Tuesday, February 9, 2016

A Far Cry From the World We Thought We’d Inherit



Inspired by a recent interview of Stephen F. Cohen by John Batchelor….

All around that dull grey world
From Moscow to Berlin
People storm the barricades
Walls go tumbling in

All around this great big world
All the crap we had to take
Bombs and basement fallout shelters
All our lives at stake

The bloody revolution
All the warheads in its wake
All the fear and suffering
All a big mistake
All those wasted years
All those precious wasted years
Who will pay?
-        Neil Peart

The Cold War seems so long ago.  Twenty-five years ago the Soviet Union was no more.  Whether you believe the Cold War was real or merely a ploy to consolidate global power, it seems unquestionable that the time was one of potential (and at times almost realized) nuclear holocaust, even if only by mistake.

This came to an end with the dissolution of the Soviet Union…supposedly.  In the intervening years, NATO – whose entire raison d'être was to protect Western Europe from Soviet expansion – has remained and grown, expanding further to the east.  While there is some disagreement as to what promises were and were not made at the time regarding an eastern expansion of NATO, it is undeniable that such moves would be and are seen as threatening to Russia.

Prologue

Stephen Kinzer writes, in “The US as a fading superpower”:

Fifteen years into the 21st century, it is clear that the United States faces an era full of new threats. Some are political and military. The most serious is psychological.

During this century, the United States will not dominate the world as it did during the last one. If Americans can adjust to this reality, there is hope for global stability. If we refuse — if we do not accept the relative decline in our power — our frustration may lead us to lash out in self-destructive ways.

Not only self-destructive.  In any case, this self-destruction is ongoing – perhaps the best date to mark the beginning of this decline is September 11.

Nations naturally rise and decline over the course of time. Those that survive the longest, like China and Iran, do so by riding the tides of history. Americans have no experience doing that. For us the tide has always been high.

To understand this, Americans would have to understand history – not a strong suit.  Americans have no memory of being anything other than the one on top – the dictator.

Signs of the emerging new world are impossible to miss. A terror gang in the Middle East has seized territory, and we are forced to realize that despite all our military might, we cannot dislodge it without help from local partners. Russia openly defies us. Turkey, a NATO ally that was long our lap dog, ignores our pleas and goes its own way. Saudi Arabia launched a war without even consulting us.

It is even worse.  The US hasn’t been on the winning side of any meaningful “hot” war since about 1945 (yes, I know about Norman Schwarzkopf).  A super-power without resume.

Kinzer offers a sobering – and realistic – perspective:

Most challenging is our changing relationship with China. By mid-century, if not before, Americans will be faced with a reality we have never known: a rival that is more populous, richer, and more historically powerful than the United States. Our response to recent Chinese probes in the Pacific has been militaristic…. If we pursue this policy, the long-term victor is likely to be them, not us.

The risks are, unfortunately, high:

Great wars often explode at moments of tectonic geopolitical change: when rising states challenge a long-dominant power. The conflict is set off not by a challenger, but by the dominant power, which fears losing its top-dog status. Thucydides cited this as the reason for the Peloponnesian War 2,400 years ago: “It was the rise of Athens, and the fear that this inspired in Sparta, that made war inevitable.”

The Top Dog’s Self-Destruction

The inertia of empire allows for movement in only one direction…. From the Los Angeles Times:

The Obama administration wants to enlarge the U.S. military presence in eastern and central Europe next year by stockpiling heavy weapons, armored vehicles and other military equipment across the region, a substantial expansion of U.S. efforts to counter a resurgent Russia.

The proposed $3.4-billion initiative will permit the Pentagon to keep the equivalent of a 4,000-soldier armored brigade in the region at all times on rotational deployments, though no troops will be formally based there, officials said.

Market Volatility



Posted at Mises.org:

From my reading, for the Fed to increase rates in the situation of overwhelming excess reserves requires directly reducing liquidity via reverse repos (an increase in the rate of interest paid on excess reserves was also necessary, but not sufficient).  For those interested, I have written several posts on this topic, culminating with this one.

A look at the activity of reverse repurchase agreements suggests that the level has been steadily increasing since January 2014 – yet the volatility seems only most directly correlated to 1) the Fed’s failure to change rates in September (as the market seems to have fully expected this) and 2) the move to raise rates in December.

So why the significant increase in market volatility only now, when reverse repurchase activity has been steadily increasing for two years?  I am not sure.  Perhaps the market is now acting on the conclusion that the emperor has no clothes.  Yellen is trapped.  Reversing course on the recent rate hike would demonstrate nothing but incompetence.

Increasing the overnight rate will require draining evermore and increasing liquidity from the system.  This attacks the price of financial assets from both ends – higher rates and lower liquidity.  Perhaps this can be overcome by increasing the balance sheet again, but then the Fed would be fighting against itself.

I have long believed that the Fed would not increase rates in any meaningful way until a) price inflation was meaningfully politically painful, and b) the market therefore forces the Fed’s hands.  Neither of these is evident today.  Even the Fed cannot fight the market, it seems.

What is in force today is seeing the nakedness of the power behind the curtain – and not only to Austrians.  Even those playing the game have all been watching for the day they believe the game must come to an end – just hoping they are faster and smarter than the next guy.  Maybe these recent events are the signal.

Monday, February 8, 2016

A Simple Question



Is it possible for a property owner (for ease of dealing with this philosophical question, call him a homeowner) to commit a violation of the non-aggression principle on his property?

I don’t mean physically possible.  I mean permissible while remaining true to the non-aggression principle.

If you choose to weigh in, please provide more than a “yes” or “no.”  I welcome any links to articles or papers that you or others have written on this topic.

Addendum

I believe the question isn’t simple enough; I even confuse myself when I read it.  I will illustrate with examples.  First, from my clarification in the comments:

I invite a guest to my house for coffee. After enjoying a cup, I shoot him. There was no intervening confrontation of any sort, I just decided to do it.

I tell you, in passing, that I am taking my yacht to the Bahamas.  You ask if you can come along.  I say sure.  Half way there, I throw you overboard.  Maybe I decided I didn’t like your hair.  Or maybe…nothing.  Anyway, I never promised I would take you all the way to Nassau.

You are on my private jet.  You take off your shoes, and the color of your socks reminds me of my ex-wife – she wall-papered the entire house in that color.  Out the door you go, at 35,000 feet.  No parachute.

Are any of these permissible within a consistent application of the thinnest interpretation of the NAP?

Friday, February 5, 2016

Robert Wenzel, Stop Digging




If you find yourself in a hole, stop digging.
-        Will Rogers

On the topic of libertarian punishment, I have pretty much dropped my back-and-forth with Wenzel for a couple of weeks or so.  If it wasn’t obvious, his views on this struck me rather deeply.  Suggesting that it is acceptable within libertarian theory for a property owner to shoot a child for stealing an apple makes a mockery of the non-aggression principle.  My passion in my earlier responses reflects my passion for the beauty of the NAP.

Whatever he has written on the topic in the intervening time, I have pretty much ignored.  But today he offers a real whopper.  After describing what can only be described as a dysfunctional and dangerous inner-city neighborhood, Wenzel offers this:

Government security is a myth. You take care of yourself, move away from danger and that is about it. Anyone that thinks government or "governance" would stop what is going on at the Melrose Houses, and places like it, is denying reality.

Go ahead, governance people, go to the Melrose Houses and put "governance"  "community culture," whatever, in place, show me how that works.

This is an incomprehensible statement.  First of all, he seems to offer as interchangeable the terms government and governance.  I won’t bother going into it again here – anyone who wants to understand my meaning already has by now.

Further, there is a “community culture” at the Melrose Houses.  It certainly is not a culture conducive to achieving, let alone maintaining, a libertarian order.  There is little voluntary governance (family, church, community institutions of various sorts, etc.) – at least not of the peaceful type.

This example only makes my point.  Do you want a libertarian society?  There must be some common culture conducive to non-aggression; there must be governance.  Of course, to be considered “libertarian,” it must be accepted and conformed to voluntarily (but don’t expect perfection or unlimited choices, as Ryan McMaken wonderfully explains).

Try this, slightly modifying Bob’s challenge:

Go ahead, private property society people, go to the Melrose Houses and put your private property society or whatever, in place, show me how that works.

It won’t work, and this is the point.  Wenzel doesn’t even realize that his “private property society” requires both governance and a common culture.  I am not going to bother to search for the exact quote, but he has offered that his PPS is a society where people generally respect private property.

Get that?  The people generally respect private property…. Is this not a common culture? 

More basic: for a society where the people generally respect private property…

…is there some common understanding of “property” and where mine ends and yours begins?

…is there some means to document this? 

…is there some means to adjudicate disagreements?

…is there some means to deal with those who choose to remain outside of a system of adjudication?

…do the same questions apply to the aggression towards persons?

In any libertarian society that hopes to survive, the answers will certainly be yes, yes, yes, yes, and yes.

What is all of this but governance?

Conclusion

There are three kinds of men:
The ones that learn by reading.
The few who learn by observation.
The rest of them have to touch an electric fence.
-        Will Rogers

Bob, let go of the fence.

NB: slightly modified since original posting

Addendum

I guess I could have skipped writing this post, as I now see the first comment at Wenzel’s site, by Perry Mason.  Unfortunately, Wenzel’s reply makes clear that he doesn’t get Perry’s point.

Mainstream Media has Lost Control: Let the Whining Begin



Actually, the “begin” part of the title might be a bit of an exaggeration as we have heard whining on this front for some time.  Allow me to offer a recent – and rather blatant – example:

Press Versus Liars: Doing Good Journalism in These Trying Times

That’s the headline at Spiegel.  Perhaps it doesn’t come across the same way in German, but it sure sounds over-the-top in English.  There is what you hear from the (established) press, and there is what you hear elsewhere.  What you hear from the press is true; what you hear elsewhere is lies.

Spiegel recognizes that credibility is lost; restoring that credibility is, somehow, your responsibility (emphasis added):

We are living in times of growing tension and near societal hysteria in Germany in the wake of the massive influx of refugees. One of the first victims of this development has been the media's credibility. Restoring public trust will require considerable effort by journalists -- but also on the part of their readers.

When they p*ss on your shoes and tell you it’s rain, whose responsibility is it to change the perception?  In the meantime, it might be best to no longer associate yourself with the one doing the p*ss*ng.

Apparently it is only the uninformed who are causing the problem:

First, many, many people inform themselves thoroughly about the complicated world in which we live. These people tend not to be very outraged, which is also why their voices often go unheard amid the cacophony.

Understand: if you accept what you are told, you will not be outraged.  This is a truism.  Question what you are told and spend three minutes (or less) investigating the story and you will become curious.  Spend an hour or two looking further into it and only then will you become outraged.

Spiegel goes on to note a few examples of outrage.  In the grand scheme of things, relatively meaningless media transgressions – nothing questioning the major issues and events of the day.  In any case, some self-help is offered by the author.

But, what is it you – the reader – must do?  For one, accept that the mainstream dialogue is not mainstream – that it is, in fact, robust and all-encompassing:

The oft-disparaged "mainstream media" do not exist. The conservative Frankfurter Allgemeine Zeitung and right-leaning Die Welt have adopted different editorial lines from those of the left-leaning Die Zeit or Süddeutsche Zeitung. There are some media whose perceptions of reality border on fantasy.

In other words, accept the false left-right narrative and accept the allowable limits of conversation and you will never again label such outlets as “mainstream.”

The internet has fundamentally changed the conversation for many.  The narrative is not so easily controlled.  Certainly not every alternative narrative is accurate; however, many alternative narratives throw a few more bits of doubt in the minds of readers.

Conclusion

I guess we should ignore a leading German journalist who says he was bribed by the CIA; Operation Mockingbird, which never happened and even if it did no one would do such a thing today; pro-war media pundits who are on the payroll of defense contractors and others who benefit from international conflict; the official 911 investigation team was fed lies.