Archive for October, 2011

Hippie platform of Occupy Wall Streeters

October 31, 2011

The motley groups of Occupy Wall Streeters that gather across the United States and elsewhere are composed largely of individuals who are insufficiently intelligent and/or insufficiently educated and/or insufficiently articulate to express coherent policy objectives.  In such circumstances, one can draw inferences about political viewpoints only from private behavior that is revealed in the public square. And this is what we find:

“Mobs blocking the streets and interfering with commuters. Signs and banners emblazoned with obscenities. Signs suggesting violence against authorities and businessmen. Endorsements from both the Nazi Party and the Communist Party. Signs blaming ‘the Jews’ for all things bad. Reports of sexual assaults on teenage girls and, in the case of Occupy Glasgow, Scotland, a gang rape. Rock-throwing. ” Robert Knight, ‘Massaging the news for the masses’, The Washington Times, October 31, 2011

When Michael Moore appears on television to endorse a new political movement, one knows instinctively that that movement will be as incoherent as Moore’s troubled mind and as unattractive as Moore’s gluttony-bloated belly-fat. Occupy Wall Streeters far outstrip Michael Moore, however, as they strip off in the public square to engage in body- functions usually reserved for the privacy of bedrooms and bathrooms.

The political philosophy of the Occupiers is roughly equivalent to that of August 1969 Woodstock hippies.  Fundamentally, it is anti-American and anti-Western civilization – well anti-civilization to be more accurate. Somehow, however, the Occupiers prefer to lie in their own filth in American public squares rather than to migrate to North Korea, Somalia,  South Yemen, or Burma, where they would truly be able to live without any of  the handicaps of a capitalist system.

I wonder why?

Washington politicians experience a Bernie Madoff moment

October 30, 2011

When Bernie Madoff first established his now infamous investment fund, he intended it to be a reputable program, utilizing investments paid in by trusting clients to produce above-average returns. Bernie, of course, would take his well-earned cut. But the investors would watch their portfolios flourish under Bernie’s wise and skillful governance.

Somewhere down the road, Bernie went off the rails.  His taste for high-living increased well beyond  his ability to finance those tastes through productive investments. Oh! those fancy yachts,  fancy houses,  fancy cars, expensively tailored suits;  those fancy women, and those exotic vacations!  How these little luxuries sucked the monies out of his fund.

So Bernie became a big-time crook, syphoning everything out of the fund, to keep him living high on the hog.  Bernie was a real charmer, especially in those tailored suits and with that carefully coiffured hair-style; and he paid freely to frequent the most expensive country clubs and inhabit the world’s classiest hotels.  Bernie proved to be especially attractive to rich Jews – especially lonely Jewish widows. Bernie learned how to fleece the gullible of everything that they had. As long as the money kept rolling in, Bernie could milk his Ponzi Scheme while pretending to grow the portfolios that were entrusted to his untrustworthy care.

In September 2008, Bernie’s world collapsed.  As the stock market collapsed, investors began to withdraw funds from their accounts in significantly larger amounts than the volume of new investments. That is the moment of reckoning for any Ponzi operator. Bernie considered flight, but where could he possibly go in a shrunken world. Niger had little attraction for this man of culture.

So Bernie confessed,  attempted to commit suicide, failed, and is now living rent-free in public housing. All the yachts, houses, expensive suits, fancy women and exotic vacations are now merely figments of Bernie’s dreams.

In the 1930s, an American president, FDR, set out in a similarly modest manner to initiate an investment fund for all Americans. He called it ‘social security’.  Like Bernie, FDR meant well in the beginning.

Like Bernie, FDR was a charmer, as long as those hidden leg-braces held up, and the cameras did not come too close. The fund would be self-financing, paid for out of payroll taxes, and would provide a modest but positive return for all invested in it. FDR’s return would be re-election after re-election and the confirmation, he believed, of a permanent Democratic Party majority.

 FDR died before he could corrupt the scheme;  but it did not take long for American politicians – right as well as left –  to identify a spending pot that could be exploited. And such spending pots are always exploited by the venal creatures who  inhabit the nation’s capital.

2010 was the Bernie Madoff  moment of reckoning for the looters of the Social Security Ponzi Scheme. For most of its 75-year history, the program has paid its own way through a stream of supposedly dedicated payroll taxes that appeared to generate large surpluses over the past two decades. Nevertheless, in 2010, social security went cash negative. The cost of benefit payments outstripped the revenue raised from payroll taxes. In 2011, the negative cash flow will amount to $246 billion.

So what? The gullible respond. The Social Security Trust Fund is in excellent shape, with $2.6 trillion of accumulated surpluses in its groaning coffers. That, of course, is what Bernie Madoff’s clients believed in September 2008. Likewise, those who rely on social security are about to discover that their cupboard is also bare. 

Washington politicians have stolen every last red cent from the Fund.  Like Bernie Madoff, Washington politicians have left a pile of valueless IOU’s – in the form of Treasury Notes – in place of the hard-earned taxpayer dollars that they have stolen to live high on the political hog and to secure re-election after re-election.

Bernie Madoff – in the end – confessed and tried to take his own life. He was convicted and is now paying for his crimes through incarceration. Can we expect George W. Bush, Barack Obama, Harry Reid, Nancy Pelosi, Barney Frank  and Chris Dodd to attempt to overdose on ambien pills and, should they fail, to rot in jail on 150-year terms?

Hey! These guys are politicians. By comparison, Bernie Madoff was a real gentleman.  As Social Security tanks, the politicians have access to resources beyond Bernie’s reach – tax increases and coercive  benefit reductions – and they will not hesitate to head for comfortable  foreign shores should the domestic scene heat up.  Unless, that is, like Colonel Gadaffi, they are slow to quit, and end up dragged out of the Washington sewer system, with a rebel bullet in the back of  each of their respective heads.

Caught in the cross-fire, so to speak!

Paul Ryan scores Barack Obama: little man but Big Divider

October 29, 2011

If more Americans paid serious attention to politics and to those who represent them in their constitutional republic, they would identify Representative Paul Ryan (R: Wisconsin) as the jewel within the current crown.  Of course, many of them would not share his political perspective – Ryan after all is a moderate Republican in a nation polarized  well to the left and well to the right of his stated positions.

Rather, they would recognize that Paul Ryan is a thinker, and as such is unique in current U.S. national politics:

“He thinks. He studies. He reads.  Then he comes forward to speak, calmly and at some length about what he believes to be true.  He defines a problem and offers solutions, often providing the intellectual and philosophical rationale behind them.  Conservatives naturally like him – they agree with him – but liberals and journalists inclined to disagree with him take him seriously and treat him with respect.” Peggy Noonan, ‘The Divider vs. the Thinker’, The Wall Street Journal, October 29, 2011

This past week, Paul Ryan spoke about  ‘The American Idea’ at Washington’s Heritage Foundation. Calmly and thoughtfully he identified the limitations of President Barack Obama with respect to the current crisis that confronts the American economy:

“He scored the president as too small for the moment, as ‘petty’ in his arguments and avoidant of the decisions entailed in leadership.  At times like this, he said, ‘the temptation to exploit fear and envy returns.’  Politicians divide in order to ‘evade responsibility for their failures’ and to advance their interests. The president, he said, has made a shift in his appeal to the electorate. ‘Instead of appealing to the hope and optimism that were hallmarks of his first campaign, he has launched his second campaign by preying on the emotions  of fear, envy and resentment.’ ” Peggy Noonan, ibid.

So, instead of making serious contributions to resolving the problems that confront the United States economy – as Representative Paul Ryan indisputably always does – President Obama  is out campaigning, earlier than any incumbent President in the history of the Republic.  His campaign seeks to exploit divisions within the society that he was elected to lead, to weaken the glue that holds Americans together through troubled times.

President Obama tells America that it is the rich versus the rest, understanding of course how the ballot box numbers mount up if that slur is accepted. He endorses Occupy Wall Street confusions, perhaps because those confusions mirror his own lack of understanding of  economics 101.

Most particularly, President Obama either does not understand, or chooses not to acknowledge that the fundamental problem with the U.S. economy is its slow drift away from laissez-faire to crony-capitalism. The financial collapse of September 2008 was driven primarily by  politically well-connected fat-cats, such as Franklin Raines and James Johnson,  who ran Fannie Mae and Freddie Mac, and who for the most part- with one decent exception where a shamed senior executive of Freddie Mac hanged himself in his basement – walked away with the taxpayers’ wealth in their pockets.

When most members of Congress and the man in the White House desire only two things –  to receive campaign contributions and to be re-elected –  the Republic is in serious jeopardy. All of President Obama’s presidential  behavior surely is explained by those two desires.

That is why Paul Ryan accurately scores the president as a little man but a big divider.

 

All is not well in Lotus Land as Euros gorge on bailout fruit

October 28, 2011

“In short, everyone is bailing out everyone.  The larger problem betrayed by yesterday’s agreement is that European leaders continue to act as if they are mainly dealing with a crisis of confidence, which can be restored with ever more far-reaching bailout schemes.  Absent from this week’s communiques are any new ideas for promoting the structural economic reforms – both at the periphery and at the center of the euro-zone – that might create real confidence in the euro-zone’s long-term economic prospects.  The new bailout money Greece is getting doesn’t even come with new conditions for implementing structural reforms, as the first bailout package did.” Editorial, ‘Everyone Bails Out Everyone’, The Wall Street Journal, October 28, 2011

The principal achievement is the agreement to enforce a 50 per cent write-down on private holdings of Greek debt. Even this haircut, comes with a bailout clause. Currently, 40 per cent of all Greek debt is held by the European Central Bank, the International Monetary Fund, and euro-zone governments. There is to be no haircut for these debt-holders. So the agreed-upon write-down will only reduce outstanding Greek debt to 120 per cent of gross domestic product by 2020, and this is in terms of a best- case scenario.

To prevent the write-down from bankrupting European banks, the deal requires euro-zone banks to achieve a 9 per cent capital ratio for core Tier 1 capital by June 2012.  Even with this requirement – which may or may not be achievable without government subsidies – national governments have agreed to increase their own bank guarantees. Basically, cutting out the euro-speak jargon, this means that more taxpayer guarantees are required to forestall fears that euro-zone governments, already deep in debt-holes of their own making, will fail to stabilize the system.

So, the summit leaders also agreed to pump up the E440 billion European Financial Stability Facility.  This Fund is now authorized to act as a bond insurer, guaranteeing first-losses up to an as yet undetermined amount on new issuance of euro-zone sovereign debt.  What happens when that commitment itself renders some sovereign debts irremediable is not spelled out. But the abolition of Lotus Land has to be the unspoken final solution.

It is a remarkable feature of the world’s stock markets that they always seem to respond positively to bailouts, even though bailouts are ultimately destructive of the capitalist system.

When will they ever learn?  When will they ever?

Remedial economics for those who occupy Wall Street

October 27, 2011

” Nan Terrie learned an expensive lesson last week about the importance of property rights. ‘Stealing is our biggest problem at the moment,’ the 18-year-old protester told the New York Post. ‘I had my Mac stolen – that was like $5,500.’  Why? because she left it in a public place, amid a crowd demanding the redistribution of wealth. Imagine that.  Perverse incentives were at work at Occupy Boston, where 36-year-old Andrew Warner told the Boston Herald: ‘It’s turning into us against them.’  By ‘them’ he didn’t mean rich bankers but street vagrants:  ‘They come in here and they’re looking at it as a way of getting  a free meal and a place to crash, which is totally fine, but they don’t bring anything to the table at all.” Editorial, ‘Remedial Economics’, The Wall Street Journal, October 27, 2011

An 18-year-old girl may be excused for her abject  ignorance of economics 101; but a grown-man of 36 surely may not.  Property rights are central to the sound performance of any economy. And by property rights, I mean the property rights of individuals, the imprescriptible rights to their own human capital and to the non-human capital that they have accumulated by their own endeavors and by inheritance from their predecessors. 

Where such rights are not well-grounded, relationships between individuals quickly descend into the Hobbesian jungle, where there is no ‘mine’ and ‘thine’ and where life tends to be short and brutal, save for those who are especially well-endowed with instruments of power. Assuredly, the Hobbesian jungle is not an environment that most of the losers who join Occupy Wall Street protests would find congenial.

American schools and universities are largely responsible for this prevailing ignorance of basic economics.  They are over-populated with educators who still worship at the shrine of Josef Stalin and Mao Zedong – mass murderers both –  who destroyed their economies just as they wiped out many millions of their abject subjects. 

Teachers who are unaware of the terrible hardships experienced in the USSR during the early 1930s, as Stalin imposed collectivisation  and famine across the Ukraine, and much of the rest of his Empire,  and of the famines and mass deaths experienced in China from the mid-1960s onwards as Mao led with the Great Leap Backwards, and followed up with the  Anti-Cultural Revolution, are unfit to be in any classroom in the United States.

Those protesters who waste their time sitting in public garbage dumps rambling incoherently about ‘Occupying Wall Street’ would be well-advised to read Adam Smith’s Wealth of Nations  instead of internet -surfing on expensive laptop computers.  There would be no danger of their book being stolen – since many of their fellow-occupiers are functionally illiterate – and at least  they would end up understanding why Stalin’s USSR and Mao’s China are poster-boys for failure, and not harbingers of economic success.

The United States is politically divided: into makers and takers

October 26, 2011

Americans are far from enthusiastic about the state of the national economy at this time. And rightly so.  More than 14 million of them are unemployed, and many of these have been unemployed for more than six months. In June 2011, 45.2 million Americans received food stamps – close to an all-time record number.  The Census Bureau reports that 46.2 million Americans lived in poverty in 2010 – a 17 year high. 

A recent independent poll found that 77 per cent of Americans believe that the country is in recession.  If this belief  is factually correct, it implies that the country has slipped into a double-dip recession. And it has done so because of misguided economic policies promoted and imposed by the federal government, most especially since September 2008.

The angst that naturally attaches to such an apparently bleak situation undoubtedly embraces a large majority of the population – as it should.  Unfortunately, it accentuates an already-existing political divide that threatens to balkanize the United States –  a divide between makers and takers within the political system:

Consider today’s economic reality. Last year, 47 percent of Americans paid no federal income tax.  The Wall Street Journal recently reported that nearly half (48.5 percent) of all Americans received ‘some type of government benefit in the first quarter of 2010,’ according to census data, making American families ‘more dependent on government than ever.’ Matt Mackowiak, ‘Makers, takers and occupiers’. The Washington Times, October 26, 2011

Let us say, for the sake of argument, that Americans are roughly divided between those who are net contributors to the federal government – the makers – and those who are net recipients from the federal government – the takers.  Not everyone will split accordingly into supporters of limited, fiscally responsible government, on the one hand, and into supporters of unlimited, fiscally irresponsible government, on the other. Traditionally, that has not been the American way. But one cannot ignore the reality that political incentives lie somewhat in that direction.

In such circumstances, given the economic reality that America must balance its federal budget and drive down its indebtedness if Americans are to compete successfully in the global market-place, one would expect that the President would lead the nation to confront its fiscal imbalances, while reassuring the takers that this is the only road to their becoming makers in the not-too-long-distant future.

Alas! President Obama has chosen to abdicate such leadership and instead to pursue re-election in 2012 by accentuating the political divide between the makers and the takers, pressing for tax increases on the makers and for deficit-enhancing expenditure increases targeted at the takers:

Class warfare may make for useful political rhetoric, but one inconvenient fact persists: As Fox News Channel host Sean Hannity has said, ‘I never got a job from a poor person.’ Matt Mackowiak, ibid.

Fundamentally, all Americans are in this crisis together and, as Abraham Lincoln so wisely pointed out 150 years ago, ‘A House divided against itself cannot stand.’ 

An effectively working capitalist system is the only route forward for this great nation. For that to happen, self-seeking politicians had better stand aside and allow the restorative impulses of laissez-faire capitalism to work their magic, as they have done so many times in the past.

As the economy pulls itself out of recession, many of the takers will become makers and a working political majority will reinforce the shift of the United States out of state crony- capitalism into laissez-faire capitalism as a stable political as well as economic reality.

The New Libya to impose fundamentalist Sharia Law

October 25, 2011

New Libya is off to the kind of splendid start that will surely warm the heart of  United States president, Barack Obama. 

President Obama’s 2011 strategy for American involvement with alleged terrorists is to ‘whack’ them with drone missiles rather than to capture them and to bring them to trial. The Libyan rebels followed suit late last week by ‘whacking’ Colonel Gadhafi while he was held helplessly in their grip, without concerning themselves with the complexities of any due process criminal trial for his alleged misdeeds.

President Obama is noticeably silent on issues of Islamic fundamentalism, surely much more so than President Bush. He has not yet proposed to promote polygamy within the United States, or to weaken the position of women.  But he is currently introducing an executive policy designed to  release under-water borrowers from a requirement to pay the market rate of interest on their mortgages.

Within days of the brutal execution of Colonel Gadhafi, the Interim Leader of the National Advisory Group that now rules Libya, affirmed that the new Libyan government will enforce a fundamentalist version of Sharia Law:

In his landmark speech on Sunday announcing the liberation of the country from the rule of Col. Muammer Gaddafi, Libya’s provisional leader Mustafa Abdul-Jalil vowed to suspend the law requiring a man to obtain permission from his first wife before marrying a second one and to outlaw interest on loans in accord with fundamentalist Islamic rules…’As an Islamic country, we adopted sharia as the principal law’, Mr. Abdul Jalil said at the ceremony in the eastern city of Benghazi…’There are good intentions to regulate all banking law,’ he said. ‘we especially seek to establish Islamic banks that don’t deal with interest and abolish all banking interests in the future according to Islamic tradition.’   ‘Interest, he said ‘creates disease and hatred among people.’ Borzon Daragahi, ‘Interim leader shocks with talk of Islamic law’, Financial Times, October 25, 2011

Well done, Prime Minister  Cameron! Well done President Sarkozi!  Well done President Obama!  You have crafted well for the future of Libya!

Do pump precious Western taxpayers’ monies into taking Libya back to the Stone Age.  ‘Occupy Wall Street’ will surely appreciate your efforts!

 

Larry Summers panders snake oil solutions to US housing market dis-equilibrium

October 24, 2011

“The central irony of a financial crisis is that while it is caused by too much confidence, borrowing and lending and spending, it can be resolved only with more confidence, borrowing, and lending and spending.  This is true, above all, of housing policies.  Fannie Mae and Freddie Mac , government-sponsored enterprises (GSEs) whose purpose is to mitigate cyclicality in housing and that today dominate the mortgage market, have become a textbook case of disastrous and pro-cyclical policy.” Lawrence Summers,  ‘How to save the housing market’, The Washington Post, October 24, 2011 and The Financial Times, October 24, 2011

So how does the former Chief Economic Adviser to President Obama define the so-called housing market problem?  As one would expect from a hydraulic Keynesian retread, he defines it in terms of the inevitable market consequences of a government-fueled house price and construction  bubble, that eventually burst, as do all such bubbles. 

Nominal losses on owner-occupied housings amount to $7 trillion since 2007.  Construction of new single-family homes has plummeted from 1.7 million per annum in the mid-2000s to 450,000 per annum since the burst bubble.

Why this should surprise or concern a professional economist is puzzling indeed.  Home-owners’ nominal wealth increases unrealistically during a bubble and falls back to where it should be during the collapse. The construction industry wastes resources in the bubble and the market corrects during the collapse. With a little over-shooting on the downside – which will correct itself in the absence of intervention – unfettered market forces will locate a new equilibrium, with the home-ownership- home-rental ratio restored to a sustainable balance, and with the construction industry appropriately down-sized.

Surely what is not required following a burst bubble – except for an economist obsessed with increasing the size of an already-bloated state – is to reintroduce the very mechanisms that drove the original bubble. One definition of insanity, after all, is to engage repeatedly in self-destructive activities.  Yet such is exactly what snake-oil salesman, Larry Summers, actively promotes:

“First, and perhaps most fundamentally, credit standards for those seeking to buy homes are too high and too rigorous. Second, as President Obama stressed in rolling out his jobs plan, there is no reason that those who are current on their GSE-guaranteed mortgages should not be able to take advantage of lower rates.  From the perspective of the guarantor, as distinct from the mortgage holder, lower rates are all to the good since they reduce the risk of default.” Lawrence Summers, ibid.

So what is Professor Summers peddling to his Harvard University students and to readers of The Washington Post and The Financial Times?  Well, it surely does not come out of the pages of Adam Smith’s Wealth of Nations

No Income!  Bad Credit! Liar’s Contracts!  Come back, all is forgiven!  Private market in mortgages! Be Gone!  Fannie Mae and Freddie Mac!  Go for it, as you did in throughout the noughties!  Taxpayers? Open up those fat wallets!  Fill up those Fannie and Freddie begging bowls all over again!

John Maynard Keynes left behind some very sorry disciples, of which Larry Summers is one of the sorriest.  As Milton Friedman once said, talking about the  Cambridge England economics faculty during the 1950s, following the death of Keynes:

 ‘One should never judge a Master by the words of his disciples’ 

The same message should be sent out around the corridors of Harvard Square!  Beware ambitious snake oil salesmen, especially in troubled times!

Dominique Strauss-Kahn: a daily diary of moral depravity

October 23, 2011

Another day, another sex scandal for Dominique Strauss-Kahn, the leading poster- boy for socialism in France and the disgraced former managing director of the International Monetary Fund.  This must be what is really  implied by the slogan:  ‘to each according to his need!

Clearly DSK’s needs are only remotely related to his brain. Sensibility rather than sense appears to drive his personal behavior. Of course, much the same might be said about his infamous left-wing  predecessor, Jean-Jacques Rousseau.

A mere 24 hours after narrowly escaping sexual assault charges in France, Dominique Strauss-Kahn has been implicated in an investigation into under-age prostitution in France.  If the investigation holds up on its initial revelations, DSK will be in serious criminal trouble. for, although prostitution is not itself illegal in France, under-age prostitution surely is.

A judicial inquiry into under-age prostitution at the Carlton Hotel in Lille, France was opened in March 2010.  Following a thorough investigation, senior staff from the Carlton Hotel, including the manager, and a public relations executive, were arrested in early October.  They are charged with acting as pimps to their guests, and  with procuring under-age prostitutes for this purpose, as well as with organized conspiracy in criminal acts and money laundering.

Some of the rats are squealing to mitigate their likely sentences.  Evidence suggests that the ring brought in under-aged prostitutes from Belgium to service senior politicians, police officers and lawyers at three hotels in Lille, including the Carlton Hotel. These hotels are now shuttered temporarily until the case is closed.

Jean-Christophe Lagarde, the Lille police chief was detained by police on October 20, 2010 for questioning as part of the investigation. Mr. Lagarde allegedly attended evenings also at a Paris hotel with DSK and with prostitutes supplied by the ring. He also allegedly traveled with such prostitutes to New York and Washington, to service  DSK’s sexual requests during his stint at the IMF.

A number of French newspapers, including French Closure and Le Figaro, as well as London’s Daily Mail, claim to have reviewed ‘Black Book’  documents provided by the Lille examining judges, Ausbart and Vignau, that confirm 100 per cent that DSK was actively involved as a client of this ring..

DSK does not appear to have paid for the sexual services that he appropriated. Two prominent French businessmen – David Roquet of the construction company Eiffage, and Fabrice P. from Lille, financed some of these trysts. Lagarde was widely expected to secure a prominent position in a DSK presidency. For sure the businessmen involved would have expected significant payoffs if DSK had accessed the Elysee Palace.

Once again, the question must be raised how such a morally depraved, corrupt politician as DSK could ever have come close to accessing the Elsyee Palace?  To the credit of French criminal  investigators, it does now seem that plenty of sunshine is being poured into the twilight life-style of DSK.  And nocturnal sleaze rarely fares well in the full light of day.

Limited military intervention and the declining cost of foreign wars?

October 22, 2011

Since the end of World War II successive United States administrations – Democratic and Republican alike –  have meddled extensively in the affairs of sovereign nations, with very mixed outcomes in terms of long-run United States interests. 

Meddling in Korea was costly in terms of men and materiel and ended essentially in a stalemate, at the high cost of alienating Mao Zedong’s China. 

Meddling in Indo-China was yet more costly and ended in a shameful defeat for the United States and a significant loss of international respect for a nation perceived to be incompetent in the exercise of war. Defeat in Vietnam fueled Soviet contempt, leading eventually to the seizure of Afghanistan, and the fueling of major instabilities in the Middle East, as well as in Latin America.

Meddling in  Afghanistan to destabilize Soviet control, was less costly and more successful, in the short-term, but only to open up a failed and abandoned nation to Muslim fundamentalist, Taliban and al qaeda control, with devastating consequences for America on September 11, 2001.

The two Gulf Wars against Iraq proved to be extremely high cost in terms of men and materiel, with still uncertain long-term consequences for the United States, as religious and ethnic conflicts flicker beneath the surface of an anticipated American withdrawal.

The dozens of  U.S. interventions in the Dark Continent, designed to replace one African Big Man with another African  Big Man, seldom worked to the advantage of the United States, still less to the advantage of the indigenous populations.  In a number of instances, Zaire being perhaps the most infamous, the United States placed kleptocrats into authority over largely helpless populations.

So is Libya different? The media yesterday was resplendent with theories that President Obama has discovered a new, low-cost route to foreign meddling using American technology to allow others to destabilize foreign powers without any loss of American lives and at a low cost in terms of a strained federal budget. Does this perceived success now map out a new future for American meddling across the universe of  sovereign nations?

I  doubt that this is so. Libya is a small, backward country, with no navy, no air force and a ragtag army equipped with 1960s fire-arms. Even with a revolutionary army as incompetent as the one that emerged, British and French bombing raids and munition drops supported by U.S. drone attacks, was more than sufficient to topple Gadhafi, who, incidentally, for several years, had been a welcome ally of the United States (and of Britain)  in  suppressing terrorism and in opening up lucrative investment opportunities for U.S. businesses.

Meanwhile, there are some seriously bad guys out there who will not be removed by a Libyan-style intervention. Iran and Paskistan are the most dangerous, closely followed by North Korea.  All three countries potentially threaten WMD attacks on the United States, if they are allowed to roam unconstrained across the international spectrum. Syria also is no Libyan push-over and would have been a budding nuclear power save for  effective bombing raids by the Israeli air force.

The world remains a very dangerous place. Diplomacy has a role to play but – as is apparent – diplomacy does not work with rogue nations. So lest we become overly complacent, let us not equate a victory in Tripoli with the imposition of a new Pax Americana

As SPQR demonstrated  more than two millenia ago, the Pax Romana, was costly both to impose and to maintain.  Even so, it proved to be an excellent long-term investment for a one-time small city state to undertake, offering all of us who now want it the enormous benefits of Western civilization.


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