Archive for May, 2013

The war on terror is a two-way street, Barack Obama

May 31, 2013

“This war, like all wars, must end. That’s what history advises…” Barack Obama, May 23, 2013

Barack Obama spoke those words as though wishing a war to end makes it end. For better or worse, such a wish becomes true only when the person so wishing concedes total defeat, or claims total victory. With respect to the war on terror, if President Obama were to concede total defeat at this time, he would be rightly impeached and convicted of high treason. If President Obama were to claim total victory at this time, he would be quickly conveyed to a suitable asylum for the insane.

“much as Obama would like to close his eyes, click his heels three times and declare the war on terror over, war is a two-way street. That’s what history advises: Two sides to fight it, two to end it. By surrender (World War II), by armistice (Korea and Vietnam) or when the enemy simply disappears from the field (the Cold War). Obama says enough is enough. He doesn’t want us on a ‘perpetual wartime footing.’ Well, the Cold War lasted 45 years. The war on terror, 12 so far. By Obama’s calculus, we should have declared the Cold War over in 1958 and left Western Europe, our Pacific allies, the entire free world to fend for itself – and consigned Eastern Europe to endless darkness.” Charles Krauthammer, ‘Obama’s Dorothy Doctrine’, The Washington Post, May 31, 2013

“We were defenseless on 9/11 because, despite Osama bin Laden’s open written declaration of war in 1996, we pretended for years that no war against us had even begun. Obama would return us to pre-9/11 defenselessness – casting Islamist terrorism as a law-enforcement issue and removing the legal basis for treating it as an armed conflict – by pretending that the war is over. It’s enough to make you weep.” Charles Krauthammer, ibid.

From carrier pigeons to fiber-optic links

May 30, 2013

Financial markets have moved well beyond Rothschild’s carrier pigeons. The financial centers of New York and Chicago are 700 miles apart. Fiber-optic cables transmit data between them in approximately seven milliseconds. However, that is an eternity in the life of a high-frequency trader. So Spread Networks has invested $300 million building a fiber-optic cable through the Appalachian Mountains. The shorter cable reduces the time taken to transmit data to about one millisecond.

There are limits to this process. The laws of physics suggest that the speed of communication is limited by the speed of light, which takes four milliseconds to travel 700 miles. If such technology had been available, news of Wellington’s victory at Waterloo would have reached London one thousandth of a second after the result was known. A close run thing would then have taken on a quite different meaning.

An interesting question now arises. In the 21st century, Wellington might have been censured for disclosing information about his victory to the banker’s agent before the British government formally disclosed the outcome to the nation. Insider-trading might have been the regulatory accusation. Yet, why should it be unacceptable to gain advantage from knowledge of the outcome of the battle but acceptable to gain advantage by getting that information faster to London?

Currently, making money from better-informed knowledge of business or government – an action that might seem to be in the public interest – is a criminal offence. Making money from marginally faster dissemination of that knowledge – seemingly with minimal or zero public value – is a legitimate market practice:

“That is why we devote more resources to training carrier pigeons and building fibreoptic links than to understanding military and business strategy, more brainpower to devising trading algorithms than to the analysis of competitive advantage. A damn rum thing, Wellington might have said.” John Kay, ‘Enduring lessons from the legend of Rothschild’s carrier pigeons’, Financial Times, May 29, 2013

‘a damn close run thing’

May 29, 2013

In 1815, the combined armies of Britain and Prussia defeated Napoleon’s army at the Battle of Waterloo. The Duke of Wellington is alleged to have said that the outcome of the battle was ‘a damn close run thing’. Surely, for Londoners awaiting the outcome 200 miles away, the unknown, eagerly awaited outcome was far too close for comfort.

Yet, fortunes could be made or lost by being an early recipient of that news. If the French won, British government bonds could be sold before the bond market collapsed. If the Allies won, British government bonds could be purchased before the bond market soared. Legend has it that the House of Rothschild triumphed by arranging to be the first recipient of news of Napoleon’s Waterloo.

The House of Rothschild supposedly arranged for carrier pigeons to fly with news of victory from Waterloo to London. Nathan Rothschild, informed ahead of other traders of Wellington’s great victory, made a killing by buying British government bonds. Rothschild, however, had to operate with great skill to make such a large killing. He knew that other traders were aware of his superior communications network. So the wily financier made sure that he was seen on the floor of the exchange selling British government bonds. Devastated traders, watching his trades, became convinced that the Allies had lost the battle; so they sold bonds in large quantities. Agents of Rothschild purchased those bonds cheaply from the panicked traders, thereby leveraging the magnitude of their gains.

As John Kay notes, in his brilliant column on this issue, Rothschild’s triumph was of little consequence for European civilization, whereas Wellington’s triumph was of enormous consequence:

“The result of Waterloo defined the shape of 19th-century Europe. But the consequences would have been the same whether the result had been known one millisecond or 24 hours after it had occurred. Speed of communication of the news was of little general importance but a potential of large profit. That difference between private and public value gives rise to much socially useless investment…” John Kay, Enduring lessons from the legend of Rothschild’s carrier pigeon’, Financial Times, May 29, 2013

Tomorrow’s column will critically analyze John Kay’s evaluation of the lesson of Rothschild’s carrier pigeon for 21st century financial markets.

The West should allow Syria to self-destruct

May 28, 2013

Syria has long been an irritant to the West. It has worked hard, but ineffectively to destroy Israel and to ferment trouble elsewhere throughout the Middle East. It helped to destabilize Iraq following the removal of saddam Hussein and contributed to many deaths within the coalition of the willing. It has forged a close relationship with Iran, one of the two dangerous enemies of the West (North Korea is the other). It is a significant supporter of al Qaeda.

Syria has no natural resources relevant to the well-being of the West. So the West will lose little or nothing should this artifact of French colonial aspirations self-destruct through an evenly-balanced civil war. If Bashar al-Assad eventually wins, he will rule over a country reduced to desert poverty. If the rebels win and the jihadists seize control, then the West could move to snuff out those who threaten their mainland interests.

Meanwhile, it is immensely in the interest of the West to abstain from all intervention in Syria. Western military concern lies with Iran and North Korea. If the West is to let slip any dogs of war, those are the countries that must be targeted. For those countries – unlike Syria – pose an existential threat to the West.

Hat Tip: Gideon Rachman, ‘Watch what the west does on Syria, not what it says’, Financial Times, May 28, 2013

President Ronald Reagan’s 1981 Memorial Day Proclamation

May 27, 2013

“Over one hundred years ago, Memorial Day was established to commemorate those who died in the defense of our national ideals. Our ideals of freedom, justice, and equal rights for all have been challenged many times since then, and thousands of Americans have given their lives in many parts of the world to secure those same ideals and insure their children a lasting peace. Their sacrifice demands that we, the living, continue to promote the cause of peace and the ideals for which they so valiantly gave of themselves.

Today, the United States stands as a beacon of liberty and democratic strength before the community of nations. We are resolved to stand firm against those who would destroy the freedoms we cherish. We are determined to achieve an enduring peace = a peace with liberty and with honor. This determination, this resolve, is the highest tribute we can pay to the many who have fallen in the service of our Nation.

God bless our veterans and their families.

Peace Through Strength forever.”

Hat Tip: Lou Cordia

Yang Jisheng appreciates the unmitigated evil of Mao Zedong

May 26, 2013

“In the spring of 1959, Yang Jisheng, then an 18-year-old scholarship student at a boarding school in China’s Hubei Province, got an unexpected visit from a childhood friend. ‘Your father is starving to death’!’ the friend told him. ‘Hurry back, and take some rice if you can.’ Granted leave from his school, Mr. Yang rushed to his family farm. ‘The elm tree in front of our house had been reduced to a barkless trunk,’ he recalled, ‘and even its roots had been dug up.’ Entering his home, he found his father ‘half-reclined on his bed, his eyes sunken and lifeless, his face gaunt, the skin creased and flaccid. ‘I was shocked with the realization that the term skin and bonesreferred to something horrible and cruel.’ Mr Yang’s father would die within three days. Yet it would be years before Mr. Yang learned that what happened to his father was not an isolated incident. He was one of 36 million Chinese who succumbed to famine between 1958 and 1962. It would take years more for him to realize that the source of all the suffering was not nature: There were no major droughts or floods in China in the famine years. Rather the cause was one man in particular: Mao Zedong, the Great Helmsman, whose visage still stares down on Beijing’s Tiananmen Square from atop the gates of the Forbidden City.” Bret Stephens, ‘Reading Hayek in Beijing’, The Wall Street Journal, May 25, 2013

This Memorial Day weekend, as we reflect on all those who have given their lives in defense of freedom, let us also remember those disgusting, self-seeking dictators, like Mao Zedong, who stole their own people’s lives through a mixture of gross peasant ignorance and narcissistic egoism. The fact that the People’s Republic of China still allows that degrading image to look down on Tiananmen Square tells us categorically that China has a long way to go before it enters into the community of civilized nations. The day that it does so, the bulldozers will be out to smash the image of Mao Zedong and to bury it forever in the trash-can of history.

Leading US black economist speaks out on behalf of blacks

May 25, 2013

Professor Walter E. Williams of George Mason University arguably is the leading black economist in the United States. He is a man who has made an admirable career out of speaking truth to power. Because truth sometimes requires saying harsh things about the politics of race, Walter Williams tends to shake up the liberal establishment. He does not respond to political questions from the liberal elite in the manner that blacks are supposed to respond to their questions. For many such, Williams is an enigma, or worse, an Uncle Tom.

But be sure of one thing. Walter Williams cares more for the well-being of black Americans than any of this self-seeking liberal elite, be they black or be they non-black. Here are a few recent comments from Walter Williams that should serve as a wake-up call across America:

“Experiencing a violent crime rate of 2.137 per 100,000 of the population, Detroit is the nation’s most dangerous city. Rounding out Forbes magazine’s 2012 list of the 10 most dangerous cities are St. Louis; Oakland, California; Memphis, Tennessee; Birmingham, Alabama; Atlanta, Georgia; Baltimore, Maryland; Stockton, California, Cleveland, Ohio; and Buffalo, New York. The most common characteristics of these predominantly black cities is that for decades, all of them have been run by Democratic and presumably liberal administrations…What’s more is that in most of these cities, blacks have been mayors, chiefs ofd police, school superintendents and principals and have dominated city councils.”

“What I am saying is that if one is strategizing on how to improve the lives of the poorest black people, he wants to leave off his to-do list election of Democrats and black politicians. Also to be left off the to-do list is a civil rights agenda. Racial discrimination has little to do with major problems concerning black people.”

“Today 72 per cent of black babies are born out of wedlock. Being born and finding out that your mother is 17 years old and that your grandmother is 35 and that you don’t know who or where your father is is not a good start to life. In fact, it’s a near guarantee for school dropout, poverty and crime, but such a start in life has nothing to do with racial discrimination.”

“Law-abiding poor black people suffer the nation’s highest rates of criminal victimization from assaults and homicide. More than 50 per cent of homicide victims are black. Would anyone claim that this victimization is caused by racist groups preying on the black community?”

“Black education is a disaster, but who runs the violent, disruptive big-city schools, where education is all but impossible? For the most part, it’s not white people. Go to a city such as Detroit and you’ll find that blacks have been superintendents, principals and most of the teachers for years. Most black high-school students in Detroit and other cities can’t read, write and compute as well as sixth-, seventh- and eigth-grade white students, but is it because of racism?”

“Black people could benefit from an honest examination of the bill of goods they’ve been sold. Such an examination would not come from black politicians, civil rights leaders or the black and white liberal elite. Those people have benefited politically and financially from keeping black Americans in a constant state of grievance based on alleged racial discrimination. The long-term solution for the problems that many black Americans face begins only with an absolute rejection of the self-serving agenda of hustlers and poverty pimps”

Now you will understand why left-wing news anchors such as Sam Donaldson, Dan Rather and Tom Brokaw flushed into embarrassed silence when Walter Williams responded to their television questions. You may also understand why President Barack Obama does not speak such truths to the American people. After all, Barack Obama is the very power to which he would be speaking such truth. And that just ain’t going to happen, given the sources of his campaign funding and career success.

Hat Tip: Walter Williams, ‘Honest Examination of Race’, May 23, 2013

Lois Lerner, IRS division head, pleads the Fifth Amendment

May 23, 2013

President Obama’s key IRS lackey, Lois Lerner, heads the IRS division accused of targeting conservative groups and individuals in the run-up to the 2012 presidential elections. Yesterday she was required to attend a hearing of the House Oversight & Government Reform Committee. She did so reluctantly, looking and outfitted like any senior bureaucrat in Stalin’s USSR. Her demeanor and stance left little doubt about which party she votes for in any national election.

‘I have not done anything wrong’, Ms. Lerner told the committee, in an opening statement. Nevertheless, she declined to answer questions under oath, invoking her Fifth Amendment right against self-incrimination.She stated that she would not testify because lawmakers had accused her of making false statements to Congress about IRS targeting of conservative groups. This statement alone – which arguably constituted a waiver of her Fifth Amendment right – may constitute grounds for recalling Ms. Lerner and requiring her to testify before the Committee at a later date.

Although pleading the Fifth is not itself conclusive evidence of misbehavior, it is widely regarded as such. It is commonplace in criminal trials involving Mafia dons and other low-lives who mingle criminal with non-criminal behavior. Increasingly, the Imperial Presidency is morphing into the Cosa Nostra as it engages in threatening behavior right on the edges of the law. Middle range enforcers such as Lois Lerner are usually the first to fall before the FBI reaches upwards to those right at the top of the pyramid.

Like Cosa Nostra, the White House has developed a convenient strategy for evading ultimate responsibility for such behavior:

“President Obama’s former senior adviser, David Axelrod, told MSNBC recently that his guy was off the hook on the IRS scandal because ‘part of being President is there is so much beneath you that you can’t know because the government is so vast.” ‘The Unaccountable Executive’, The Wall Street Journal, May 23,2013

President Nixon once used the same defense. However, once all the president’s men collapsed like dominoes, as the investigstion advanced, Tricky Dick finally decided to take the fall and boarded Air Force One for one last time, heading out to San Clemente while relying on phlebitis and President Ford to protecty him from further probes.

President Obama may find himself in the same predicament, as his second term stumbles on, unless he chooses to admit wrong-doing and stops playing around on the outer edges of the law.

Tunisia: another Arab Spring turns into a Winter of Discontent

May 22, 2013

Since the 2011 revolution, Tunisia has been consumed by a struggle between liberals and the moderate majority Nahda Islamist party as the country moves to finalize a new constitution and prepare for elections. But, as in other Arab states in transition, dealing with the more radical Islamists, the puritanical Salafis, poses the biggest challenge to any form of democracy.

Tunisia’s secularists view a strict, austere Islam as alien to the country’s relatively open and moderate culture, as well as devastating towards the wealth-creating tourist industry. But the Salafis deploy much-needed social welfare programs to attract young Tunisians for whom Nahda is insufficiently Islamist and insufficiently successful in terms of job-creation.

Tunisia has become a fertile environment for radical fundamentalism. Weapons from the poorly-handled revolution in Libya have found their way to Tunisia and jihadi fighters have holed up in a region on the border with Algeria. Moreover, the civil war in Syria has attracted recruits from north Africa, including many Tunisians. Hardened jihadists eventually return to their homeland and turn their guns onto their own governments. Tunisia could easily become yet another welcoming watering hole for al-qaeda terrorists.

All this was entirely predictable when the Arab Spring began. Foolish Western governments that ignored trusted allies and fostered revolutions that brought them down, will suffer long-term for such short-sighted betrayals.

Hat Tip: ‘War within Islam’, Financial Times, May 22, 2013

Obama ignores nuclear threat from North Korea

May 21, 2013

Since 2006, North Korea has conducted at least three apparently successful nuclear tests. It has also orbited a satellite. Together, these events fulfill the basic technological requirements for an intercontinental ballistic missile that can deliver a nuclear warhead against mainland United States.

Miniaturizing a warhead to fit on a missile is not an overwhelming technical obstacle. North Korea requires only one ICBM capable of delivering a single nuclear warhead in order to pose an existential threat to the United States.The Electromagnetic Pulse Commission, the Congressional Strategic Posture Commission, together with several other U.S. studies have established that detonating a nuclear weapon high above any part of the U.S. mainland would generate a catastrophic electro-magnetic pulse.

Sucn an EMP attack would collapse the electric grid and other infrastructure that depends upon it. 300 million Americans would be placed in immediate and serious life-threatening jeopardy. An EMP attack would plunge the U.S. electricity-powered civilization into a black-out potentially lasting for several years. The U.S. currently has no missile defense assets devoted to stopping a missile coming from the south. All such assets currently are positioned to intercept a missile strike in the middle or late part of its trajectory coming from the north polar region. The Obama administration indeed has cancelled the only two U.S. boost-phase or space-based defensive systems.

Wake up President Obama while sufficiwnt electricity remains for you to smell the coffee.A surgical strike to prevent North Korean development of an ICBM has never been more urgent.

Hat Tip: R.James Woolsey and Peter Vincent fry, ‘How North Korea Could Cripple the U.S.’, The Wall Street Journal, May 21, 2013