Archive for March, 2013

Easter Sunday and the peaceful gathering of the faithful

March 31, 2013

As Christians gather on this Easter Sunday to celebrate the rising of their Savior, they do so for the most part without any fear of massacre by alienated sects within their own religion. For much of the history of Christianity, following the Renaissance and Reformation, this was not the case. Protestants in Catholic countries were systematically persecuted. Catholics in Protestant countries suffered similar fates. Over time, the various sects learned to live with each other if not entirely in harmony, then at least in peace.

Throughout the Muslim world such evolution has not occurred. The homicidal hatred between Sunni and Shi’ite continues unabated and any Muslim religious gathering is over-shadowed by the possibility of massacre of the innocents.There appears to be no end to this division between sects that proclaim the divinity of the words of their common Prophet.

Christians should take good heart, this Easter Sunday, from the relative harmony that blesses their religion. Muslims might care to learn from Christianity that a house so badly divided cannot long survive, especially in a world increasingly submitting to the patient virus of secularism.

Autocracies in global ascendancy

March 30, 2013

Although Westerners like to believe that democracy is on a continuously upward trend, this is far from true. Democracy has been in retreat across much of the developing world in recent years. In its latest Index of Freedom in the World, the global monitoring group, Freedom House, notes that 2012 was the seventh consecutive year in which the survey found more declines than gains. For democracy, this is the longest losing streak in the past 60 years.

Democracy in the developing world is struggling in part because citizens in many countries, led to believe that democracy and prosperity always go hand in hand, are finding out that this is not necessarily so. For this reason, trust in democracy has waned in such countries as Malawi and the Philippines. Simultaneously relatively new democracies such as India, Brazil and South Africa, have done little to promote themselves as fruitful political models.

In politics there is no such thing as a vacuum. When democracies falter, the world’s most powerful autocracies fill the vacuum. In particular, China and Russia have become far more assertive on the global stage and increasingly are working together to promote what they view as common interests. Most especially, they are concerned to block democratic developments in their own backyards.

China has provided training over the past decade for police, judges, judicial officials and bureaucrats from a range of countries in Central, South and Southeast Asia. Initially such training focused on economic management. Increasingly they have turned to lessons on how to replicate Chinese-style legal systems, crowd control, Internet monitoring and other strategies of internal repression.

Under President Putin, the Kremlin has taken similar initiatives. In Ukraine, the Kremlin party United Russia, signed an agreement to cooperate with the pro-Russian Ukrainian leader, Vikto Yanukovych, who was unsympathetic to the country’s Orange Revolution of the early 2000s. Kremlin support, including a promise to lower gas prices, helped to secure the presidency for Mr. Yanukovych in 2010. Russia has continued to provide strong support for his repressive government.

Beijing further promotes its model of autocratic development in the nations of Africa and the Middle East as an alternative to the Washington consensus of free markets and free politics. Where China moves, Russia almost always is a fast second.

Western promoters of democracy have no cause for complacency. The autocrats are now on the march into territories once viewed as entirely safe for democracy.

Hat Tip: Joshua Kublantzick, ‘A New Axis of Autocracy’, The Wall Street JournalMarch 30, 2013

U.S. should take out Kim Jong Eun, fat fool of North Korea

March 29, 2013

The fat fool of North Korea, victim of regressive family genes that have left North Korea under the rule of a mental defective, is staggering towards a disastrous attack on mainland America if, that is, his missiles are more effective than his little grey cells. Such a missile launch, especially if chemical or nuclear in nature, would result in the complete annihilation of North Korea as B-2 stealth bombers dropped nuclear payloads across his country.

As a warning that anyone other than an idiot must comprehend, Barack Obama ordered two B-2 stealth bombers to fly from a base in the American heartland and to drop eight dummy bombs – inert versions of 2,000 pound bombs – on a South Korean bombing range. Those bombs, if for real, and targeted on his palace, would give Kim Jong Eun quite a headache, if he woke up at all following the raid.

Of course, when one tries to warn a fool, communication becomes difficult. A muddled mind can understand little beyond the route from plate and glass to mouth as fat hands shovel food and drink down an expanded gullet into an obese belly. The danger is that the fat fool may actually do some harm before he departs the planet.

This situation appears to be a no-brainer for a targeted drone to take out the supreme leader before he leads his entire wretched people into oblivion. Take him out Mr. President. The People’s Republic of China will be eternally in your debt.They know that he is a dangerous piece of trash.

Amanda Knox and the evolution of transnational law

March 28, 2013

Transnational law – law applied by the domestic legal system of one nation against citizens of another nation – is distinct from international law. International law is uniform and is often applied by international bodies such as the International Criminal Court. International law is not generally applicable to domestic crimes committed by individual citizens of one nation against those of another. Transnational law is not uniform, and evolves on a case by case basis.

Amanda Knox is the former American exchange student convicted by an Italian trial court in 2009 of sexually abusing and then of murdering her British room-mate, Meredith Kercher. That conviction was overturned on appeal in 2011 and Ms.Knox returned from an Italian prison to freedom in the United States.

The factors behind the initial conviction included an admission by Ms. Knox that she was present at the crime scene in the Italian town of Perugia, plus her false accusation that a bartender had slit Ms Kercher’s throat. The case against her included a questionable alibi and evidence of her DNA on the alleged murder weapon.

The appeals court threw out the DNA evidence for technical forensic reasons and acquitted Ms. Knox of the murder charge in 2011. On Tuesday March 26, 2013, Italy’s highest court reversed that acquittal, requiring the case to be reheard by a new appeals court, which can either affirm the conviction or order an acquittal. If the conviction is ultimately affirmed, the Italian government can petition the United States to extradite Ms. Knox to Italy to complete serving the 26-year prison term to which she was sentenced in 2009. Ms Knox almost certainly would challenge such an extradition request on the ground that she has already been acquitted by an appellate court, and that any subsequent conviction would constitute double jeopardy.

And that is where transnational law becomes very hazy. Italian and American law differ sharply and yet both will become applicable in such a transnational case. America’s extradition treaty with Italy prohibits the U.S. from extraditing someone who has been ‘acquitted’, which under American law usually means acquitted by a jury at a trial. But Ms. Knox was convicted at trial, by judges not by a jury, and acquitted by an appellate court.. So it awaits legal determination whether her circumstance would constitute double jeopardy under American law. The uncertainty arises because U.S. appellate courts do not retry cases and render acquittals. They judge whether the lower court made mistakes of law, not mistakes concerning the facts.

Under Italian law, an appellate acquittal does not constitute double jeopardy since it is not a final judgment. It is subject to further appeal, which has now resulted in a reversal of the original acquittal. So the Italian government would experience no legal constraint in requesting extradition.

Since possession is nine-tenths of the law, the U.S. government would have the upper hand. But a refusal to extradite would have far-reaching consequences, not least for U.S. criminals residing overseas.

Hat Tip: Alan Dershowitz, ‘Amanda Knox – Tabloid Sensation, Global Legal Bellwether’, The Wall Street Journal, March 28, 2013

Joe Biden: Dominique Strauss-Kahn to the power of 10

March 27, 2013

Dominique Strauss-Kahn was criticized in May 2010 for partying in a swanky New York hotel to the tune of $3,500 per night. At that time, DSK was a presidential candidate in upcoming French elections. He was widely recognized as an insightful economist who had earned a reputation at the IMF for helping to steer Western economies through the 2008 financial crisis.He was expected to win the presidential elections.

In February 2013, Joe Biden, an equally aging Vice President, known primarily for his ability to plagiarize the speeches of others and for a younger second wife who hikes her skirts as she walks in the Inaugural Parade, spent one night at a swanky London hotel, racking up a bill of $485,000 followed by a one night at a swanky Paris hotel, racking up a bill of $585,000. Some night, one might think, some one night stand!

At a time when so many American families are struggling in an economy slowed down by the poor economic management of Obama and Biden, it is disgusting to discover that an aging, second-rate nobody can spend taxpayer monies so extravagantly on one night stands, living it up as though there is no tomorrow.

‘Hey big spender, come spend a little time with me!’

Tell me it ain’t so, Joe

Troy may rise again, this time on Cypriot soil

March 26, 2013

Readers of this column may or not be aware that Cyprus is a partitioned island, one-third of which is ruled by Turks and not by Greeks. The Turks, unlike the Greeks, are not a profligate lazy people. Their Cypriot banks have not been used as laundries for dirty Russian money. Turkish Cyprus is not under the hammer of the euro-zone Troika.

Legend tells us that Troy once was a shining city on a hill, envied by Greeks and Greek-supporters. The seduction and abduction by Paris of Troy of the beautiful Helen of Sparta, daughter of Zeus and Leda and wife of Menelaus, according to Homer’s Iliad, triggered the Trojan War. With some help from the Gods, and of course Achilles, coupled with trickery and deception by the Greek leader, Agamemnon, brother of Menelaus, the barricades of Troy were breached and the city was destroyed. The ill- repute of Greeks as cheats and dissemblers, has been passed down through the millenia even to the present day.

Troy was located on the shores of modern Turkey, according to Greek mythology.Turkey now has its long-awaited opportunity to revenge its people for the Wooden Horse betrayal of its people.

Inquisitive followers of the Greek Cypriot debacle will note a curious adjustment in the predicted outcome of the euro-zone bail-out for the large depositors who now will take the full hit for financial excess. The Cypriot government initially determined that if small depositors were protected against bank failure, large depositors would lose approximately 15 per cent of their holdings. The Greek Cypriots, desperate to protect themselves from Russian Mafia death contracts against their persons, ran to Russia for help. Russia declined to help, at least publicly.

Now, just a few days later, during the extended bank holiday, the Greek Cypriots are predicting that large depositors will take a hit estimated at 40 per cent of their holdings. Just how might this major increase in the hit rate have come to pass?

I offer a potential explanation that sits well with current facts. Suppose that the Greek Cypriot government struck a dirty deal with a dirty Russian government to allow Russian oligarchs to slip out their dirty money deposits from Cypriot banks before the bank holiday came to an end. The remaining large deposits, now significantly depleted in magnitude, would take a much larger hit. In the meantime, a beaming President Putin will close a lucrative deal with the Greek Cypriots that provides $2.5 billion of investment support for the faltering economy.

A few words of Latin warning, however, may have penetrated Putin’s alert ears:

Timeo Danaos et dona ferentes

Troy may well have its vengeful eye on such Greek Cypriot assets – now primarily Russian – that are worth purloining.

Euro-zone night-riders raid two largest Cyprus banks

March 25, 2013

In the middle of the night, the Cypriot government struck a deal to secure its bail-out funding by the IMF and the euro-zone. Essentially, Cyprus jettisoned the Russian oligarchs in order to protect depositors holding less than E100,000 in either of the two banks.

Large depositors at the Bank of Cyprus and at the Laiki Bank – read Russian oligarchs who have laundered dirty money and hidden income from the Russian tax system – will lose some 40 per cent of their total deposits to the euro-zone in return for the deal. Small deposits in Laiki will be transferred to the Bank of Cyprus. The Laiki Bank will be wound down its remaining worthless assets stored in a bad bank.

The Cyprus government will be obliged to introduce harsh fiscal measures designed to move the economy onto a sustainable path. Exchange controls may be imposed for a short period in order to prevent bank runs as depositors move their assets into more secure accounts in Germany, New York or London.

Ultimately, the Cypriot government blinked in its confrontation with euro-zone bail-out negotiators. It should be no surprise that Cyprus has followed Greece as the second bad-boy on the block. The Greeks are an untrustworthy people, that arguably should be ejected from any serious-minded economic and monetary union. Since the Russians are an equally worthless people, few people outside the oligarchy will shed tears for their lost assets.

People flock to where money is plentiful and taxes are low

March 24, 2013

The Census Bureau has just released statistics relating to metropolitan area populations in 2012. The focus in this column is the 51 metro areas with populations in excess of 1 million. Some 55 per cent of all Americans live in these areas, more in the suburbs and exurbs than in the city centers.

Two growth areas stand out – Austin and Raleigh. Twenty five years ago neither of these amounted to a hill of beans in terms of population. Austin had 300,000 and Raleigh 260,000 in 1960. Now metro Austin has 1,834,000 and metro Raleigh has 1,188,000. Even during the lean economic years 2010-2012, Austin’s population grew by 6.9 per cent and Raleigh’s by 5.1 per cent.

Both metro areas are high-tech centers with major universities. Both have vibrant private-sector economies, fostered by relatively low tax rates and light regulation.Texas benefits immensely from a zero rate of income tax (compared with California’s 13.3 per cent)

It is not surprising, therefore, to find that next on the growth list among metro areas are Texas’ three other million-plus areas, Dallas, Houston and San Antonio. Over the period 2010-2012, the population of those three areas grew by 4.3 per cent , or 622,000 people. That represents 12 per cent of the entire nation’s population growth over that time period.

On the other end of the metro area spectrum, lie Rochester, Pittsburgh, Cincinnati, and St. Louis, where taxes tend to be high and regulation tight. None of the metro areas in the Amtrak corridor from Washington to Boston is growing as fast as the nation’s average and some – notably Providence and Hartford – are not growing at all.

There is a clear lesson out there for anyone with the time to think it out.

Hat Tip: Michael Barone, ‘Latest census data show [people flock to where the money is’, Washington Examiner, March 24, 2013

Intended and unintended consequences of regulating sin

March 20, 2013

Since the birth of the modern ‘democratic’ state, social reformers have attempted to use government to control gambling, prostitution, the use of tobacco, alcohol, and other recreational drugs. More recently they have reached out to control the ‘sin’ of poor diet and its ill-consequence of obesity and associated disease.

Not infrequently, the social reformers have joined forces with those who seek to exploit the anti-sin laws – Baptists linking hands with Bootleggers – and have succeeded in forcing through laws of prohibition that predictably fail in their stated intent. The most notorious such example was Prohibition in the United States that fueled fortunes for moonshine suppliers such as Joe Kennedy, and enforcers such as Al Capone.The wealthy, such as FDR and his upper-class cronies, hoarded alcohol in their cellars – it was no crime to drink, but only to engage in the market for alcohol. The ‘speakeasies boomed, entire police systems were corrupted, machine-gun wars erupted between competing enforcers in the major cities, and ultimately sanity was restored and Prohibition repealed.

This column does not engage in the moral debate over regulating sin – though classical liberals are not much inclined to impose their moral preferences upon others – but focuses attention on the detailed care that must be undertaken by those who seek to regulate popular sins, if the consequences of intervention are not to be dire.

Prohibition is by no means the only example of the disastrous consequences – intended by the bootleggers but not by the Baptists – of thoughtless intervention. Britain’s 1736 Gin Act was designed to price the spirit beyond the reach of working people and to eliminate the promise: ‘drunk for a penny, dead-drunk for tuppence’. It failed lamentably, as a black market in gin evaded taxes and drew working class Britons into dark places. Eventually, government awakened to its error, and through more enlightened legislation, encouraged licensed trade through a judicious system of regulation and low taxation.

Similar disaster has followed the ill-conceived War on Drugs by a succession of incompetent U.S. governments. South American drug lords amass personal fortunes, control virtual states, and undermine the authority and effectiveness of legal states. At the level below, we find many U.S business operators who deploy high-quality business acumen to destroy the lives of those in the city ghettos. The victims make up a majority of the U.S. prison population. The ghetto areas are plagued by high murder rates as the business barons enforce contracts that cannot be enforced through the courts.

Countries that appear to have intervened effectively in the markets for sin, without noticably inducing massive crime – Canada, Holland and Scandinavia most conspicuously – do so not by prohibiting sin but by diverting sin into state-regulated outlets. To do so, of course, such governments must be relatively honest and robust, to be ranked low on indexes of corruption. Unfortunately, the United States does not do well on such indices and is not tempted to forgo the corrupt wages of intervening ineffectively against those who engage in popular and most victimless sin.

Hat Tip: John Kay, ‘On the cusp of creating a shadow drinking industry’, Financial Times, March 20, 2013

Cypriot banks launder dirty Russian money

March 19, 2013

Cyprus is the third largest island in the Mediterranian, after Sicily and Sardinia. The Republic of Cyprus is a small nation composed of 800,000 people with an economy of less than $18 billion, representing less than 0.2 per cent of the euro zone’s gross domestic product.

An opaque banking system has evolved, under government influence, with some $70 billion in deposits, much of which emanate from Russia. Indeed, Cyprus has become in essence a client state not just of Russia and a number of the former Soviet satellites, but more specifically of the Russian Mafia. The corrupt financial sector, promoted by a blind-eyed government in the pockets of Russian oligarchs who use Cyprus as a mechanism to cleanse dirty money and evade Russian taxes, accounts for 45 per cent of the entire national economy of Cyprus.

Understandably, in such circumstances, the Cypriot governmentnow finds itself between a rock and a hard place. Its agreement with the euro-zone to impose a 6.7 per cent haircut on small depositors and a 9.9 per cent haircut on large depositors has provoked fury from both groups. The government may fall come election time if the small depositors are hit; and cries about the breaching of the rule of law are justifiably rife across that group. But heads literally may roll if the Russian oligarchs are robbed. So the government wavers between loss of position and loss of life as it gropes around a number of equally unappetising alternatives.

If small depositors are spared completely, then the Russians are out by 15 per cent and all their tax evasion gains go to the euro-zone. If small depositors remain on the hook, then street riots may be expected once the banks reopen, as reopen presumably they eventually must.

Anxious eyes no doubt will be glancing northwards,across the Cyprus partition, where the Turks may decide to enter the south as liberators of their oppressed brothers. A lot of chickens are coming home to roost on this beleaguered island.