledge. Perhaps they had good intelligence, could see what was developing in the country, and were ready to act lickety-split if things went pear shaped–as they did.

Or perhaps the Russians knew because they were behind it. They have exploited unrest in Belarus to bring that country largely under Russian control. They are likely to do the same here. It wouldn’t be the first time a country stoked a revolution in another in order to provide a pretext to move in.

But regardless of whether gaining greater control over Khazakstan by intervening to stamp out a rebellion they stoked is part of a plan, or the uprising merely presents an opportunity to do so, there is little doubt that this will be yet another step in Putin’s ambition to put the band (i.e., the USSR) back together.

And Putin does believe he’s on a mission from God.

That’s the goal, surely. But it is easier said than done. Kazakhstan is an immense country. In point of comparison, it four times the size of Afghanistan. Unrest has already spread to all major cities. Yes, it looks like the capital of Astana (at least the government areas) is back under control, but securing many far flung cities and maintaining lines of communication would require far more troops than Russia has. (Recall how quickly it secured Kabul in 1979. Recall how securing Kabul did not translate to controlling the country.) And securing the countryside–forget about it.

Indeed, the immensity of the task is one reason to believe Russia did not foment the uprising, but is instead extemporizing.

Further, this presents a great opportunity for the United States to wage asymmetric warfare against Russia. You know that will be alleged–hell, the government has already blamed it on foreigners. In this case, it is likely to be true. Which will increase the cost of Russian intervention.

Another couple of points. First, although Russia has garnered all the attention, the elephant in the room is China. China borders Kazakhstan. Crucially, Xinjiang borders Kazakhstan, and China is neuralgic about that Muslim province. Moreover, China has extensive economic interests in Kazakhstan. Even though Putin and Xi have been lovey-dovey of late, that’s only been where their interests aligned. There is some alignment of interests in Kazakhstan–neither wants to see it descend into chaos or worse yet assert its independence–but Xi also has no interest in seeing Russia become dominant there and muscle out China. Russia attempting to dominate Kazakhstan will create friction in China.

Second, Ukraine may catch a break for once. The paratroops that Putin dispatched to Astana would be the spearhead of any invasion of Ukraine. Moreover, Russian military capacity (manpower, logistics) is likely insufficient to execute two large operations over such vast spaces (and on two different axes to boot). As noted above, Kazakhstan’s vastness can easily gobble up large numbers. If the Russian involvement in Kazakhstan proves more than fleeting, and especially if it absorbs tens of thousands of troops (not to mention the logistical resources necessary to operate in such a huge country), its ability to attack Ukraine will be reduced commensurately.

Sometimes revolutionary fervor dies out almost as quickly as it starts. But sometimes it doesn’t. Geography alone makes crushing the revolution difficult. And those difficulties may make Kazakhstan Putin’s Ulcer.

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January 6, 2022

Worse Than A Crime–A Blunder, Revisited

Filed under: Military,Politics — cpirrong @ 4:46 pm

My initial take on January 6 2021 was to echo Fouché’s verdict on the judicial murder of the Duc d’Enghien by Napoleon “it was worse than a crime: it was a blunder.” Today’s nauseating anniversary remembrance demonstrates exactly why it was such a blunder.

The Democratic Party and the left generally grotesquely exaggerate the events at the Capitol in order to delegitimize any and all opponents on their right. Anyone who opposes the Democratic Party is a threat not to the Democratic Party–but to democracy. Anyone who even suggests that there was something hinky about the 2020 election is an extremist, an insurrectionist. Anybody who opposes the Democratic Party’s agenda is similarly an extremist, an insurrectionist, and a revolutionary.

Cut to video of the Capitol on January 6 2021.

Further, since the right is such a threat to political order, our governing institutions, the rule of law, etc., etc., etc., preemptive actions are justified to fight it. Indeed, it is justified to fight the non-left/non-Democratic by any means necessary (to reprise a phrase made famous–or infamous–by Malcom X):

What the American left needs now is allegiance, not allyship. It must abandon any imagined fantasies about the sanctity of governmental institutions that long ago gave up any claim to legitimacy. Stack the supreme court, end the filibuster, make Washington DC a state, and let the dogs howl, and now, before it is too late. The moment the right takes control of institutions, they will use them to overthrow democracy in its most basic forms; they are already rushing to dissolve whatever norms stand in the way of their full empowerment.

In other words, it is imperative that the left burn the village in order to save it. Put differently, leftist shrieks about the right’s threat to the Constitutional order is projection to the Nth degree.

As an aside, the author of that piece–which has received a lot of attention, as has his book on the same subject–Stephen Marche, is a Canadian with a PhD in early modern English drama from the University of Toronto, who taught Renaissance drama at CUNY (that’s with a “Y”) for a few years. Methinks he should have stuck to the Wars of the Roses, or Justin Trudeau’s socks.

Marche is also particularly alarmed about right (and white) extremism in the military. His main concern is that it will not fight on the right side (I mean, the left side) in a civil war. So it must be purged. Note that such a purge is ongoing. And January 6 is a pretext for that.

The Democrats, and Biden in particular, are especially incentivized to wave the bloody shirt of January 6 (even though the only blood spilled was among the demonstrators) because, well, what else do they have? Everything else, from inflation, to Afghanistan, to COVID, to risking crime, etc., etc., etc., is a disaster. They cannot prevail in elections based on their record of governance, so they have to assert that letting the opposition win would represent the end of self-government in America.

So it’s all January 6 all the time, baby.

Alas, with a few exceptions, the Republican officials have proved to be the pussies that they’ve proved to be time and time before. Even Ted Cruz regurgitated the “violent terrorism” narrative yesterday. With friends like these . . . . They are, in fact, good for nothing cowards who are totally invested in the existing political culture, and are more afraid of bad press than they are willing to speak the truth. And they are too stupid to realize that this craven posture only reduces their chances of electoral victory. It is not called the Stupid Party for nothing.

And the truth is that January 6 was indeed a blot on America’s escutcheon. But the truth is also what January 6 was not. It was not an insurrection. It was a largely spontaneous overreaction of frustrated people in a febrile political and social environment. It was hardly organized or directed–except for colorable claims that any organization or direction came from the FBI and other federal organs. (If the feds were not in the crowd, and did not anticipate what could happen, then they were outrageously incompetent, and completely acting against type–which involves infiltrating every potentially anti-government movement.) It was not a coup, as the term is normally understood. What happened after Trump’s election was far closer to a coup than anything that happened after Biden’s. (Russiagate, impeachments, etc., were all attempts to deny the legitimacy of Trump’s election and to overturn the results thereof, so spare me Democrats’ current laments about how the 2020-21 challenges to the legitimacy of Biden’s election are beyond the pale.)

January 6–and Trump’s reaction to his loss generally–was a tantrum. An understandable tantrum, but a tantrum nonetheless. And like most tantrums, it has proved completely counterproductive and has boomeranged on those who threw it–and on the rest of the non-leftists who were nowhere near the Capitol, and who remained calm. A blunder, as it were. It is being used to discredit any opposition to the left’s extreme agenda by tarring all opponents as rampaging extremists.

It is said that revenge is a dish best served cold. January 6 is a perfect illustration of the wisdom of that adage. Acting in heat, the crowd–and Trump–did far more harm to their cause then good. Better to remain calm and plot vengeance coldly, calculatedly. The failure to do so has made the fight all the more difficult.

Indeed, blunder is too weak a word to describe the choices that people made. Does anyone have any better suggestions?

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December 29, 2021

In Which I Agree With Nikole Hannah-Jones!

Filed under: History,Politics — cpirrong @ 4:48 pm

Nikole Hannah-Jones claims that we are entering a new dark age. I agree! To a point. For Ms. Hannah-Jones is projecting. She and her ilk are the harbingers of a dark age, not its victims. It is the likes of her 1619 Project, and its widespread adoption as instructional material, not the scattered resistance to it that Ms. Hannah-Jones bewails, that represents the advance of the enemies of truth and knowledge and the suppression of Enlightenment values. (It is, alas, but one example of this.)

The Enlightenment was–sadly, use of the past tense may be very appropriate here–a movement against obscurantism, superstition, and most importantly, official “truths” decreed by institutional powers like the church. The Enlightenment allowed individuals to challenge institutions. It undermined traditional power structures and contributed to the liberation of mankind from feudalism and its variants. The Enlightenment has seen its share of excesses and errors, but it is what pushed back the darkness of the Dark Ages. Indeed, it is by contrast to the Enlightenment that the Dark Ages are considered dark: those living during them did not consider them such.

Post-modernism–which infuses Hannah-Jones’ work, and cognate movements like CRT–is profoundly, avowedly, and unapologetically anti-Enlightenment. It denies all of the basic principles of the Enlightenment. It denies that there are things that are true independently of the beliefs of subjective observers operating in systems of power. It is profoundly anti-scientific. And here I mean science as a method, not Science as it is used and abused by post-modernists in power. And it is collectivist and anti-individualist.

So yes, as Hannah-Jones says, we are at serious risk of entering a new Dark Ages. But she is just one of a phalanx of anti-intellectuals posing as intellectuals who threaten to return humanity to the dark days that preceded the Enlightenment they hate so much. Post-modernism is big on irony. It doesn’t get much more ironic than that.

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December 26, 2021

No Blood For Batteries?

Filed under: China,Climate Change,Economics,History,Military,Politics,Russia — cpirrong @ 5:46 pm

The latest hyperventilation over Russia relates to the alleged involvement of the Wagner Group–Russian mercenaries/paramilitaries–in Mali. Wagner is run by “Putin’s Chef,” Yevgeny Prigozhin.

Russia denies involvement. Wagner denies involvement. Mali denies involvement. Since none of them are remotely trustworthy, I will accept as true that Wagner (or some other Russian entity) is involved.

At one level, one could answer “So what?” or even “Good!” Western militaries, notably American and French, have been involved in the Sahel for years. The US involvement has been marked by some tragic events, notably the destruction of a US Army Special Forces team in Niger and a murder of a Green Beret by other US special operations members in Mali. France recently withdrew its troops from Mali after 8 years of inconclusive fighting that resulted in the deaths of 52 French soldiers, including a highly decorated special operator. (And which also saw two coups in Mali. So much for creating stability.)

The American and French efforts had little effect on Muslim insurgents. So why not let the Russians have a go, if the real objective is to kill Salafists–and the objective isn’t worth American or French lives?

But this level is likely a very superficial one, and that is likely why there has been such alarm at Russian involvement. West and central Africa, including the desolate Sahel region, are now the cockpit of a 21st century version of a “great game” not so much because of ISIS or Al Qaeda, but because of . . . batteries.

And unlike the Great Game of the 19th century, which involved Russia and Great Britain, the 21st century game in Africa involves Russia, the West (especially but not exclusively the US), and notably China. The largely desolate and desperately poor region which the world’s richest nations are contesting is of increasing importance because it is disproportionately endowed with materials like lithium, copper, and cobalt, all essential for the manufacture of batteries or other components for electric vehicles that the alleged green elites in the West claim will be our climate salvation.

And don’t think that the Salafists are solely motivated by religious fervor–they no doubt understand the economic calculus as well. If oil made Saudi Arabia, another otherwise desolate and impoverished region, what economic power could control over lithium, copper, and cobalt create? Oil fueled Wahhabism. EV materials could well fuel another radical Islamist movement.

A rallying cry of the left, and especially the environmentalist left, from the 70s onward was “no blood for oil!” No doubt their CO2 monomania, and the resultant obsession with electrifying everything and especially electric vehicles, has blinded them to the inevitable if unintended consequences of their idée fixe.

Specifically, realizing their vision will require vast amounts of materials. Put aside the environmental consequences of mining for these materials. Focus on the geopolitical consequences. These minerals are found disproportionately in vast, violent, and largely ungoverned spaces. Control over them can be achieved only by violence, and even if violence was not necessary, the incentive for unscrupulous governments and corporations to utilize violence to capture the rents these resources promise (especially in an electronic world) is great indeed.

Furthermore, the powers contending for these resources are facing off on every continent, and are armed with nuclear weapons. What starts in Africa is unlikely to stay in Africa. And something could very well start in Africa. Great Power conflicts almost erupted in Africa on several occasions in the era of imperialism, when the economic stakes were far smaller: what did Fashoda matter, really? Yet Britain and France almost went to war over it. The stakes are far larger now.

Especially in a world obsessed with replacing petroleum with electricity.

Methinks that the evident panic over Russians in one of the world’s armpits really has little to do with the stated reasons: again, why would France or the US mind if Russians killed Salafists, and took the casualties necessary to do it? Instead, the panic is over the prospect of an impending struggle between the US/Western Europe, China, and Russia over a vital economic resource in an ungoverned region that requires organized violence to control it.

Environmentalists are so absorbed in their monomania that they are oblivious to the unintended consequences thereof. They have lectured us for years about no blood for oil. What about blood for batteries? Because that is the inevitable consequence of replacing the former with the latter.

They need to be forced to face this reality and to own the consequences of their obsessions. Now.

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December 22, 2021

Levitating the Lira–For How Long? Or, Erdo Promises the Impossible (Trinity)

Filed under: Economics,Turkey — cpirrong @ 7:01 pm

The Turkish lira is now about 12, a big recovery from its nadir on Monday. I expressed skepticism that Erdoğan’s announced policy of guaranteeing some Turkish bank deposits against an adverse move in the TRY was the cause. As we’ll see in a moment there is something to that. But even if the policy announcement caused all or some of the rebound, my skepticism about the viability of this mechanism remains.

As to the logic behind the policy. In essence, there was a run on the lira, and one way of running was to sell lira on deposit, and buy dollars. A typical bank run is to sell deposits for currency. One reason bank runs are far less frequent today in places like the US is deposit insurance, which is basically a mechanism to ensure that a dollar on deposit will always be worth a dollar of currency. That short-circuits the run dynamics, in which fear that a dollar of deposits will be worth less than a dollar of currency, which induces people to race to convert deposits into currency, which can cause banks to fail . . . leading to deposits being worth less than the equivalent amount of currency.

What Turkey has announced–and note, it has not announced the details so this isn’t really a plan but a sketch of a plan–is equivalent to a form of deposit insurance. Except that here the government is promising the TRY value of deposits will be worth at least a fixed amount of USD or Euros. But the idea is the same. If people are convinced that their deposits will remain pegged to the dollar, they have less incentive to run.

There is a key word in the prior sentence: “convinced.” It might work if people believe it will work. It won’t work if people don’t. So how can they have confidence? This confidence is necessary, but not sufficient, for success.

The confidence depends on the reliability and solvency of the guarantor. It’s not quite clear who that is in this situation. Is it the banks? The government? The former would be ludicrous, so let’s go with the latter.

So how is the government going to fund the guarantee? It’s likely hoping that the mere fact that people believe it can and it will will mean that the government is never on the hook for anything.

But that’s not realistic. The value of the TRY will fluctuate for the same reasons that currencies always fluctuate. Macro shocks. Balance of payment issues. Capital flows. Whatever. The Turkish government is short a put on the currency (that’s essentially what the guarantee is–a put on the TRY). Sometimes these factors are going to push the TRY down, obligating the government to make good on its promise.

So how is it going to pay for that? And note that it will have to pay a good fraction of the time. Roughly 50 percent of the time if the floor is set at the current exchange rate.

Print lira? LOL. So the lira declines, and the government prints more lira to pay off on its short put. Which will depress the lira further. Requiring more printing, etc. etc. etc.

Short put=short gamma. Short gamma can create an unstable positive feedback mechanism, and positive feedback mechanisms in economics very often have extremely negative consequences. Lira declines feed further declines. And again–as with any currency, lira declines are always a major risk. This is especially true with a country like Turkey. And resorting to this mechanism would likely destroy the trust that it depends on.

OK. The printing option seems pretty dumb–though don’t put it past Erdo! So, to meet its obligation to top up lira-denominated accounts to compensate for a decline in the TRY, instead of printing lira Turkey could sell dollars and Euros for lira which it then gives to depositors. At least this would potentially create a beneficial (negative/stabilizing) feedback mechanism, with the $ and € sales tending to increase the value of the lira.

But where is Turkey going to get the dollars and euros? That’s what I meant the other day when I said don’t trust a madman whose mouth writes checks his wallet can’t cash.

This second mechanism can be viewed another way: as a commitment device. Specifically, a device committing Turkey to defend the lira. Effectively, a way of committing to a peg: it has to buy lira/sell $ or € when the lira declines. And if Erdo’s other promise–not to raise interest rates–is believed, committing to a peg and foregoing the option to raise interest rates to defend the currency.

And if this is the real plan, it faces all the risks that pegging inevitably entail. Pegs are always at risk to speculative attack. Turkey is particularly so, given its paucity of foreign exchange reserves and its bizarre government policies. No doubt George Soros’ interest has been piqued.

This is why I am skeptical. Skeptical as to the announcement of this sketch of a plan leading to a 33 percent rally–FX traders no doubt have figured out what I just laid out. Skeptical as to the feasibility and stability of this mechanism, even if it did levitate the lira.

And as I alluded to at the outset, it may well be the case that the plan didn’t raise the lira on Monday and keep it there–traditional government intervention has. The FT reports that the central bank has spent billions of dollars in recent days to stabilize the TRY. This suggests that the plan is basically just propaganda to (a) conceal what is really going on behind the scenes, a traditional defense of the currency, and (b) allow Erdo to take credit for the rally without admitting that more dollars are going out the door.

Regardless of the mechanism, defending the lira puts strains on Turkey’s public finances. The fact that Turkish credit spreads have widened even as the currency has strengthened suggests that Mr. Market has figured that out.

Turkey, like all countries, faces the “impossible trinity.” A country cannot have a fixed exchange rate, an open capital account, and an independent monetary policy. But Erdoğan is promising all three. Fixing interest rates at low levels as he promises, because he’s on a mission from Allah=independent monetary policy. He has promised to maintain free movement of capital. And now, he is implicitly promising to fix the exchange rate.

We know with metaphysical certainty that this is impossible–the “impossible trinity” phrase came about for a reason. So it’s going to end badly. The only question is which part of the trinity is Erdoğan going to jettison. Based on form, I predict the lira.

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December 20, 2021

The Turkish Lira–Murdered by a Theory, and a Theology

Filed under: Economics,Politics,Turkey — cpirrong @ 2:00 pm

The Turkish Lira has crashed, down over 50 percent since September, and now trading at less than a third of the value it had when I was in Turkey in 2018. It would be unfair to apply Jefferson Davis’ epitaph for the Confederacy: “Died of a Theory.” Instead, “Murdered by a Theory” would be more accurate.

And the murderer is readily identifiable: Turkish president Recep Tayyip Erdoğan. His theory is that high interest rates cause inflation, so as inflation accelerated and the Lira plummeted, rather than allowing the central bank to tighten monetary policy and raise interest rates, he pushed it to cut rates–which only accelerated the TRY’s crash.

Sunday, even Erdoğan apparently realized that his economic rationale was risible, so he switched gears, saying that this policy was dictated by Allah and the Koran:

“What is it? We are lowering interest rates. Don’t expect anything else from me,” Erdogan said Sunday in televised comments from Istanbul. “As a Muslim, I’ll continue to do what is required by nas,” he said, using an Arabic word used in Turkish to refer to Islamic teachings.

Meanwhile, Erdoğan has been telling his largely religious (and poor) political base (which is being devastated by inflation) that this is just a test from Allah. That the Koran says that Allah is seeing whether you can bear such trials in silence and faith, and that if they vote for him again in 2023 he will fix inflation. Whip Inflation Then (Insallah). Or something.

So now, the Lira is being murdered by theology instead of a theory.

The chaos became extreme on Friday, with Borsa Instanbul shutting down due to a crash in Turkish shares that triggered circuit breakers. The chaos continued on the open, with the USDTRY breaching 18 and the stock market shutting down again:

Note the big rally earlier today. Though it is rather sobering that 15 is, relatively speaking, good news.

The recovery was driven by an Erdoğan statement to the cabinet today in which he pledged to defend the currency and to protect Turkish depositors against currency declines. To be honest, I find it hard to take his announcement seriously, although the markets apparently have. He has made commitments, but their credibility is dubious at best, especially since he pledged to continue his Crazy Erdo interest rate policy.

To carry through on these promises, Erdo needs dollars and Euros. Which he doesn’t have.

So I would be short the TRY at 15. Relying on a madman’s mouth writing checks that his wallet can’t cash is foolish.

There are larger lessons here.

The first is that this demonstrates the extreme dangers of presidentialism and highly personalized political systems. A “leader” with no checks and balances can indulge in insane policies at a whim. Erdoğan has gutted every institution in Turkey that could counter his ambitions–and his flights of policy fantasy. The press is suppressed, with more journalists in jail in Turkey than anywhere in the world. Civil society figures (and ordinary people) are muzzled due to the threat of being arrested for “insulting the president.” (The friend of a friend, the head of the Ataturk Institute, has been convicted of this and has the sword of Damocles hanging over his head.) The courts are packed with his goons, and the military was neutered after the abortive coup of 2016 (which in retrospect looks more and more like a false flag operation, given how it has redounded to Erdo’s benefit).

(Erdoğan’s careening into megalomania actually makes Putin look good by comparison. Russian macroeconomic policy under Putin has actually been rather responsible. Perhaps because Putin is uninterested in the subject and willing to delegate, or because he realizes that he is not especially competent in the subject. Either way, his forbearance looks wise especially in contrast to Erdoğan.)

Another lesson is that fakakta economic policies can do incredible damage in short order, yet “leaders” may recklessly implement nonetheless. In the United States, the Biden administration’s continuing attempt to spend additional trillions in the face of the worst inflation of the last 40 years is economic insanity: here the United States is at risk of dying from ignoring a theory (the fiscal theory of the price level). Even non-righties like Larry Summers realize the danger

Fortunately, a semblance of checks and balances remains in the US, and Joe Manchin has played Horatio at the Bridge, holding off BBB for now. But for how long? The specter of presidentialism hangs over the US too: Manchin is being assailed viciously by the left as a threat to “our democracy” for his temerity in resisting the president’s will–even though said president’s mental incapacity is manifest.

The US should take heed of what is going on in Turkey, and not gut checks and balances, give carte blanche to presidents, and engage in reckless economic policies. Alas, given the sway that turkeys hold in politics and the media, this may be a vain hope.

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December 16, 2021

You’ll Travel the Road to Serfdom on Public Transport–Oh Joy!

Filed under: China,History,Politics — cpirrong @ 6:57 pm

The private automobile has been the greatest liberating invention in history. Before the automobile, individual horizons extended a few miles for most. With the privately-owned car, billions of people have been able to travel where they want when they want. It has made it possible to separate considerably the workplace from the living place. It has expanded the range of stores and restaurants and service suppliers available to people. It has made travel–sometimes at a whim–possible in ways it was not possible before its widespread use.

So of course the world’s “elites” hate the automobile. Because they hate personal freedom.

A couple of data points.

First, consider this from the UK: “Car Ownership Could End in Massive Overhaul of UK Roads.”

A few excerpts (but read the whole thing):

GOVERNMENT transport ministers have backed calls to end private ownership of vehicles in a major overhaul.

She said the country needed to move away from its “20th-century thinking centred around private vehicle ownership”.

She added it was “staggering” almost two-thirds of trips were conducted by lone drivers.

How dare those proles weight the benefits and costs of going where and when they want alone vs. coordinating with others!

The Government has repeatedly stressed the need to switch from a reliance on cars to other forms of transport.

Oh, if the government says so . . . Better not disagree with our betters, given how remarkably competent governments are!

They said this was one of the “biggest opportunities” to switch short car journeys to cycling and walking.

In the rain? In the snow? When it’s 90 degrees? When its 20 degrees? At night? If you are elderly or infirm? If you’ve worked all day and really don’t want to walk 3 fucking miles? If you are going to the grocery store to pick up a week’s groceries for a family of 4?

I could go on.

Supposedly new technology will allow various forms of ride sharing.

Have they heard of Uber? Lyft?

People have always had the option to ride share. They typically choose otherwise. For obvious reasons. They have more options now. And again, they typically choose otherwise.

One wonders if these people actually live in the real world.

They also tout public transport. Which has been the hobby horse of the control freaks since forever, and with few exceptions driven by urban density and legacy investments has been a massive financial black hole. Further, although sitting in traffic is often a bad experience, being tied to public transport and exposed to the crowding, crime and assorted lunatics that it entails, not to mention the lack of flexibility, is quite often far worse than driving bumper-to-bumper. Which is why people choose not to use it, and why it is a financial black hole.

Again, let people choose. But no–that’s not the elite way! We’re too stupid to choose. We choose wrong.

Another data point:

“The Government is Your Next Car Passenger.”

Section 24220 of the [“infrastructure” law], titled Advanced Impaired Driving Technology, directs the secretary of transportation to issue a rule within three years requiring advanced impaired driving technology in all new vehicles, although the rule may be delayed if the technology is not ready for implementation. Automakers have up to three years after the rule is issued to comply.

Now, as written (though vaguely) this technology will be limited to detecting/monitoring “impaired driving.” Potentially laudable. But this is the camel’s nose under the tent. The future possibilities are endless. Speed control: all cars in Europe after 2022 must be fitted with speed limiters. Driving is bad for the climate, right? So driving must be limited directly or indirectly, and governments are hot to do that. One proposal in the US is impose a mileage tax. A system that can monitor if you’re buzzed can certainly count how many miles you drive, sober or drunk, send the results to the IRS or whomever, so that you can be charged accordingly. Or maybe you’ll get a mileage ration, and your friendly government sensor will shut down your vehicle when you’ve reached it.

Again the common theme here is that governments do not like the autonomy that private automobiles provide and are moving to impose, inch by inch, limitations on that autonomy. Leftists have always hated the automobile. They’ve always loved public transport. The former gives you freedom. The latter gives them control.

Guess which one they want, and will do anything to achieve?

And it’s not just automobiles. The elite–including the private jet elite–hates airline travel that lets the proles visit family or have a holiday at a pleasant location. Whether through carbon taxes or carbon credit pricing they will squeeze mass air travel like a python.

The main characteristic of serfdom was that people were tied to the land. Serfs moved or traveled at the sufferance of their lords, who almost never granted it. Restrictions on personal mobility whether by car or plane are not quite so draconian, but they rhyme. You will travel the road to serfdom on public transport.

Right now these restrictions are but specks on the horizon. But that is no reason whatsoever to discount them. They are part of a broader agenda, and the mere existence of that agenda and the conviction–and power–of those who advance it makes these restrictions a very, very real possibility.

Whether you want to call them leftists, or progressives, or globalists, or transnational progressives, etc., the “elites” in and out of government (e.g., the WEF, people like Bill Gates or George Soros or Jeff Bezos or Larry Fink) are central planners at heart. They are like Adam Smith’s Men of System, who believe (a) they can arrange society, and people in society, like pieces on a chessboard, (b) only they are possessed of the special knowledge and intelligence to do that arranging, (c) their arrangements are completely rational, and crucially (d) you are too ignorant and/or stupid and/or selfish to know what is rational for society and that as a result you make irrational choices. So your choices MUST be sharply constrained, if not taken away altogether.

For your own good, you know.

Note: most of these people admire China.

It’s all about control, in other words. And if you have been paying attention–hell, if you’ve been sentient–for the past two years you will realize that the push to control you is omnipresent. COVID–or more exactly, the responses to COVID–should give you all the evidence that you need. Most policies, whether it be lockdowns, or masks, or mandated “vaccinations” of dubious efficacy and largely unknown risk profiles, or vaccine passports, and on and on and on, make little if any sense as health measures: at the very least they are not backed by evidence that even remotely matches the fervor with which they are imposed and advocated.

But they do make perfect sense if you conjecture that the real objective is to expand and cement the control of the “elites” over vast swathes of your life. Everything in the last two years has been about depriving you of choice, and giving control of your life to bureaucrats and politicians and the plutocrats who exercise undue influence over them.

That is why these emerging threats to your personal mobility, and the autonomy that provides, need to be taken deadly seriously. They are just one piece of a far broader assault on liberty and autonomy, and a campaign intended to make you just another brick in the wall.

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December 9, 2021

Die for Donbas?–Demented

Filed under: Energy,Military,Politics,Russia — cpirrong @ 11:21 am

Vladimir Putin’s Russia has massed large forces on the border of Ukraine, and there are widespread fears that he is planning an invasion. This has led to calls from many in the United States (and to a lesser degree in nations that are actually closer to Ukraine) to deploy military forces–read, American military forces–to Ukraine, and to contest any Russian invasion if it comes to that.

This call to die for Donbas is demented.

It is useful to deconstruct the dementia by breaking the problem into two pieces: (1) whether defending Ukraine is in the strategic interest of the United States, and (2) what would be the costs of of doing so?

The red line that is apparently motivating Putin is the possibility that Ukraine will be admitted to NATO. Put aside whether a Ukraine in NATO would objectively pose a strategic threat to Russia, or whether this is a Putin phobia or part of Putin’s romantic desire to gather Russian lands and reunite brothers divided by a perfidious West. What matters is that he, and most of the Russian establishment (especially the security establishment) believes it. Putin has said repeatedly that it is a red line. We have to accept this as a fact.

If keeping Ukraine out of NATO is a strategic imperative for Putin, is putting Ukraine in NATO a strategic imperative for the United States?

Absolutely not. NATO’s mission from its founding was to keep Russia out of Western Europe. It succeeded. Adding Ukraine to NATO will not advance that objective.

So adding Ukraine would represent mission creep: redefining the part of the world that we want to keep Russia out of. Is it desirable that Ukraine remain independent? Probably, but mainly for Ukrainians. But it’s hardly a major strategic interest of the United States. How would American security decline if Ukraine was in Russia, or in Russian orbit? Hardly a whit.

So the stakes for Russia are high and the stakes for the United States are minuscule. It is never advisable to enter into a contest with such an imbalance of stakes.

And as I’ve written before, expanding NATO by adding countries that increase the alliance’s obligations without increasing its capabilities is idiocy. Indeed, it’s worse than that. Adding countries like Ukraine degrades NATO’s capabilities. As I’ve also written before, it is crippled by the need for unanimous decision making: adding members with divergent interests and concerns only magnifies the difficulties of achieving coherent action. It is inimical to the unity of command (something Russia possesses, by the way, and NATO already does not). Moreover, as (yet again) I’ve written before, adding countries that are unduly prone to Russian influence is a particularly stupid way to strengthen an alliance against Russia. (Hell, Putin might want to rethink his opposition to Ukraine in NATO just for that reason. I’m reminded of a story–the source of which I can’t trace so this is based on memory–that Napoleon actually rejoiced at the news that another country had joined a coalition against him, precisely because he knew this would undermine its unity of action.)

It is said about Mexico “so close to the United States, so far from God.” Well, it can be said about Ukraine “so close to Russia, so far from God.” It’s a tragic fate. But addressing that tragedy (which is only one of many tragedies around the world) does not advance American interests.

In addition to being far from God, unlike Mexico Ukraine is also very far from the United States. Which brings us to the second issue: the cost of defending Ukraine, even if it were deemed to be a potentially desirable object of American policy.

Soviet military strategists spoke of the “correlation of forces.” The correlation of forces is decisively on the side of Russia with respect to Ukraine.

Distance is of course a major factor. Ukraine is on Russia’s doorstep. It is thousands of miles and oceans away from the United States, and is even distant from deployable NATO forces in Western Europe. If Russia decided to move tomorrow, the invasion would be over before NATO could do a damn thing about it. And if NATO were somehow able to deploy forces before Russia moved in (which generously assumes that Putin would stand idly by to let such a deployment occur rather than using it as a pretext to launch an invasion) it would be operating at the far end of a very long and vulnerable logistical tail, whereas Russia would be operating with a short and relatively invulnerable one. This makes about as much sense as Custer charging into a huge Sioux and Cheyenne camp on the Little Big Horn, and would probably have a similar result: though Custer could be excused because of his ignorance about just how large the forces he was facing were, whereas NATO commanders could have no such excuse.

The choice would therefore be between abject defeat and a huge escalation that creates the potential for unimaginably horrible consequences.

And for what? (See above re the negligible stakes for the US and NATO.)

I should also note that the United States has a doleful record when it comes to attempting to defend and prop up dysfunctional and corrupt nations–and make no mistake, Ukraine is a Sovok sewer of corruption. Vietnam. Iraq. Afghanistan. In each case, vast amounts of American treasure and huge numbers of American lives were expended in the futile hope of creating functioning states out of dysfunctional ones. And the dysfunctions made the mission impossible, and moreover deeply damaged and corrupted the American military (cf. the Afghanistan Papers).

Uber realist Bismarck memorably said that the Balkans were “not worth the healthy bones of a single Pomeranian grenadier.” America needs to be uber realistic, and recognize that not only is Ukraine not worth the healthy bones of a single Texan Marine, it would cost many, many such skeletons.

This is a time when it is imperative to take a tragic view of history. Too often in the 100+ years the United States has taken a missionary, progressive, romantic, and idealistic view instead. It has always worked out horribly.

Can we finally learn our lesson?

A couple of political notes. First, there is a report today that the Biden administration is advising Ukraine to concede extensive Russian control over the Donbas. In light of the above, that is wise. But can you imagine the hue and cry if Trump had said that. Perhaps we are lucky Trump is not president–he would have been under much greater political pressure to intervene in Ukraine than Biden will be.

Relatedly, the call to defend Ukraine with Americans is an illustration of the Russia mania that has beset the American political “elite” in the past 5 years. It truly is a mental illness.

Second, it is no coincidence comrade, that the crisis is coming to a head when Nordstream II is ready for operations and Europe is desperate for energy. The former potentially allows Russia to have its Ukrainian cake and its gas revenues too. The latter makes the EU (aka the Fourth Reich) acutely vulnerable to Russia and therefore far less likely to intervene in any way–including sanctions, for that matter. (This also means that the US could not depend on Germany and other NATO nations for meaningful military support, even assuming that the Broomstick Brigades of the Bundeswehr have any to offer.)

For this the blame lays squarely on perfidious Germany and on Angela Merkel in particular. And ironically, exactly what Trump warned them about, and which Merkel and the rest of the European establishment dismissed haughtily, is coming to pass.

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