Tuesday, October 21, 2014

White House Confirms Air Drop Intended for ISIS

Apparently the US Air Force air-dropped some weapons in a region controlled by ISIS. 

An ISIS-associated YouTube account posted a new video online Tuesday entitled, “Weapons and munitions dropped by American planes and landed in the areas controlled by the Islamic State in Kobani.”

This must not be right – just because there is a video doesn’t prove anything:

The authenticity of this latest video could not be independently confirmed…

Exactly my point.

Let’s ask the question directly; it doesn’t get any more direct than straight from the top:

On Monday, White House Deputy National Security Advisor Ben Rhodes said the U.S. government was confident that the emergency airdropped supplies for the Kurdish forces near Kobani were falling into the right hands.

“We feel very confident that, when we air drop support as we did into Kobani… we’ve been able to hit the target in terms of reaching the people we want to reach,” Rhodes told CNN.

There you have it; the White House is “very confident” that the weapons “were falling into the right hands.”

(HT ZeroHedge)

Saturday, October 18, 2014

Unit of Value or Unit of Measure

Answer first, analysis later: money is a perfect unit of measure; there is no such thing as a unit of value.

John Tamny is out with a piece suggesting that David Gordon, of the Mises Institute, inadvertently attacked Ludwig von Mises when Gordon reviewed Money, the book released last summer by Steve Forbes and Elizabeth Ames. (HT EPJ)

I have, in the past, found much to agree with in Tamny’s writings, and some to disagree with.  I have agreed with him on topics that were disagreeable to some in the Austrian school.  Sadly, Tamny even prompted me to write one of the dumber posts I think I have ever written – or at least one aspect of my post was such (boy, I hate re-living that one…).

Back to the current Tamny piece:

What struck this writer as odd is that in lightly attacking Forbes and Ames, Gordon only succeeded insofar as he perhaps unintentionally revealed a strong disagreement about money with the intellectual father of the Institute which employs him, Ludwig von Mises.

I am not going to deal with the views of Mises on this matter, for two reasons: first, I don’t read enough of Mises directly to comment either way.  I have explained why this is so elsewhere, but in a nutshell: I want to work through problems of economics myself; if I later find that I landed where someone like Mises has previously landed, I feel pleased.  If I find I disagree with someone like Mises, I feel confident.  But for me, the journey is most important.

Second, if someone wants to challenge David Gordon on just about any topic, he better bring his lunch…and dinner.  Don’t let Gordon’s diminutive physical stature and mild manner fool you – not too far below the surface, one will find a mind more than capable of dealing with any challenge.  In any case, Gordon has already done this work.

In this piece, Tamny is mostly wrong.  He is also mostly wrong on the same issues upon which his boss and co-author of the subject book, Steve Forbes, is also mostly wrong.  Let’s walk through it….

Gordon has a problem with the Forbes and Ames assertion that money is merely a measure meant to facilitate exchange.

Again, I will leave the defense of Gordon to Gordon.  From this quote, the key open question is “measure” of what?  Tamny answers:

Rather than viewing money as a concept, meaning a measuring rod of value meant to foster the exchange of actual value…

There can be no such thing as “a measuring rod of value” if value is subjective.  Last time I checked, I think it still is.

Friday, October 17, 2014

For Every Question the Answer is War

Forgive a somewhat rambling post – several recent and not-so-recent events have prompted my thoughts here….

When I started this blog, I didn’t really have it in mind that I would write much about history – and that much of that history would focus on war.  Also when I started this blog, while I felt empathy with those who are victims in war – the non-combatants foremost – my further writing and reflection has brought this empathy into sharp focus.

I think the first revisionist war topic that I wrote about with some substance was the myth behind Pearl Harbor – in some ways a subject no longer controversial to even the professional supporters of FDR, although still a narrative than might result in a fist fight if questioned in the wrong crowd. Since then, the list of my work on this topic has grown rather long.

After several posts on the revisionist view of war history, I began to understand one reason I was drawn to this topic: war and the military is a god to many in the West, certainly in the United States.  It is supported by myths (the Japanese attacked Pearl Harbor as a complete surprise, the bombs ended the war, the US brings democracy to the world, Germany started every war, blah, blah, blah); these myths deserve to die. 

In my own small way, I felt I could contribute to destroying these myths – I am satisfied if I feel I might have reached even one person with a post on this topic.

After some time, I began to put together something else: for a libertarian, war is THE issue.  Now, I don’t mean to suggest that to be a libertarian this must be so; I am suggesting that in war, every violation of freedom is to be found – whether on the (so-called) winning side or losing side.  Absent war, life for all would be much freer.

In war, everything about liberty and freedom hinges.  To begin: the life and death of the victims.  I recall reading, in the book Nuclear Deterrence, Morality and Realism, by John Finnis, Joseph M. Boyle, Jr., and Germain Grisez:

If I may hark back to those charming debates of the 1950s, it has always seemed to me that red is better than dead because the red can choose to be dead but the dead cannot choose to be anything at all.

It is, of course, unarguable.  Not to get into an afterlife discussion (as you are free to advance yourself toward this end whenever you like), is there any separation from liberty more complete and permanent than death?  Yet, if one finds himself in a situation that he prefers “dead” to “red” (so to speak), he can always make this choice for himself.  “Give me liberty or give me death.”  Those alive are free to choose; those taken to death without a choice?  Not so much.

I was happy to find that once again, like on so many other topics, I found myself in a square occupied by Rothbard many years before.  I recall reading or hearing somewhere that Rothbard felt war was the paramount issue, the most significant issue to address by those of us who care about liberty.  I can’t find the quote (although, a read of this article, sent to me by a friend, will likely lead you to this conclusion).  I found another quote that at least somewhat comes to the same point:

It is in war that the State really comes into its own: swelling in power, in number, in pride, in absolute dominion over the economy and the society.
               Murray Rothbard

While this quote does not touch on the issue of death separating the victim from liberty on this earth, I have no doubt regarding Rothbard’s view on this matter.

This sounds so simple to me now; humbly I submit it wasn’t always so for me.

The QE Will Continue Until Inflation Improves

Ambrose Evans-Pritchard has nailed this one, hit it out of the park.  I am not kidding.  He has written a piece entitled “World economy so damaged it may need permanent QE.” 

Combined tightening by the United States and China has done its worst. Global liquidity is evaporating.

What looked liked [sic] a gentle tap on the brakes by the two monetary superpowers has proved too much for a fragile world economy, still locked in "secular stagnation".

I don’t want to get into a debate about the concept of “tightening”; I accept that to people like AEP a slowing of monetary pumping is the same as tightening.

There is no growth; there is no recovery. 

If this growth scare presages the end of the cycle, the consequences will be hideous for France, Italy, Spain, Holland, Portugal, Greece, Bulgaria, and others already in deflation, or close to it.

Forward-looking credit swaps already suggest that the US Federal Reserve will not be able to raise interest rates next year, or the year after, or ever, one might say.

He is correct; other than a feeble attempt here or there, the Fed cannot.

Ambrose offers a point that would not be considered news to an Austrian:

It is starting to look as if the withdrawal of $85bn of bond purchases each month is already tantamount to a normal cycle of rate rises, enough in itself to trigger a downturn.

I believe it is consistent with Austrian theory about money and credit to suggest that even a slowdown in the rate of expansion will lead to the bust.  A stop or even a reversal is not necessary.  Perhaps instead of mocking Austrians, Ambrose might pay some attention.

Put another way, it is possible that the world economy is so damaged that it needs permanent QE just to keep the show on the road.

Ambrose is right, at least for the foreseeable future.  But it can’t last forever; just ask Mises:

Inflation can be pursued only so long as the public still does not believe it will continue. Once the people generally realize that the inflation will be continued on and on and that the value of the monetary unit will decline more and more, then the fate of the money is sealed. Only the belief, that the inflation will come to a stop, maintains the value of the notes.

Ambrose should also listen to another point by Mises:

Continued inflation inevitably leads to catastrophe.

What do I think will happen?  Take it from Ambrose’s piece:

Traders are taking bets on capitulation by the Fed as it tries to find new excuses to delay rate rises, this time by talking down the dollar. "Talk of 'QE4' and renewed bond buying is doing the rounds," said Kit Juckes from Societe Generale.

I see no reason for money printing to stop until consumer price increases become politically intolerable.  This is the “inflation” that the “people” in Mises’ statement are watching (I know it is not the “inflation” to which Mises refers).  Of course, they are watching the wrong walnut shell, but it is the one they are watching.

Central banks might try to slow it down or stop for a time, but I suspect they will reverse course when markets start to fall.

Eventually the Fed will have to stop, as eventually, I suspect, consumer price inflation will show signs of life.  But if consumer price inflation doesn’t show such signs, or for as long as it doesn’t, what would prompt the credit expansionists to quit their game?

But if they wait that long, will it be too late?  Will too many have lost faith in the inflated currency such that, as Mises suggests “Once the people generally realize that the inflation will be continued on and on and that the value of the monetary unit will decline more and more, then the fate of the money is sealed.”

My guess the pumping will continue until the Fed (and other major central banks) faces mass consumer price inflation – “mass” being subjectively defined as that level which is politically unpalatable.

The Fed will then take actions to end it – and a central bank will have the tools to end it, painful as the implementation of those tools might be to most of us.  If necessary, they will even tie the currency to gold (a phony standard, of course) to protect the currency – at a value not easily comprehended today, perhaps, but tie it they will (as a last resort).

This is when asset prices will finally find the level that they have been attempting to find since around 1982.

If the consequence is mass-inflation heading toward hyper-inflation, the central banks will protect their currency.  Asset prices (and the impact to those of us who live in the general economy) be damned.

Thursday, October 16, 2014

Sennacherib’s Return

The exclusion of non-combatants from the scope of hostilities is the fundamental distinction between civilized and barbarous warfare.
FJP Veale

Sennacherib, the great king,
And their small cities, which were beyond numbering I destroyed, I devastated, and I turned into ruins. The houses of the steppe, (namely) the tents, in which they lived, I set on fire and turned them into flames.

Over the whole of his wide land I swept like a hurricane. The cities Marubishti and Akkuddu, his royal residence-cities, together with small towns of their area, I besieged, I captured, I destroyed, I devastated, I burned with fire.

In the course of my campaign, Beth-Dagon, Joppa, Banaibarka, Asuru, cities of Sidka, who had not speedily bowed in submission at my feet, I besieged, I conquered, I carried off their spoil.

As for Hezekiah the Judahite, who did not submit to my yoke: forty-six of his strong, walled cities, as well as the small towns in their area, which were without number, by levelling with battering-rams and by bringing up seige-engines, and by attacking and storming on foot, by mines, tunnels, and breeches, I besieged and took them.

I captured their cities and carried off their spoil, I destroyed, I devastated, I burned with fire.

Furthermore, 33 cities within the bounds of his province I captured. People, asses, cattle and sheep, I carried away from them as spoil. I destroyed, I devastated, and I burned with fire.

The cities which were in those provinces I destroyed, I devastated, I burned with fire. Into tells and ruins I turned them.

…strong cities, together with the small cities in their areas, which were countless, I besieged, I conquered, I despoiled, I destroyed, I devastated, I burned with fire, with the smoke of their conflagration I covered the wide heavens like a hurricane.

Veale continues his examination of the Advance to Barbarism, focusing first on the World War II bombing of areas outside of the battlefield and culminating in the carpet bombing of German cities.  This bombing marked the complete repudiation of one of the cornerstones of the concept of civilized warfare: warfare should be the concern only of the armed combatants engaged; non-combatants should be left outside of the scope of military operations.  It marked the return, or advance as Veale puts it, to a form of warfare for which Sennacherib the Assyrian was well known.

May 11, 1940

 Veale introduces J. M. Spaight and his book “Bombing Vindicated.” Spaight describes the awesomeness of this day, the “splendid decision” to bomb German targets well outside of the area of military operations.  The next day, newspapers announced that “eighteen Whitley bombers attacked railway installations in Western Germany.”

Looked at from today’s eyes, there is nothing shocking in this statement; however, compared to what came before in European wars, this was news:

Western Germany in May 1940 was, of course, as much outside the area of military operations as Patagonia.

At the time the battle for France was in high gear, yet the pilots flew over these battlefields to reach their objective:

To the crews of these bombers it must have seemed strange to fly over a battlefield where a life and death struggle was taking place and then over a country crowded with columns of enemy troops pouring forward to the attack…Their flight marked the end of an epoch which had lasted for two and one-half centuries.

…against a background of prosaic twentieth railway installations we can imagine the grim forms of Asshurnazirpal and Sennacherib stroking their square-cut, curled and scented beards with dignified approval….

This was only the beginning, with the culmination to come in Dresden some five years later, but this is to get too far ahead in the narrative.

Tuesday, October 14, 2014

Poland Sees Reality

It seems certain of the Central European countries are not going along with Washington’s desires to isolate Russia due to the issues in Ukraine.  Some combination of reality and realpolitik has overcome the situation, even for several members of NATO:

So let’s consider Hungary, a NATO member whose prime minister recently named Putin’s Russia as a political model to be emulated. Or NATO member Slovakia, whose leftist prime minister likened the possible deployment of NATO troops in his country to the Soviet invasion of 1968. Or NATO member Czech Republic, where the defense minister made a similar comparison and where the government joined Slovakia and Hungary in fighting the European Union’s sanctions against Russia. Or Serbia, a member of NATO’s “partnership for peace” that has invited Putin to visit Belgrade this month for a military parade to celebrate the 70th anniversary of the Red Army’s “liberation” of the city.

That’s three members and one partner.  Several of these complaints were registered early on.  What has changed?

Then there is Poland, which until recently was leading the effort within NATO and the European Union to support Ukraine’s beleaguered pro-Western government and punish Putin’s aggression.

For many reasons, I consider the critical player in this match to be Poland: historically, a buffer zone between east and west in Europe and a pawn of western powers in the run-up to World War II.  Currently a member of NATO, one who previously led the charge for tough talk and tough actions against Russia.

When Poland was talking tough in this most recent calamity, I openly questioned the sanity of their political leadership.  Regardless of one’s views on the situation in Ukraine or the role played by either the Russian or US governments, one look at a map might suggest to Poland’s political leadership a more tempered position.  A consideration of the true value of an American guarantee might be in order.  A moment’s pause to consider the transitioning relationship between Germany and Russia could be expected.  A consideration of the different views of Poland’s immediate neighbors might be wise.

Apparently, times have changed:

This month its new prime minister, Ewa Kopacz, ordered her new foreign minister to urgently revise its policy. As the Wall Street Journal reported, she told parliament she was concerned about “an isolation of Poland” within Europe that could come from setting “unrealistic goals” in Ukraine.

Some common sense on this topic coming from Poland’s leadership.  Again, whatever one’s view of the backstory of this conflict, Polish security requires a reality-based assessment of the situation – not action based on promises from the West that will prove to be as impossible to keep as were the British and French guarantees of 1939.

More, from Bloomberg:

“We shouldn’t rush to become part of this military conflict,” Kopacz said as she presented her cabinet. “When the big European family decides that we want to help” Ukraine, “then we should take part in providing help, but together with other countries.”

If actions follow these words, it represents a marked change from Poland’s previous stand on this issue; it also increases the likelihood of a calmer, peaceful resolution.

Finally, it continues to develop the possibility for the integration of Germany toward the east.

Saturday, October 11, 2014

War is for Control

Not oil, not military-industrial profits, not the bankers; war is for the purpose of control.  Control of the most valuable, renewable resource on the planet – people.  Control through the toolkit of regulatory democracy if possible, authoritarian rule where the population is not as easily fooled.

The elite of the Anglo west pursue this objective; since the Great Rapprochement between Britain and the United States in the late nineteenth century the primary tool for western control of the world’s population has been the United States government.

Justin Raimondo is out with a post entitled “Why This War?”  In it, he describes Progressivism as the motor behind this push – progressivism rooted in early twentieth century America just at the time when the elite purposely moved their primary tool from Britain to the United States:

America’s ruling elite has been "progressive" since the dawn of modernity, right before the first world war.

Raimondo then cites Rothbard, writing of this period and movement; from Rothbard:

In his editorial in the magazine’s first issue in November 1914, Herbert Croly cheerily prophesied that the war would stimulate America’s spirit of nationalism and therefore bring it closer to democracy…. True, European war collectivism was a bit grim and autocratic, but never fear, America could use the selfsame means for ‘democratic’ goals…. As America prepared to enter the war, the New Republic eagerly looked forward to imminent collectivization, sure that it would bring “immense gains in national efficiency and happiness.” After war was declared, the magazine urged that the war be used as “an aggressive tool of democracy.”

Somewhere in the back of my mind I recall that when many use the term “democracy” (and here I refer to Croly, not Rothbard), they do not mean Switzerland; they mean something akin to communism.

Raimondo points out that it was usually the democrats – the liberals – that led the effort or push for war and for global-reaching institutions.  Wilson, FDR, Truman, LBJ.  Bush II could be considered an exception to this rule.

This ideology has a name: we call it "progressivism." It has a long history, starting with Teddy Roosevelt and his intellectual publicists, continuing through the Great War and the run-up to World War II – when it was the left that was screaming for US intervention in the European conflict – and its aftermath.

There was no US interest in the great wars of the first half of the twentieth century, not if by “US interest” one means of interest or benefit to the vast majority of people living within the geographic boundaries of the United States.  There was certainly a necessity for the US to involve itself in these wars if it was to fulfill its calling as the replacement tool for global government. 

This is why our foreign policy consists of "endless war," as Greenwald puts it: because if your goal is world domination, then the war to establish a global authority – with Washington as its capital – must be necessarily open-ended. That’s because there will always be resistance to such a project: once a rebellion is put down in the Middle East, for example, another one is more than likely to pop up in Africa, or eastern Europe, or someplace else.

It is the intent toward global control and the rebellion to it that is the answer to “why the wars.”  People rebel – not oil, not gas pipelines.  People.

It is the people that are to be brought under control.  Globally.

The empire builders will, in the end, fail; we are living through the transition – it may be a long one.