Archive for January, 2013

An Obama-doctrine that would serve the United States well

January 31, 2013

The first-term foreign policy of Barack Obama and Hillary Clinton was little less than disastrous, viewed entirely from the perspective of the United States.

The U.S. government encouraged revolutions in Libya and Egypt that resulted in the overthrow of leaders then supportive of U.S. interests. In their place, weak Islamic governments have emerged, largely hostile to the United States and supportive of Sharia law.

In Iraq, an indecently speedy withdrawal of U.S. forces has left a weak and pro-Islamist government in place, locked in a disgusting embrace with Iran – a terrorist state. An equally indecent withdrawal from Afghanistan will leave the Taliban well-positioned to regain control over a large swathe of the country, signaling yet another failure of U.S. foreign policy.

Iran has been left unchained to develop nuclear weapons that shortly will create an existential threat to Israel, should the latter nation not degrade those facilities. Syria has been allowed to descend into a vicious civil war with untold consequences for instability throughout the Middle East.

The Obama-doctrine, first term, has been to intervene when there was no U.S. interest in such intervention and to fail to intervene when there was a direct U.S. interest. This has been the politics of disaster.

This is my advice to President Obama for his second term in office: Reverse the first term Obama doctrine. Intervene only when intervention serves direct U.S. interests. And then intervene efficiently, maximizing the policy bang for every buck expended.

A wise Obama doctrine would avoid nation-building as though it were the Black Death. It is extremely costly, largely a waste of time on an unappreciative indigenous population, and totally unsuited to the armed forces. Socialism never works. And using the U.S armed forces as instruments of economic development is equivalent to deploying Marxist-Leninism to develop the USSR, Cuba, and North Korea.

A wise Obama doctrine would intervene to bring down governments hostile to U.S. interests by short sharp interventions, where these can effect results. Use air power to destabilize a hostile government, then withdraw and allow the indigenous populations to rebuild. If they rebuild in a manner hostile to U.S. interests, destabilize again. They will learn their lesson.

A wise Obama doctrine would prop up governments allied to the U.S. by destabilizing any rebel groups. Again, short sharp interventions are the key to successful policy. Human rights abuses should not be condoned. But they do not constitute just cause for U.S. intervention, when such intervention is unambiguously inimical to U.S. economic interests.

Such a doctrine would surely be viewed as selfish. But selfishness is not necessarily a sin. Surely it is less sinful than the international chaos that has resulted from the application of Obama’s first term doctrine.

Egypt on the brink of a military coup-d’etat

January 30, 2013

No where across Arabia has the Arab spring moved more quickly into an Arab winter of discontent than in Egypt. The successful Obama-supported insurrection against President Hosni Mubarak eventually and predictably propelled a corrupt Islamist government into power. This sequence of events has ignited the fury of secular Egyptian liberals who first attracted the support of Obama’s three witches – Hillary Clinton, Susan Rice and Samantha Powers – who in turn provoked President Obama into his ill-fated and singularly ill-thought -out intervention.

Now, following months of political paralysis and widespread rioting across Egypt, Egypt’s U.S. funded military has now threatened to intervene in order to restore ‘order’. Defense Minister Abdel Farrah El Sissi, who is also the commander-in-chief of Egypt’s armed forces, relayed the following message in a speech to military cadets:

“The continuation of the conflict between the different political forces and their differences over how the country should be run could lead to the collapse of the state and threaten future generations.”

The fraught, two-year long transition after three decades of relatively benign, pro-Western, authoritarian rule has frightened off foreign investors and tourists, thus depleting Egypt’s reserves to the point where they now cover only three months of imports. Negotiations with the International Monetary Fund for a $4.8 billion loan almost certainly will be scuttled by President Morsi’s loss of political control and increasingly virulent verbal attacks on Israel. President Obama – still under the influence of his three witches – has refused publicly to condemn Morsi’s increasingly aberrant behavior. The Egyptian cauldron continues to bubble:

“The White House and State Department, rather than criticizing Mr. Morsi, have urged Egypt’s opposition parties to take up his call for a national dialogue to help stem the violence. ‘We have been gratified to see the president and his government renew their call for a national dialogue to avoid further violence,’ State Department spokeswoman, Victoria Nuland, said Monday. ‘We call on all political forces in Egypt to avail themselves of this opportunity.’ This stance is increasingly drawing criticism from Washington’s Arab allies, as well as many Egypt analysts, who believe the U.S. is abetting a larger power grab by Mr. Morsi and his political party, the Muslim Brotherhood.” Matt Bradley, Ed Spindle and Jay Solomon, ‘ ‘Egypt is Warned of ‘Collapse”, The Wall Street Journal, January 30, 2013

Roofs or ceilings?: two Nobel Prize winners offer a lesson to the Federal Reserve

January 29, 2013

In 1945, when millions of Americans returned home after service during World War II, the San Francisco housing market manifested a massive shortage of available housing. The reason for this apparent market dislocation, however, had nothing to do with a failure of market forces. It had everything to do with the socialization of the housing market. The City had imposed a tight ceiling on the rents that could be charged by those who owned the housing stock.

In a 1946 essay, with the catchy title of “Roofs or Ceilings”, two future Nobel Prize winning economists, Milton Friedman and George Stigler exposed the true nature of the problem. If a city desires to secure more roofs over the heads of returning veterans, the best route to do so is to remove the ceiling on rentals. Eventually, San Francisco government saw the light, and the housing shortage immediately disappeared.

Since the 2008 financial crisis, the Federal Reserve has blindly followed the immediate postwar example of the City of San Francisco. It has essentially socialized the market for bank loans by imposing a ceiling on the interest rates that banks can effectively charge when making business loans. As a direct consequence, borrowers desire more loans than in a true market (because interest is too low) and lenders supply fewer loans than in a true market (because interest is too low). The short end of the market always rules. So too few loans are consummated. The economically uneducated (Paul Krugman is a prime example) then rant that the economy is in a liquidity trap.

In reality, the Federal Reserve has chosen ceilings over roofs, thereby imposing severe harm on the economy.It has done so by maintaining a near-zero federal funds rate while ratcheting up its purchases of mortgage-backed and U.S. Treasury securities in order to hold short and long-term rates well below market levels. Effectively the Fed is imposing an interest-rate ceiling on the longer-term market by saying it will keep the short rate unusually low.

There is little economic incentive for lenders to extend credit, especially to risky borrowers, at that rate. The decline in credit availability reduces aggregate demand, which tends to increase the rate of unemployment. This is a classic unintended consequence of such a policy. The policy is a classic form of behavior on the part of Keynesian economists such as Paul Krugman and Ben Bernanke.

Hat Tip: John B. Taylor, ‘Fed Policy is a Drag on the Economy’, The Wall Street Journal, January 29, 2013

Islam’s incompatibility with democracy: lesson of the Arab Spring

January 28, 2013

In December 2010, the self-immolation of a Tunisian street vendor, protesting unjust treatment by the government, ignited a wildfire that became known as the Arab Spring. Now, some two years later, that Arab Spring must be renamed the Arab Winter of Our Discontent, as each and every country torched by that wildfire has collapsed into political chaos blended with religious dictatorship, ruthlessly imposed by Sharia law.

In Tunisia – where it all started – a relatively benign secular autocracy has been replaced by malign Islamic governance. The Islamist Nahda Party captured a 41 per cent plurality of the total vote for the Constituent Assembly in October 2011. Following this capture, the tourist trade has fallen dramatically in that region of North Africa. Similar Islamist victories have followed in Morocco, Libya and beyond.

Military materiel have fallen into the hands of insurgents in Mali, threatening an al qaeda subjugation of the North, that has triggered French armed intervention.Egypt has fallen under Muslim fundamentalist political control, with President Morsi naming Isaelis as the descendants of dogs and pigs. His usurpation of political power is triggering riots and violent demonstrations in Cairo’s Tahrir Square, in Suez, Alexandria and elsewhere. Iraq and Afghanistan are riddled with sectarian violence, instability and corruption. Israel, the only stable democracy in the entire region, is preparing for what may easily end up as a nuclear defense of its country against Islamist barbarians.

The Obama administration should have understood, from the outset of the Arab Spring, that secular dictatorship by declared allies of the United States was the least worst outcome for that benighted region of the globe. Countries populated by under-educated, brain-washed Muslims of varying degrees of fundamentalism are resistant to any kind of democracy. Democracy requires religious freedom. And Islam will not tolerate such a condition. Even in Turkey, it remains difficult to apostasize against Islam, despite the secularization officially imposed upon that country by Mustafa Kemal Ataturk during the 1920′s.

Islam is a religion that does not recognize any separation between Mosque and State. Sharia law rules and democracy cannot legitimately challenge its dictates.

Hat Tip: Thane Rosenbaum, ‘A Bleak Anniversary for the Arab Spring’, The Wall Street Journal, January 28, 2013

Woman do not belong in direct combat

January 27, 2013

Let me commence this column by making it clear that I am no misogynist. From 50 years experience in teaching at university level, I know that, on average,undergraduate women perform far better in the classroom than average undergraduate men, in part because they are more mature, in part because they work harder, and in part perhaps because they may be smarter. At the graduate level, women on average do slightly less well than men, as men mature and as some women become handicapped by child-bearing and unfair responsibility for household chores. But even there, the best women students (Larry Summers notwithstanding) perform as well as the best men. I do not write this column out of prejudice, but simply out of a desire to speak the truth, and not to succumb to the fraud of political correctness.

When it comes to direct combat on the field of battle, however, other qualities than maturity, smarts, and commitment come under consideration. Direct combat is no classroom exercise. And women, on the average, are severely handicapped by nature.

Let me shift the focus away from the exceptional example of a hard-bitten, 30-year old woman cop, low on estrogen and high on testosterone. Instead, let me focus attention on anyone’s 18-year-old estrogen-charged daughter, a much more likely candidate for direct combat in the nation’s infantry.

Now this eighteen year old female may have all the smarts, all the skills, all the patriotism, all the dedication, and more, of any 18-year-old male. But in direct ground combat – and that is where I focus attention – she has three grave physical deficiencies.

The first such deficiency manifests itself in diminished testosterone, the hormone that fuels aggression.In hand-to-hand combat,against a testosterone-driven, Muslim, woman-despising, aggressive man, ignore the estrogen-limitation at your peril. And remember that military rules are designed to to maximize efficiency in killing enemies.

Second, take note of the established fact that the average woman is blessed with only 50 per cent of the upper-body strength of the average male. Whenever the poor bloody infantry is cutting and scything its way through jungle terrain, or moving heavy equipment across mountainous terrain, or is engaged in hand-to-hand combat too close for rifles to be deployed, other than as bayonets, that 18-year-old woman will be a physical drag on efficiency. Julius Caesar, probably the most successful general of all time, would never have relied on women to supplement his famous legions.

The third deficiency is the much higher susceptibility of that 18-year old daughter to sexual abuse and rape, should she fall alive into the hands of the enemy. No more than 5 per cent of 18-year-old male foes have a taste for homosexuality. So captured men are not regularly raped by their captors. Some 95 per cent of male enemies will be trained and eager to abuse captive 18-year old women. The expectation must be that such abuse and rape will be the rule rather than the exception. And those 18-year-old women will know that this is so.

Now it is in the chivalrous culture of Western man to protect women from harm on the battlefield and from potential abuse if captured, especially by men from an inferior culture. This will not be efficient in the midst of direct combat. No doubt the military will train its male infantrymen to steel themselves, to leave their female comrades at especial risk, when it is efficient so to do, and in order to protect their hidden positions, to ignore the screams of their captured female comrades, as they are openly abused in earshot of the battlefield. But is this the kind of society that we wish to cultivate?

Political correctness- and only political correctness – can explain why Secretary of Defense Leon Panetta and General Martin Dempsey, chairman of the Joint Chiefs of Staff, neither of whom has any direct combat experience, have abandoned all rationality and lifted the ban on women in direct combat.

Hat Tip: Kathleen Parker, ‘Women do not belong in combat’, The Washington Post, January 27, 2013

Bum-Square now rules the United States

January 26, 2013

“The principle of distributive justice, once introduced, would not be fulfilled until the whole of society was organized in accordance ith it. This would produce a kind of society which in all essential respects would be the opposite of a free society – a society in which authority decided what the individual was to do and how he was to do it.” F.A. Hayek, The Constitution of Liberty, Routledge & Kegan Paul,1960

“Since it is impossible to maximize with respect to more than one point of view, it is natural, given the ethos of a democratic society, to single out that of the least advantaged and to further their long-term prospects in the best manner consistent with the equal liberties and fair opportunity.It seems that the policies in the justice of which we have the greatest confidence do at least tend in this direction in the sense that this sector of society would be worse off should they be curtailed.” John Rawls, A Theory of Justice, Revised Edition, The Belknap Press, 1999

The first of those two quotations effectively summarized Ronald Reagan’s First Inaugural Address in January 1981. The second effectively summarized Barack Obama’s Second Inaugural Address in January 2013. Ronald Reagan was elected in a landslide vote in 1980. Barack Obama was re-elected by a slim majority in 2012. Nevertheless, a sea change has occurred in the composition and attitudes of the U.S. electorate over that period of 32 years.

To put this shift into perspective, the last presidential candidate prior to Barack Obama’s second-term bid, who chose to run from the left-wing of the Democratic Party was George McGovern in 1972. He lost in a major landslide to Richard Nixon, picking up only 38 per cent of the popular vote. Barack Obama, running on an almost identical left-wing agenda, won with 51 per cent of the popular vote.

In part, this shift in voting patterns is driven by demographics. Immigration policy has tilted for many years against Europeans and in favor of South Americans, systematically biassed against the able and the well-educated in favor of relatively under-qualified new entrants.Second it has been driven by social policies – social security, medicare, medicaid most significantly – designed to make individuals dependent on D.C.. Third, it has been influenced by a media seemingly blind to the old-fashioned American ideals of rugged individualism, desire for freedom from government, and the Protestant work ethic, and seduced by the rhetoric of socialization of all risk. Fourth, it has been aided by the cult of political correctness that insists on never calling a spade a spade when it might conceivably tilt against the Rawlsian concept of the difference principle.

The outcome, on January 21, 2013, is that a newly-elected president of the United States could get away with handing over the White House to bum square. Viewed from that perspective, Obama’s entire address was a calculated insult to the Founding Fathers, delivered only because he knew that the attending press were pattsies for a bum square program of welfare relief and immigration ‘reform’ designed to take the United States on an irreversible road to economic and moral decay.

Mr. President: The United States is becoming a nation of takers

January 25, 2013

“The commitments we make to each other – through Medicare, and Medicaid, and Social Security – these things do not sap our initiative; they strengthen us. They do not make us a nation of takers; they free us to take the risks that make this country great.” Barack Obama, Inaugural Address, January 21, 2013

Unfortunately, the President is incorrect in that observation. Let the numbers tell the true story about the decline and fall of American individualism.

1. Since 1960, entitlement transfers have increased twice as fast as overall personal incomes. Government transfers now account for 18 per cent of all personal income in the United States – up from 6 per cent in 1960.

2. Entitlement benefits currently run at $2.3 trillion annually. This represents an annual burden in excess of $7,400 for every man woman and child in the United States.

3. In 1960, social welfare programs accounted for less than one-third of all federal spending. In 2012, social welfare programs ccounted for two-thirds of all federal spending. In other words, welfare spending is nearly twice as much as all other federal spending, including justice and defense, combined.

4. The United States has experienced a long-term expansion in public reliance on means-tested programs (i.e. programs intended for the poor). In 2012, some 35 per cent of all Americans – well over 100 million people – are accepting money, goods or services from means-tested government programs. This percentage is twice as high as in the early 1980′s. Only one-third of such recipients are seniors on Social Security and Medicare.

5. As entitlement transfers have increased, so has male flight from the workforce. Thew proportion of men 20 and older working or seeking work fell by 13 per cent between 1948 and 2008, before the recession began.

6. More than 7 per cent of men in their late 30′s – the prime working age-group – had completely checked out of the workforce before the 2008 recession began. This percentage is twice that of Greece, the poster-nation for work-place dysfunction. The percentage is higher than that of any Western European economy.

7. The route to this labor market dysfunction is the government disability program.In December 2012, more than 8.8 million working-age men and women received Social Security disability payments from the government – nearly three times as many as in December 1990. There is now one disability recipient for every seventeen workers. The total swells to 12.4 million when all government programs are included. Incidentally, that number exceeds the total number of employees in the manufacturing sector of the economy.

8. In recent years the biggest increases in disability claims have been for musculo-skeletal problems and mental disorders (including mood disorders). It is almost impossible for health practitioners to ascertain conclusively whether or not a claimant is suffering from back pain or sadness.

So, Mr President, had you bothered to check the facts before indulging in communitarian rhetoric, you would have known that the lines in your Inaugural Address cited above were categorically incorrect.

The United States is becoming a nation of takers, Mr. President, not least because you are determined to make once-independent Americans utterly dependent on D.C. And such dependence does not create an environment conducive to risk-taking, save for one powerful exception. Those who truly care about retaining their independence depart for better lands. Pay particular regard to the outward migration of America’s best doctors as the dead-hand of your name-sake – Obamacare – weighs down upon their shoulders.

Atlas will shrug, Mr. President – as you you squeeze the juiciest oranges until their pips finally squeak. In this respect, perhaps you might pick up the White House hotline and ask President Francois Hollande to inform you about recent migratory patterns among wealthy French citizens.

Hat Tip: Nicholas Eberstadt, ‘Yes, Mr. President, We Are a Nation of Takers’, The Wall Street Journal, January 25, 2013

Barack Obama is no Thomas Jefferson and no James Madison

January 24, 2013

In January 2013, three interconnected domestic problems dominate the United States. They are (1) the national debt; (2) the rate of economic growth; and (3) the level of unemployment. These issues must be addressed without impacting adversely on the rate of price inflation. Any president able to nudge the economy in good directions on each of these issues would deserve high ranking in the presidential hall of fame.

Unfortunately, these are not the issues on which President Obama has chosen to focus during his second term, at least from the perspective of his inauguration address.The evidence is as follows:

President Obama’s address was 2,108 words in length. Of these he expended 45 words in three sentences on the economy, 19 words in one sentence on the deficit, and 155 words in six sentences indicating that entitlements would not be cut.

In contrast, Obama expended 160 words in six sentences on climate change, and 358 words in ten sentences on equal pay for women, access to gay marriage, the repeal of laws requiring photo-identification to vote, immigration reform, and gun control.

The remainder of his address demonstrated a fundamental lack of understanding of the 1776 Declaration of Independence. Had he read Thomas Jefferson’s masterpiece with the faintest level of comprehension, he would have understood that the principal concern of the revolutionaries was to protect individual colonists from oppressive government, not to use the coercive power of government to force programs favored by some transient majority upon the people at large. Similarly the Bill of Rights is almost exclusively directed to the same goal, protecting the individual from the state. The only interventionist item in that Bill is to guarantee the individual the right to trial by jury – and that again is a right designed to protect individuals against the state.

So when Obama talks about the need for collective action, as a reinterpretation of the Founders’ vision, in fact he pits himself directly against those Founders’ predilections and great wisdom.

By now all of us have the measure of Barack Obama. And I think that I can fairly state that Barack Obama is no Thomas Jefferson and no James Madison. Thoughtful Americans should compare the words of the Declaration of Independence and the Bill of Rights against those of Obama’s second Inaugural. I have no doubt which they will find the more convincing.

Beyonce lip-synchs the national anthem: harbinger of Obama second term

January 23, 2013

Although none of the United States news media, to my knowledge, have so far reported on this, the London Times indicates that Beyonce chose not to sing the national anthem at the Inauguration but instead lip-synched to a record. Maybe the president should have taken the next step and invited Roseanne Barr openly to insult the national anthem for a second time!

To perpetrate such a fraud on the gathered multitude, many of whom had traveled far to give homage to the President, is surely a national disgrace. The fraud must have been condoned by the White House, and covered up by the national press.

How far will this U.S. media go to close down the open society?

The Second Coming

January 22, 2013

The crowd was smaller, the cheers more muted, the media less adulatory. Nevertheless, many of the true believers gathered for a second occasion on the Mall yesterday,to glimpse their Messiah, even to touch his hand, or to reach out for his robe, in expectation of deliverance from all mortal afflictions, and the promise of eternal paradise. By His words, the Messiah lived up to all their expectations. They will know fours year on, whether those words were true promises or whether they were false rhetoric floating on the frosty midday air, whether indeed this was the true liberal Messiah, or just another in a long legion of false, self-seeking prophets.

‘I am the government, and I am here to command you’ was the message to the gathered multitude. ‘I promise you, my subjects, that I shall deliver ever more government throughout the coming quadrennium. I warn all those skeptical of my authority, or careless of my commands, that I shall not hesitate to dispatch you, as I dispatched Cain before you, to the land of Nod, on the East of Eden.’

Barack Obama’s inaugural address, as I expected, reflected personal hubris intermingled with disdain for the political opponents whom he had decided to bait. His words were not those of a unifying leader of a divided nation, but rather those of a spokesman for a minimum winning coalition of 51 per cent of the electorate. Almost as surely as the sun rises in the east, hubris is followed by nemesis and that vision is outlined in the column that I posted on the day of the Second Coming. Americans of all views must now brace themselves for four bitter years as the vision of the Founding Fathers will be tested again, as it was tested throughout the second disastrous term of FDR – 1937-1940.

“Democratic government has the innate capacity to protect its people against disasters once considered inevitable, to solve problems once considered unsolvable.” FDR Inaugural Address, January 1937

There then followed four years of indiscriminate government intervention and a consequential collapse of market confidence, that extended the Great Depression in the United States years beyond that suffered by any other nation on the planet.


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