The folly that turned a recession into the Depression

September 20th, 2014

We originally posted this a year before the Calamity of 2008, when it seemed impossible that history could repeat itself. Yet history almost repeated when Lehman Brothers was allowed to fail on September 15, 2008 and all hell broke loose. History is hard.

We had the good fortune to meet a man who was present as a child at one of the precipitating events of the Great Depression, the failure of New York’s Bank of United States in December 1930. His grandfather, who lost his savings in that bank, took him to witness the scene as depositors thronged to bank doors that were locked during normal business hours. The panic from bank failures in New York and elsewhere spread around the country — there was no deposit insurance — driving banks to maximize liquidity, sell assets, foreclose loans, and create the Mother of All Credit Crunches, which became known as the Great Depression. Here’s how the NYT described the scene in its December 12, 1930 city edition:

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Perhaps you have been taught that the stock market crash of 1929 caused the Great Depression. That is not so. The crash both reflected and amplified the recession that the US economy was entering in 1929; however, it was the problems of the banking system and of monetary policy that cascaded recession into depression. We will quote from Friedman and Schwartz’s Monetary History of the United States (from pp. 309-313):

The stock market crash…left no mark on currency held by the public. Its direct financial effect was confined to the stock market and did not arouse any distrust of banks by their depositors.

The stock market crash coincided with a stepping up of the rate of economic decline. During the two months from the cyclical peak in August 1929 to the crash, production, wholesale prices, and personal income fell at annual rates of 20%, 7.5%, and 5%, respectively. In the next twelve months, all three series fell at appreciably higher rates…Even if the contraction had come to an end in late 1930 or early 1931, as it might have done in the absence of the monetary collapse that was to ensue, it would have ranked as one of the more severe contractions on record….

In October 1930, the monetary character of the contraction changed dramatically…A crop of bank failures, particularly in Indiana, Illinois, Iowa, Arkansas, and North Carolina, led to widespread attempts to convert demand and time deposits into currency…A contagion of fear spread among depositors…such contagion knows no geographical limits. The failure of 256 banks with $180 million in deposits in November 1930 was followed by the failure of 352 with over $370 million of deposits in December…the most dramatic being the failure on December 11 of the Bank of United States with over $200 million of deposits.

That failure was of especial importance. The Bank of United States was the largest commercial bank, as measured by volume of deposits, ever to have failed up to that time in US history. Moreover, though an ordinary commercial bank, its name had led many at home and abroad to regard it as somehow an official bank, hence its failure constituted more of a blow to confidence than would have been administered by the fall of a bank with a less distinctive name.

In addition it was a member of the Federal Reserve System. The withdrawal of support by the Clearing House banks from the concerted measures sponsored by the Federal Reserve Bank of New York to save the bank — measures of a kind the banking community had often taken in similar circumstances in the past — was a serious blow to the System’s prestige…

Friedman implies that the reason that the Clearing House banks failed to bail out the Bank of the United States, despite often intervening in other, similar cases, is that the BoUS’s customer base and board were Jewish. This contention seems to be supported by statements from the NY State Banking Commissioner of that time, Joseph A. Broderick (p. 310). Let’s take a look at how the New York Times reported the attendees of the meeting the day before the Clearing House pulled the plug on the Bank of United States:

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We have no way of knowing if Milton Friedman’s contention is true or not, though it appears likely to us that, unlike Herbert H. Lehman, the “small, able” Mr. Isidor J. Kresel was probably not a member of Our Crowd. TIME Magazine summed up the banking community’s view of the Bank of the United States in its December 22, 1930 issue on that fateful meeting:

Another late arrival was lanky Owen D. Young who came about 11 p.m. in full dress, accompanied by Thomas William Lamont of J. P. Morgan & Co. Looking taller than usual in his full dress, Mr. Young paused to peer down at and converse with small, able Isidor Kresel, counsel for Bank of United States…Conservative Manhattan bankers last week were angry at Bernard K. Marcus, dark-haired, heavily-built president of Bank of United States. His aim was perhaps much too high. Only last year he stated: “Often we’ve put two or three days work into one. We have gone ahead two or three times as fast as we would have had we been working only one day at a time.” To bankers, a day’s work is a day’s work, to be done well, thoroughly.

The tall and lanky in full dress versus the small, able, dark-haired, overreaching, and heavily-built. We get the picture. Thanks, TIME.

This piece has been quite educational to research. We see once again that great events can turn on small episodes of human weakness, prejudice and folly. And who knew at the time that a crowd gathered at a bank on a cold December day would become anything other than the “local” event that the head of the NY Clearing House opined that it would be?

We should not believe that we can’t make mistakes of similar magnitude or wrongheadedness again. The stagflation of the 1970′s was caused by foolish economics policies of three presidents in a row — Nixon, Ford, and Carter — that weren’t reversed for a decade until Ronald Reagan and Paul Volcker had the wisdom and courage to take the harsh steps required to kill inflation (we know that Carter appointed Alfred Kahn to the CAB and Volcker to the Fed, but the hard work for Volcker was done on Reagan’s watch, with the fed funds rate rising to an unprecedented, unbelievable 20% in mid-1981). Today, one new challenge is the anti-China, pro-protectionism movement increasingly vocal in the US today. The greatest folly can seem trivial or reasonable at the time, which is precisely why it is so dangerous.

Many never left the Dark Ages

September 19th, 2014

We used to worry that the West was losing the Enlightenment. No more. It turns out that the Enlightenment bypassed many who reside in the West. Some are still fighting wars that began in the 7th century. (It is amazing that the establishment still refuses to acknowledge this obvious truth.)

But we’re not simply talking about the barbarians now inside the gate. We’re talking about those who believe in ridiculous superstitions like the alchemy of our time, CAGW. They believe in a magic bean that can destroy the earth, a bean so powerful that one bean among 2500 can do the job. And they believe they are superior for believing this voodoo (here and here, for example).

Thomas Aquinas wrote on alchemy in his time. We wonder what he’d make of it in our time.

Odds and ends

September 18th, 2014

Here’s the Ayaan Hirsi Ali video. Some comments from it are here. Here’s a kerfuffle about letting American fighters for the Islamic State back in the good ol’ USA. Oh, yes, just in case you thought this wasn’t coming to a town or village near you, think again. Of particular note is the response to the Australian police raids. Question: can you think of a cure for all this that can be spoken in polite society today?

Sense and nonsense regarding Ebola

September 17th, 2014

First, nonsense (insanity really) via NYT:

Senior administration officials said Monday night that the Department of Defense would open a joint command operation in Monrovia, Liberia, to coordinate the international effort to combat the disease. The military will also provide engineers to help construct the additional treatment facilities and will send enough people to train up to 500 health care workers a week to deal with the crisis. Officials said the military expected to send as many as 3,000 people to Africa to take charge of responding to the Ebola outbreak.

The American government will also provide 400,000 Ebola home health and treatment kits to Liberia, as well as tens of thousands of kits intended to test whether people have the disease. The Pentagon will provide some logistical equipment for health workers going to West Africa and what administration officials described as “command and control” organizational assistance on how to coordinate the overall relief work. The Army Corps of Engineers is expected to be part of the Defense Department effort. Administration officials did not say how soon the 17 treatment centers would be built in Liberia; officials there, as well as international aid officials, have said that 1,000 beds are needed in Liberia in the next week alone

Now here’s Bloomberg:

Mapp Biopharmaceutical Inc., which has nine employees, released its experimental ZMapp drug, until now only tested on infected animals, for the two health workers…The two scientists behind Mapp, President Larry Zeitlin and Chief Executive Officer Kevin Whaley, “are both brilliant,” said Charles Arntzen, a plant biotechnology expert at Arizona State University who collaborated with the two researchers years ago. “They are very, very bright guys and free spirits”…

Mapp’s drug is being developed with Toronto-based Defyrus Inc., which has six employees, according to Defyrus CEO Jeff Turner. ZMapp is a “cocktail” of monoclonal antibodies that help the immune system attack the virus…Kentucky BioProcessing LLC, a subsidiary of tobacco giant Reynolds American Inc. (RAI), manufactures the treatment for Mapp from tobacco plants…

The tobacco plant production system was developed because it was a method that could produce antibodies rapidly in the event of an emergency, he said. To produce therapeutic proteins inside a tobacco plant, genes for the desired antibodies are fused to genes for a natural tobacco virus, said Arntzen. The tobacco plants are then infected with this new artificial virus, he said. “The infection results in the production of antibodies inside the plant,” Arntzen said. The plant is eventually ground up and the antibody is extracted, he said. The whole process takes a matter of weeks.

We have no idea if ZMapp is the best treatment for ebola, but we know it worked in several cases. We also know that the San Diego and Toronto companies total 15 employees between them. Instead of putting American soldiers in harm’s way for no apparent benefit, wouldn’t it have been a better idea to clone Mapp and its promising rivals in multiple US, European and other medical research centers, and devote massive resources to ramping up production of ZMapp and other drugs with similar laboratory success? This is real and real-time, not silly fantasy like Solyndra.

You had no idea

September 16th, 2014

Um, correct that — we had no idea. CFR:

Shia identity is rooted in victimhood over the killing of Husayn, the Prophet Mohammed’s grandson, in the seventh century, and a long history of marginalization by the Sunni majority. Islam’s dominant sect, which roughly 85 percent of the world’s 1.6 billion Muslims follow, viewed Shia Islam with suspicion, and extremist Sunnis have portrayed Shias as heretics and apostates.

Mohammed unveiled a new faith to the people of Mecca in 610. Known as Islam, or submission to God, the monotheistic religion incorporated some Jewish and Christian traditions and expanded with a set of laws that governed most aspects of life, including political authority. By the time of his death in 632, Mohammed had consolidated power in Arabia. His followers subsequently built an empire that would stretch from Central Asia to Spain less than a century after his death. But a debate over succession split the community, with some arguing that leadership should be awarded to qualified individuals and others insisting that the only legitimate ruler must come through Mohammed’s bloodline.

A group of prominent early followers of Islam elected Abu Bakr, a companion of Mohammed, to be the first caliph, or leader of the Islamic community, over the objections of those who favored Ali ibn Abi Talib, Mohammed’s cousin and son-in-law. The opposing camps in the succession debate eventually evolved into Islam’s two main sects. Shias, a term that stems from shi’atu Ali, Arabic for “partisans of Ali,” believe that Ali and his descendants are part of a divine order. Sunnis, meaning followers of the sunna, or “way” in Arabic, of Mohammed, are opposed to political succession based on Mohammed’s bloodline.

Ali became caliph in 656 and ruled only five years before he was assassinated. The caliphate, which was based in the Arabian Peninsula, passed to the Umayyad dynasty in Damascus and later the Abbasids in Baghdad. Shias rejected the authority of these rulers. In 680, soldiers of the second Umayyad caliph killed Ali’s son, Husayn, and many of his companions in Karbala, located in modern-day Iraq. Karbala became a defining moral story for Shias, and Sunni caliphs worried that the Shia Imams—the descendants of Husayn who were seen as the legitimate leaders of Muslims (Sunnis use the term “imam” for the men who lead prayers in mosques)—would use this massacre to capture public imagination and topple monarchs. This fear resulted in the further persecution and marginalization of Shias.

Even as Sunnis triumphed politically in the Muslim world, Shias continued to look to the Imams—the blood descendants of Ali and Husayn—as their legitimate political and religious leaders. Even within the Shia community, however, there arose differences over the proper line of succession. Mainstream Shias believe there were twelve Imams. Zaydi Shias, found mostly in Yemen, broke off from the majority Shia community at the fifth Imam, and sustained imamate rule in parts of Yemen up to the 1960s. Ismaili Shias, centered in South Asia but with important diaspora communities throughout the world, broke off at the seventh Imam. Ismailis revere the Aga Khan as the living representative of their Imam. The majority of Shias, particularly those in Iran and the eastern Arab world, believe that the twelfth Imam entered a state of occultation, or hiddenness, in 939 and that he will return at the end of time. Since then, “Twelvers,” or Ithna Ashari Shias, have vested religious authority in their senior clerical leaders, called ayatollahs (Arabic for “sign of God”)…

Sunnis dominated the first nine centuries of Islamic rule (excluding the Shia Fatimid dynasty) until the Safavid dynasty was established in Persia in 1501. The Safavids made Shia Islam the state religion, and over the following two centuries they fought with the Ottomans, the seat of the Sunni caliphate. As these empires faded, their battles roughly settled the political borders of modern Iran and Turkey by the seventeenth century, and their legacies resulted in the current demographic distribution of Islam’s sects. Shias comprise a majority in Iran, Iraq, Azerbaijan, and Bahrain, and a plurality in Lebanon, while Sunnis make up the majority of more than forty countries from Morocco to Indonesia.

Iran’s Islamic Revolution in 1979 gave Shia cleric Ayatollah Ruhollah Khomeini the opportunity to implement his vision for an Islamic government ruled by the “guardianship of the jurist” (velayat-e faqih), a controversial concept among Shia scholars that is opposed by Sunnis, who have historically differentiated between political leadership and religious scholarship. Shia ayatollahs have always been the guardians of the faith. Khomeini argued that clerics had to rule to properly perform their function: implementing Islam as God intended, through the mandate of the Shia Imams.

Under Khomeini, Iran began an experiment in Islamic rule. Khomeini tried to inspire further Islamic revival, preaching Muslim unity, but supported groups in Lebanon, Iraq, Afghanistan, Bahrain, and Pakistan that had specific Shia agendas. Sunni Islamists, such as the Muslim Brotherhood and Hamas, admired Khomeini’s success, but did not accept his leadership, underscoring the depth of sectarian suspicions.

Saudi Arabia has a sizable Shia minority of roughly 10 percent, and millions of adherents of a puritanical brand of Sunni Islam known as Wahhabism (an offshoot of the Sunni Hanbali school) that is antagonistic to Shia Islam. The transformation of Iran into an overtly Shia power after the Islamic revolution induced Saudi Arabia to accelerate the propagation of Wahhabism, as both countries revived a centuries-old sectarian rivalry over the true interpretation of Islam. Many of the groups responsible for sectarian violence that has occurred in the region and across the Muslim world since 1979 can be traced to Saudi and Iranian sources.

Wiki:

Sunnis believe that Abu Bakr, the father of Muhammad’s wife Aisha, was Muhammad’s rightful successor and that the method of choosing or electing leaders (Shura) endorsed by the Quran is the consensus of the Ummah (the Muslim community).

Shias believe that Muhammad divinely ordained his cousin and son-in-law Ali (the father of his grandsons Hasan ibn Ali and Hussein ibn Ali) in accordance with the command of God to be the next caliph, making Ali and his direct descendants Muhammad’s successors. Ali was married to Fatimah, Muhammad’s daughter from his wife Khadijah bint Khuwaylid.

Aisha endorsed her father Abu Bakr as the successor to Muhammad. In the Battle of the Camel (656), Aisha opposed her step son-in-law Ali outside the city of Basra because she wanted justice on the perpetrators of the assassination of the previous caliph, Uthman. Aisha’s forces were defeated and Muhammad’s widow was respectfully escorted back to Medina.

Sunnis follow the Rashidun “rightly guided Caliphs”, who were the first four caliphs who ruled after the death of Muhammad: Abu Bakr (632-634), Umar ibn al-Khattab (634-644), Uthman ibn Affan (644-656), and the aforementioned Ali Ibn Abi Talib (656-661).

Shia theology discounts the legitimacy of the first three caliphs and believes that Ali is the second-most divinely inspired man (after Muhammed) and that he and his descendants by Fatimah, the Imams, are the sole legitimate Islamic leaders.

The Imamate of the Shia encompasses far more of a prophetic function than the Caliphate of the Sunnis. Unlike Sunni, Shias believe special spiritual qualities have been granted not only to Muhammad but also to Ali and the other Imams. Twelvers believe the imams are immaculate from sin and human error (ma’sūm), and can understand and interpret the hidden inner meaning of the teachings of Islam. In this way the Imams are trustees (wasi) who bear the light of Muhammad (Nūr Muhammadin).

While Shias and Sunnis differ on the nature of the Mahdi, many members of both groups, especially Sufis, believe that the Mahdi will appear at the end of the world to bring about a perfect and just Islamic society.

In Shia Islam “the Mahdi symbol has developed into a powerful and central religious idea.” Twelvers believe the Mahdi will be Muhammad al-Mahdi, the twelfth Imam returned from the Occultation, where he has been hidden by God since 874. In contrast, mainstream Sunnis believe the Mahdi will be named Muhammad, be a descendant of Muhammad, and will revive the faith, but will not necessarily be connected with the end of the world…

Sunni–Shia…violence persists to this day from Pakistan to Yemen and is a major element of friction throughout the Middle East. Tensions between communities have intensified during power struggles, such as the Bahraini uprising, the Iraq War, and most recently the Syrian Civil War and the formation of the self-styled Islamic State in Iraq and the Levant and its advancement on Syria and Northern Iraq.

Britannica:

The Thirty Years’ War…is conventionally held to have begun in 1618, when the future Holy Roman emperor Ferdinand II, in his role as king of Bohemia, attempted to impose Roman Catholic absolutism on his domains, and the Protestant nobles of both Bohemia and Austria rose up in rebellion. Ferdinand won after a five-year struggle. In 1625 King Christian IV of Denmark saw an opportunity to gain valuable territory in Germany to balance his earlier loss of Baltic provinces to Sweden. Christian’s defeat and the Peace of Lübeck in 1629 finished Denmark as a European power, but Sweden’s Gustav II Adolf, having ended a four-year war with Poland, invaded Germany and won many German princes to his anti-Roman Catholic, anti-imperial cause.

Meanwhile the conflict widened, fueled by political ambitions of the various powers. Poland, having been drawn in as a Baltic power coveted by Sweden, pushed its own ambitions by attacking Russia and establishing a dictatorship in Moscow under Władysław, Poland’s future king. The Russo-Polish Peace of Polyanov in 1634 ended Poland’s claim to the tsarist throne but freed Poland to resume hostilities against its Baltic archenemy, Sweden, which was now deeply embroiled in Germany. Here, in the heartland of Europe, three denominations vied for dominance: Roman Catholicism, Lutheranism, and Calvinism. This resulted in a Gordian tangle of alliances as princes and prelates called in foreign powers to aid them. Overall, the struggle was between the Holy Roman Empire, which was Roman Catholic and Habsburg, and a network of Protestant towns and principalities that relied on the chief anti-Catholic powers of Sweden and the United Netherlands, which had at last thrown off the yoke of Spain after a struggle lasting 80 years. A parallel struggle involved the rivalry of France with the Habsburgs of the empire and with the Habsburgs of Spain, who had been attempting to construct a cordon of anti-French alliances.

The principal battlefield for all these intermittent conflicts was the towns and principalities of Germany, which suffered severely. During the Thirty Years’ War, many of the contending armies were mercenaries, many of whom could not collect their pay. This threw them on the countryside for their supplies, and thus began the “wolf-strategy” that typified this war. The armies of both sides plundered as they marched, leaving cities, towns, villages, and farms ravaged. When the contending powers finally met in the German province of Westphalia to end the bloodshed, the balance of power in Europe had been radically changed. Spain had lost not only the Netherlands but its dominant position in western Europe. France was now the chief Western power. Sweden had control of the Baltic. The United Netherlands was recognized as an independent republic. The member states of the Holy Roman Empire were granted full sovereignty. The ancient notion of a Roman Catholic empire of Europe, headed spiritually by a pope and temporally by an emperor, was permanently abandoned, and the essential structure of modern Europe as a community of sovereign states was established.

Points: (a) were the Catholics the Varsity team and the Protestants the JV team? (b) we included such lengthy passages for a reason: anyone who thinks that a complex theological war that has been going on for over a millenium is going to end anytime soon is a fool; (c) the overwhelming strategic imperative for the US is to produce oil like crazy, both for complete energy independence and to reduce the income and importance of the Gulf states — the CAGW hucksters with their stupid, fraudulent arguments are truly enemies of the American people.

God and Man at Yale

September 15th, 2014

Point:

We write to express our concerns about the speaker that is coming to campus this September 15, 2014. The Buckley Foundation is inviting Ayaan Hirsi Ali to discuss the topic “Clash of Civilizations: Islam and the West.” The level of radical inaccuracy in representing a faith that is part of our community compels all of us, not just Muslims on campus, to act on Yale’s fundamental values of freedom of speech and diversity of thought to express our sentiments. We sympathize with the unfortunate circumstances that Ms. Hirsi Ali faced in her Muslim household as a child and we recognize that such experiences do exist in many countries, including Muslim-majority ones. We condemn such actions and contend that Islam does not promote them…

Ms. Hirsi Ali is being invited to speak as an authority on Islam despite the fact that she does not hold the credentials to do so. In the past, under such authority, she has overlooked the complexity of sociopolitical issues in Muslim-majority countries and has purported that Islam promotes a number of violent and inhumane practices. At her worst, Ms. Hirsi Ali has said that Islam is a “destructive nihilistic cult of death” worshiping a “fire-breathing Allah” that, in all of its forms, needs to be “defeated.” While the Muslim community and its allies cannot but believe that the students of the Buckley program care to “promote intellectual diversity” in a respectful and purposeful manner, we do want to reiterate that we feel highly disrespected by the invitation of this speaker…

The comments Ms. Hirsi Ali has made on Islam have been classified as hate speech and have been considered unprotected libel and slander. She has been condemned for them by national organizations and universities.

Counterpoint:

I love your new free-speech concept! Obviously this woman should have been banned from campus and had her face stomped in; why couldn’t they have just quietly murdered her in Holland along with her fellow discomfort-creators? These people are worse than tweed underwear! They practically live to make undergraduates uncomfortable. But let’s deal with the harsh realities. Your inspired suggestion, having Official Correctors speak right after Ali to remind students of the authorized view of Muslim society, is the most exciting new development in Free Speech since the Inquisition — everyone will be talking about it! You have written, with great restraint, about “how uncomfortable it will be” for your friends if this woman is allowed to speak. Uncomfortable nothing. The genital mutilation of young girls is downright revolting! Who ever authorized this topic in a speech to innocent Yale undergraduates? Next thing you know, people will be saying that some orthodox Muslim societies are the most cruel and benighted on earth and that Western societies are better than they are (better!) merely because they don’t sexually mutilate young girls! Or force them into polygamous marriages, countenance honor killings, treat women as the property of their male relations, and all that. Can’t they give it a rest? You’d think someone was genitally mutilating them.

We all know that Free Speech doesn’t mean that just anyone can stand up and start spouting. Would you let your dog talk for an hour to a Yale student audience? What’s next, inviting Dick Cheney? Careful study of contemporary documents makes it perfectly clear that when the Bill of Rights mentions Free Speech, it is alluding to Freedom of Speech for the Muslim Students Association at Yale. We all know that true free speech means freedom to shut up, especially if you disagree with your betters. And true free thought means freedom to stop thinking as soon as the official truth is announced by the proper Authorities — and freedom to wait patiently until then.

Now take this Ayaan Hirsi Ali. First of all, she’s a black woman, and they’re not quite ready for prime time, know what I mean? And she’s against the systematic abuse of women in Muslim societies. What about people who are for the systematic abuse of women in Muslim societies? Furthermore, she lacks “representative scholarly qualifications.” Want the whole campus flooded with quacks expressing their so-called opinions based on “experience” and “knowledge” instead of academic authority? And she’s Dutch!

Meanwhile: “police in Saudi Arabia have stormed a Christian prayer meeting and arrested its entire congregation, including women and children, and confiscated their bibles.” You have to hand it to the Islamic State for one thing: they’ve discredited the charade of respectability bought by oil money and the foolishness of the faculty lounge and the media; it makes those trying to continue the charade look like idiots. HT: PL

Why didn’t the Barbary Pirates get regular jobs?

September 14th, 2014

Wretchard answers the question. Certain things follow if your nation subscribes to the belief that a 1400 year old book and related documents are all you’ll ever need to get through life. Do we exaggerate? Look at the issue of patents and make up your own mind. Still not persuaded? How’s this for a Top Ten List?

Real and imagined threats

September 13th, 2014

Real:

deadly Ebola outbreak sweeping across three countries in West Africa is likely to last 12 to 18 months more, much longer than anticipated, and could infect hundreds of thousands of people

Real: “I had a choice. I could be an insider or I could be an outsider.” (We heard this on Ralph Nader’s KFPK program today BTW.) Imagined. Today the best and the brightest are neither.

From “spare the rod and spoil the child” to ???

September 12th, 2014

At Portsmouth Priory, the punishment for serious infractions, at least among the Day Grubs, was to be paddled vigorously on the derrière with a wet sneaker in Mr. Acheson’s office. Times change. We have no idea of the seriousness of the Peterson matter, but there was a grand jury involved, not that that is conclusive in any way these days. We also don’t make light of Ray Rice, though we understand that in a scheduled remake of The Shining, Red Rum is set to be replaced by Ray Rice. We understand that social media make the Visible! into the Imperative!, given that humans are overwhelmingly responsive to visual stimuli. But there also seems to be some cognitive dissonance or denial or some such at work when the relatively unimportant is routinely elevated over the truly serious. Maybe it’s time to make mandatory the availability of video records of executions, so that people can better evaluate the moral compasses of those who believe that, for example, changing religious affiliation merits losing your head. Is that appropriate, or should the punishment itself be elevated to the status of a crime?

Deflation here and there

September 11th, 2014

Reuters:

China’s consumer inflation cooled more than expected in August, further evidence that the economy is losing momentum. Weak Chinese data had helped support markets on the bet that authorities would unleash new stimulus measures, but investors are becoming increasingly worried, said Eugen Weinberg, head of commodity research at Commerzbank in Frankfurt. “There’s no commitment yet from China to stimulate the economy in the short term,” he said. “Copper is the leading metal so it’s not surprising to see it coming under massive pressure with this overwhelming pessimism right now in the market.”

Three-month copper on the LME dropped to its weakest since June 20 at $6,770 a tonne before paring losses to close at $6,835 a tonne, down 0.5 percent. Adding to pressure on copper, the global refined copper market was seen flipping into a surplus. “The expectation of a surplus was postponed by a couple of different factors … but we still expect you’re probably going to see that by the end of the year,” analyst James Glenn of National Australia Bank in Melbourne said.

Aluminium was vulnerable to more losses, said Paul Adkins of consultancy AZ China in Beijing. “We feel the aluminium price is a little bit overbought at the moment. And we don’t see enough support from the fundamentals,” he told the Reuters Global Base Metals Forum. “All those restarted (Chinese) smelters are now starting to bring metal to the market and there is still 1 million tonnes of new capacity set to enter the picture through the rest of this year.” Commerzbank’s Weinberg said the metal was a candidate for a short position with a target of $1,900 a tonne by year end.

Deflation and devaluations also observed in language.

plus ça change, plus c’est la même chose

September 10th, 2014

18th century, 19th century, and today of course. The big difference is that in the old days, they told the truth, and today that’s unacceptable among the establishment. As we said the other day, however, things are changing perhaps when the left and right start saying very similar things about the Islamic State, which cleverly chose its name to maximize brand equity (though some people refuse to admit the obvious).

More good news

September 9th, 2014

Foreign Policy:

Disease fighters reckon the contagious potential of an outbreak in terms of its RO, or reproduction number. (RO = 1 means that each infected person is statistically likely to infect one more person, so the epidemic will neither grow, nor shrink in size. RO = 0 signifies that the disease cannot be passed from person to person. Any RO above 1 connotes an expanding epidemic.) Christian Althaus of the University of Bern in Switzerland just released a grim new calculation of the RO for this epidemic that finds that when the outbreak began in Guinea, it was RO = 1.5, so each person infected one and a half other people, for a moderate rate of epidemic growth. But by early July, the RO in Sierra Leone was a hideous 2.53, so the epidemic was more than doubling in size with each round of transmission. Today in Liberia, the virus is spreading so rapidly that no RO has been computed. Back in the spring, however, when matters were conceivably controllable, Liberia’s then-small rural outbreak was 1.59.

HT: BC

When you’re a Jet, you’re a Jet all the way

September 8th, 2014

Today’s important reads are VDH and James Lewis. In many ways, this ISIS jihad is transitioning from being simply a left-right issue. Left wing broadcaster on Pacifica Radio of all things, Ian Masters, had Robert Baer and Robert Pelton on his program yesterday, and their analyses were not all that different from Hanson and Lewis. The West has gone flaky and soft (since 1973′s OPEC oil boycott), many DC insiders have gotten wealth and continued access by choosing to look the other way, and young men who take seriously what they’ve been taught in school are the Jets and Sharks of today, on steroids partly due to social media. Oh yes, Jets and Sharks who aren’t content merely to kill each other, but the entire rest of the world, which they ardently believe has victimized them and failed to recognize their inherent superiority. Hard to be optimistic in any way about this, except that the right and the hard left are coming closer to common cause, which would be fantastic. Added bonus: these hard left leaning folks are not saying the problems are because of poverty and the like, which BOTW noted many years ago. They now acknowledge that the problem is religious beliefs — that indeed is progress.

Thank goodness

September 7th, 2014

Thank goodness it’s not terrorism. Then it would have been really really bad.

Downsize

September 6th, 2014

Radically.

Entirely predictable

September 6th, 2014

Day one: “We’ll be here for Estonia.” Day two: “Russian security forces have seized an officer with Estonia’s state security bureau at gunpoint and taken him into Russia.” HT: BC

Sadly, we’ve become a nation of idiots

September 6th, 2014

A leading contender for president: “Climate change is the most consequential, urgent, sweeping collection of challenges we face.” BTW, she’s hardly the only idiot. Take it away, George.

The magic bean that almost destroyed the earth

September 5th, 2014

WSJ:

When the climate scientist and geologist Bob Carter of James Cook University in Australia wrote an article in 2006 saying that there had been no global warming since 1998 according to the most widely used measure of average global air temperatures, there was an outcry. A year later, when David Whitehouse of the Global Warming Policy Foundation in London made the same point, the environmentalist and journalist Mark Lynas said in the New Statesman that Mr. Whitehouse was “wrong, completely wrong,” and was “deliberately, or otherwise, misleading the public.”

We know now that it was Mr. Lynas who was wrong. Two years before Mr. Whitehouse’s article, climate scientists were already admitting in emails among themselves that there had been no warming since the late 1990s. “The scientific community would come down on me in no uncertain terms if I said the world had cooled from 1998,” wrote Phil Jones of the University of East Anglia in Britain in 2005. He went on: “Okay it has but it is only seven years of data and it isn’t statistically significant.”

If the pause lasted 15 years, they conceded, then it would be so significant that it would invalidate the climate-change models upon which policy was being built. A report from the National Oceanic and Atmospheric Administration (NOAA) written in 2008 made this clear: “The simulations rule out (at the 95% level) zero trends for intervals of 15 yr or more.” Well, the pause has now lasted for 16, 19 or 26 years

We put together 2499 blue beans and one magic red bean; we’ll post a picture one of these days. It was the magic bean that was supposed to kill the earth.

Look, of course there are warming and cooling cycles. Ask MIT’s Lindzen. But what you’ve got to get through your thick skull is that it overwhelmingly offends common sense that one bit of CO2 among 2499 others of nitrogen, oxygen, etc., will somehow imperil the planet should it increase its presence a little. Heck, the magic bean is already magic enough, since without it, there’d be no plants and thus no us. Don’t demand that it work overtime!

It’s getting really weird

September 4th, 2014

Yes, we know, it’s WND, but still…… And Benghazi is back. Then there’s this sad story from a Nigerian daily. Wretchard discusses Ozymandias. Bonus fun: America becomes a country where it takes decades to do something simple, when it used to take mere months. Good luck to us all.

Question

September 3rd, 2014

WSJ:

we will defend our NATO allies, and that means every ally. In this alliance there are no old members or new members, no junior partners or senior partners. They’re just allies, pure and simple, and we will defend the territorial integrity of every single ally…We’ll be here for Estonia. We will be here for Latvia. We will be here for Lithuania. You lost your independence once before. With NATO, you will never lose it again.

Question: does this sort of happy talk, to use the WaPo’s phrase, make it more or less likely that Mr. Putin will take his provocations to a new level?