Posts Tagged ‘terrorism’
I would be tempted to say that the terrorists have already won. Except that I am not at all convinced we are fighting any terrorist outside the borders of our respective Western countries. It can no longer be disputed today that our respective governments are the terrorists holding society hostage in the tragedy that is inherent in the logical evolution of our unchecked monetary system.
Like in the late 20s and the late 60s the monetary system has yet again reached evident mathematical limits that would bring about the demise of government. Hence the perceived necessity to concentrate power by any means while simultaneously attempting to revive the monetary system by traditional means i.e. trying to re-ignite inflation by creating and spending prodigious amounts of credit and money in any way possible. And of course, inculcating fear of terrorism in people’s heads is just the ticket.
I can understand that most people in their every day lives can find this blog a bit far fetched and somehow a bit out there. Most people have more immediate concerns and are so deeply involved in their daily routines to be able to zoom out of their lives in order to survey the land and get a broader perspective. It’s fine. That’s why we have elected officials. That’s their job. Once officials are aware of a situation, it is their job to then filter the information to the rest of the population. That’s an integral part of the concept of “fiduciary duty”.
So it is today, that our elected officials appear to still hold in very high regard the concept of fiduciary duty as they fret and wring their hands and declare that:
Two Senators favour punishing US officials for security failures in failed Christmas bomb plot
Now, I am going to digress here for a moment. I am going to play devil’s advocate.
You would think that the “goal” of a terrorist organization would be to succeed. If you are to spread terror throughout the land and in foreign lands, your aim would be to carry out successful operations to their logical conclusion which, presumably for a terrorist organization, is to inflict casualties.
In order to carry out operations successfully, you implement strategies that take into account your enemy’s defenses. And, if you have fewer resources at your disposal than your adversary (as terrorists always do because otherwise they would not be such), chances are that busting through the front gate is not necessarily the best way to go about things. That is, why bother trying to get through the most fortified and secured building when you can easily find hundreds of other targets that would inflict a far higher casualty rate and where the chances of success are far higher?
More specifically, why would any terrorist “organization” want to still try to board any airliner from a Western airport?
So, at a time when our governments have variously appropriated public funds against the will of the people, and shoveled said funds to prop up financial institutions willingly protecting bondholders capital thus in one fell swoop rendering hundreds of years of commercial law moot; when our governments have nationalized failed financial institutions that had been clearly failing for well over a decade and, though nationalized, are not being reformed and, instead, are being encouraged to do more of what they have done for the past ten years; when our governments ram down our throats new legislation that dismantles entire swathes of democratic mechanisms in favor of creating a new political layer that is unelected (Lisbon treaty); when our governments have clearly become the single largest actors in the economy with the moral ramifications that entails; when our governments seem to have lost any sense of moral or fiduciary duty and are hell bent on militarism abroad as well as at home; when our governments…
That’s right! We should punish those officials that allowed some hapless simpleton slip through security on one airplane.
That’s really important now isn’t it.
Oh! And since we’re at it, lets also expand the war in Yemen so that flying will finally become safe for our citizens.
NB – This is an article that dates from before 9/11
” […] statistics [on terrorism] are fundamentally meaningless because, as the report points out, “no one definition of terrorism has gained universal acceptance”
“Using the definition preferred by the state department, terrorism is: “Premeditated, politically motivated violence perpetrated against noncombatant* targets by subnational groups or clandestine agents, usually intended to influence an audience.” (The asterisk is important, as we shall see later.)”
“The state department regards attacks against “noncombatant* targets” as terrorism. But follow the asterisk to the small print and you find that “noncombatants” includes both civilians and military personnel who are unarmed or off duty at the time. Several examples are given, such as the 1986 disco bombing in Berlin, which killed two servicemen.
The most lethal bombing in the Middle East last year was the suicide attack on USS Cole in Aden harbour which killed 17 American sailors and injured 39 more.
As the ship was armed and its crew on duty at the time, why is this classified as terrorism? Look again at the small print, which adds: “We also consider as acts of terrorism attacks on military installations or on armed military personnel when a state of military hostilities does not exist at the site, such as bombings against US bases.”
“A similar question arises with Palestinian attacks on quasi-military targets such as Israeli settlements. Many settlers are armed (with weapons supplied by the army) and the settlements themselves – though they contain civilians – might be considered military targets because they are there to consolidate a military occupation.
If, under the state department rules, Palestinian mortar attacks on settlements count as terrorism, it would be reasonable to expect Israeli rocket attacks on Palestinian communities to be treated in the same way – but they are not. In the American definition, terrorism can never be inflicted by a state. (emphasis added)”
“Interestingly, the American definition of terrorism is a reversal of the word’s original meaning, given in the Oxford English Dictionary as “government by intimidation”. Today it usually refers to intimidation of governments“.
“Issuing such a list does at least highlight the anomalies and inconsistencies behind anti-terrorism laws. It also points towards a simpler – and perhaps more honest – definition: terrorism is violence committed by those we disapprove of.”
With much gratitude to “Moonshot” on the Voy board
With unemployment numbers like these, who needs peace?
Does North Korea have nukes? Does Iran? Are we going to fight terrorism in Afghanistan so we don’t have to fight it at home? Is Sudan a hot bed of malicious anti Western terrorists?… Maybe… but that’s all smoke and mirrors.
Here is what you need to know. The West’s industrialized nations are bankrupt. Bankrupt means that we are unable to service our debt; it means that our income is insufficient to pay interest on what we borrowed as individuals, corporations or governments. Bankrupt also means that those government functions society takes for granted (mail delivery, public transport, administrative functions) must be curtailed and/or stopped.
It is not good to be a Western industrialized nation if you are plagued by those undesirable economic and social conditions that are more often associated with dinky African banana republics. It is most unbecoming. Most unbecoming indeed.
Can the West, as self proclaimed holder of the moral high ground, defender of the (Keynesian) faith, lord of the earth and master of the universe declare bankruptcy and, in one fell swoop, admitting that, in fact, we are no more righteous than your garden variety Mugabe?
I think not.
Till such time that someone, somewhere finds a way to get inflation going again, I can guarantee you that our “leaders” are working on starting a war somewhere soon. Soon means in the next few months … before 2015…
And here’s the rub. There is no way on earth anyone can get inflation going again in the face of rising unemployment. No way. And Western politicians will be damned if they will let the great unwashed know what clusterfuck they have wrought.
So war it is.
“Leaders” the world over are throwing toys out of their respective prams: First Gheddafi at the Arab summit; now the leading lights of the (ostensibly) cultured West as the self appointed holders of the moral high ground. This would be funny if it weren’t so sad.
As I outline in Thoughts on Stiglitz, the logic inherent in the use of inflation must by necessity result in an alliance (unholy as it may be) between finance and politics. It couldn’t be any other way because the political process requires politicians to spend ever greater amounts of money. This is so for any political framework be it dictatorial or democratic. The only difference is that in a democratic system, it is the majority of the electorate that eventually ensures that the state spends itself into oblivion. In a dictatorship, it is the minority ruling elite that will spend the state into oblivion on the back of half assed projects (see Dubai).
Anyone with a passing interest in history can draw the parallels and realize what the logical conclusion will be. The only question is the timing of the conclusion as governments can alter the length of the political and economic cycle but not the result.
The crash has laid bare many unpleasant truths about the United States. One of the most alarming, says a former chief economist of the International Monetary Fund, is that the finance industry has effectively captured our government—a state of affairs that more typically describes emerging markets, and is at the center of many emerging-market crises. If the IMF’s staff could speak freely about the U.S., it would tell us what it tells all countries in this situation: recovery will fail unless we break the financial oligarchy that is blocking essential reform. And if we are to prevent a true depression, we’re running out of time.
“No, the real concern of the fund’s senior staff, and the biggest obstacle to recovery, is almost invariably the politics of countries in crisis.
Typically, these countries are in a desperate economic situation for one simple reason—the powerful elites within them overreached in good times and took too many risks. Emerging-market governments and their private-sector allies commonly form a tight-knit—and, most of the time, genteel—oligarchy, running the country rather like a profit-seeking company in which they are the controlling shareholders. When a country like Indonesia or South Korea or Russia grows, so do the ambitions of its captains of industry. As masters of their mini-universe, these people make some investments that clearly benefit the broader economy, but they also start making bigger and riskier bets. They reckon—correctly, in most cases—that their political connections will allow them to push onto the government any substantial problems that arise.”
But inevitably, emerging-market oligarchs get carried away; they waste money and build massive business empires on a mountain of debt. Local banks, sometimes pressured by the government, become too willing to extend credit to the elite and to those who depend on them. Overborrowing always ends badly, whether for an individual, a company, or a country. Sooner or later, credit conditions become tighter and no one will lend you money on anything close to affordable terms.
The downward spiral that follows is remarkably steep. Enormous companies teeter on the brink of default, and the local banks that have lent to them collapse. Yesterday’s “public-private partnerships” are relabeled “crony capitalism.” With credit unavailable, economic paralysis ensues, and conditions just get worse and worse. The government is forced to draw down its foreign-currency reserves to pay for imports, service debt, and cover private losses. But these reserves will eventually run out. If the country cannot right itself before that happens, it will default on its sovereign debt and become an economic pariah. The government, in its race to stop the bleeding, will typically need to wipe out some of the national champions—now hemorrhaging cash—and usually restructure a banking system that’s gone badly out of balance. It will, in other words, need to squeeze at least some of its oligarchs.
Squeezing the oligarchs, though, is seldom the strategy of choice among emerging-market governments. Quite the contrary: at the outset of the crisis, the oligarchs are usually among the first to get extra help from the government, such as preferential access to foreign currency, or maybe a nice tax break, or—here’s a classic Kremlin bailout technique—the assumption of private debt obligations by the government. Under duress, generosity toward old friends takes many innovative forms. Meanwhile, needing to squeeze someone, most emerging-market governments look first to ordinary working folk—at least until the riots grow too large.
Not surprisingly, Wall Street ran with these opportunities. From 1973 to 1985, the financial sector never earned more than 16 percent of domestic corporate profits. In 1986, that figure reached 19 percent. In the 1990s, it oscillated between 21 percent and 30 percent, higher than it had ever been in the postwar period. This decade, it reached 41 percent. Pay rose just as dramatically. From 1948 to 1982, average compensation in the financial sector ranged between 99 percent and 108 percent of the average for all domestic private industries. From 1983, it shot upward, reaching 181 percent in 2007.
Big banks, it seems, have only gained political strength since the crisis began. And this is not surprising. With the financial system so fragile, the damage that a major bank failure could cause—Lehman was small relative to Citigroup or Bank of America—is much greater than it would be during ordinary times. The banks have been exploiting this fear as they wring favorable deals out of Washington.
- Hat tip to Earl on VOY
Hat tip to Doran on VOY.
” Families that two years ago enjoyed wealth in stocks and in their homes now have neither. Their 401(k)s have fallen by half, their mortgages are a burden, and their homes are an albatross. For many the best strategy is to mail the keys to the bank. This practically assures that excess supply and collapsed prices in housing will continue for years. Apart from cash — protected by deposit insurance and now desperately being conserved — the American middle class finds today that its major source of wealth is the implicit value of Social Security and Medicare — illiquid and intangible but real and inalienable in a way that home and equity values are not. And so it will remain, as long as future benefits are not cut.”
“The other problem was price. The only price at which the assets could be disposed of, protecting the taxpayer, was of course the market price. In the collapse of the market for mortgage-backed securities and their associated credit default swaps, this price was too low to save the banks. But any higher price would have amounted to a gift of public funds, justifiable only if there was a good chance that the assets might recover value when “normal” conditions return.”
” Delay is not innocuous. When a bank’s insolvency is ignored, the incentives for normal prudent banking collapse. Management has nothing to lose. It may take big new risks, in volatile markets like commodities, in the hope of salvation before the regulators close in. Or it may loot the institution — nomenklatura privatization, as the Russians would say — through unjustified bonuses, dividends, and options. It will never fully disclose the extent of insolvency on its own.”
“And if banks are recapitalized without changing their management, why should we expect them to change the behavior that caused the insolvency in the first place?”
” The credit flow metaphor implies that people came flocking to the new-car showrooms last November and were turned away because there were no loans to be had. This is not true — what happened was that people stopped coming in. And they stopped coming in because, suddenly, they felt poor.”