Sunday Reads: Merry Christmas Edition (25 Dec 2016)

A Merry Christmas to one and all. Take this time to reflect, recharge the batteries, eat good food, watch the gridiron, prepare for Boxing Day cricket and football, and be merry. Then prepare to bunker down and do it again for 2017:

  1. Vox Day with some nice words about the greater meaning of Christmas in humanity.
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  3. Stefan Molyneux hosted a 5 hour interview marathon with several people who had a massive 2016. Includes the likes of Paul Joseph Watson, Vox Day, Bill Mitchell, Mike Cernovich, and much more.
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  5. Mark Zuckerberg’s sister, Donna, attempted to destroy Quintus Curtius and other ‘manosphere’ writers for taking an interest in the Classics. Her main beef is with the fact that the Classics don’t conform to modern day SJW though, so she is taking those who wish to draw the correct messaging from them, as opposed to the SJW-sanitized version, to task. Quintus made her pay for disturbing a resting lion who was minding his own business here, and on Roosh’s Kingmaker podcast here.
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  7. More from Quintus, this time articulating through the story of a World War I officer how to achieve a sense of security through action.
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  9. The history of Boxing Day
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  11. Vintage: Christmas in the 1920s
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  13. An old classic, A Child’s Christmas in Wales by Dylan Thomas. The reading by Thomas himself (here), and the written version (here)
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  15. Finally, Winston Churchill’s 1941 Christmas message from America, given just a few week after Pearl Harbor: 

    Let the children play and have their night of fun and laughter.  Let the gifts of Father Christmas delight their play.  Let us grown-ups share to the full their unstinted pleasures before we turn again to the stern task and the formidable years that lie before us, resolved that, by our sacrifice and daring, these same children shall not be robbed of their inheritance or denied their right to live in a free and decent world. 

    And so, in God’s mercy, a happy Christmas to you all.

On the Forces Behind Neo-McCarthyism

One of the most memorable moments from the 2012 election was when President Obama dismissed Mitt Romney’s claim that Russia was the most dangerous threat to America. “The 1980s are calling, and they want their foreign policy back,” he famously quipped during one of the debates.

Obama has been repeatedly roasted for that in recent weeks, given the fact that four years later, with the Democrats losing ground in Congress, and the White House, and possibly more losses ahead, the Russians are suddenly the scourge of the earth. They have been blamed for costing Hillary Clinton the election, by alleging that it was Russian hackers who provided Wikileaks with the information it would then leak in driblets during the last few months of the campaign.

The Russians have also been blamed by those on the left for the new epidemic of ‘fake news,’ which is more aptly described as ‘news and opinion that disagrees with the leftist narrative.’

These charges represent the latest in the offensive against Russia and President Vladamir Putin by the left. Combined with the hatred of Russia from some on the right, and you get a sort of ‘neo-McCarthyism’ in which Russia is the bad guy and thus anyone with the slightest of positive things to say about Russia is possible traitor. Stephen Cohen, professor of Russian Studies at NYU and Princeton, and one of the only mainstream voices preaching common sense, discussed some of this with John Batchelor in a recent podcast. The following is how his description of how institutionalized this ideological stance now is:

Cohen also points out that today’s neo-McCarthyism, unlike its predecessor, is coming mainly from self-professed liberals and their leading media outlets, including The Washington Post, The New York Times, and MSNBC, which thereby betray a fundamental democratic principle—protecting, even encouraging, free speech in the form of minority opinions. Democratic Senator Harry Reid, for example, following in McCarthy’s footsteps, insisted that the FBI investigate two of Trump’s American supporters for their alleged “Kremlin ties.” Cohen adds that this is very much an elite project and apparently did Clinton no electoral good. He thinks that a strong editorial in an elite, opinion-shaping newspaper such as the Times, Post, or Wall Street Journal might end the new McCarthyism, but they remain silent, even complicit, while largely banning dissenting opinions about the origins and nature of the new Cold War and featuring only those who blame only “Putin’s Russia.”

For those on the left, the opposition to Putin/Russia is mostly based in the culture war. Consider this quote from Putin, given in a 2013 keynote address:

We can see how many of the Euro-Atlantic countries are actually rejecting their roots, including the Christian values that constitute the basis of Western civilisation. They are denying moral principles and all traditional identities: national, cultural, religious and even sexual. They are implementing policies that equate large families with same-sex partnerships, belief in God with the belief in Satan.

The excesses of political correctness have reached the point where people are seriously talking about registering political parties whose aim is to promote paedophilia. People in many European countries are embarrassed or afraid to talk about their religious affiliations. Holidays are abolished or even called something different; their essence is hidden away, as is their moral foundation. And people are aggressively trying to export this model all over the world. I am convinced that this opens a direct path to degradation and primitivism, resulting in a profound demographic and moral crisis.

This is the mindset with which Putin governs Russia. It is an increasingly Christian nation, particularly in comparison to the atheism of communist USSR (which was adored by the left). The Russian Orthodox Church plays a large role in society, and in government, although Russia is officially a secular nation.

Putin is also staunchly anti-abortion, and under his Presidency pro-life forces have risen to prominence. There call to ban abortion has grown louder and louder. Beyond this, there has been a bit of a Putin baby boom, with Russia having a rising fertility rate as opposed to the declining rates seen in much of the West. This runs counter to leftists promotion of postponement of childbearing for women and mindless hedonism, the result of which are birth rates which are now below the rate of replacement in most of the West.

Putin also dislikes the normalization of homosexuality. If you want to organize a Pride Parade in Moscow, you’ll find very little support among the population. Much was made of legislation banning ‘homosexual propaganda’ and huge penalties for exposing children to such propaganda. Indeed, this was behind the denigration of the Sochi Olympic Games by the old media.

In short, not only does Putin oppose the leftist model of culture, he calls such a trend a direct path to degradation. Just as Putin recognizes and fears the spread of this model, the left fears and hates the likes of Putin, because the increase of his, and Russia’s global standing means an increase in the standing of traditional views.

For those on the right, the beef with Russia stems more from Russia being in the way when it comes to Neoconservatives and their Perpetual War Machine, in the advancement of globalism. With respect to Putin, one of the earlier shots across the bow came at the 2007 Munich Security Conference (video below). Putin addressed several world leaders, including warhawk Senators John McCain and Joe Lieberman, telling them in no uncertain terms that what he saw as an attempt by the United States to create a ‘unipolar world’ in which it was the leader in all aspects of culture, economics and security was creating a far more unstable world.

To the likes of McCain and Lieberman, Putin’s comments might as well have been a declaration of war. You could see the unease they felt as Putin spoke. Fast forward to today, and you can see the continuation of the clash of viewpoints in the Syrian debacle. The United States, continuing its aim to remove all secular dictators from the Middle East set its sights on Syria at the beginning of the decade. The Russians, having seen the mess that was made in Iraq, Afghanistan, Libya, and Egypt, decided they didn’t want the same to happen in Syria, an ally and geographically closer than the rest.

This was the landscape which has led to the Syrian civil war, a proxy war with the opposing sides backed by the Russians and Americans. The neocon cohort, led by McCain has been pounding the table for the establishment of a no fly zone over Syria, an action which top generals repeatedly have said would be tantamount to war with Russia. According to the neocons, humanitarian violations were, and continue to be the justification for that increased war effort.

On US television, Putin is regularly referred to as a murderous thug and painted as one of the ultimate villains of World History, up there with the likes of Hitler or Stalin. As Cohen pointed out in his interview, the anti-Russian climate in America is buoyed by the idea that Putin is some sort of war criminal, such that military opposition is justified. Furthermore, to speak positively of Putin in any manner is an outrage.

With both the left and neocon right standing in opposition to Putin/Russia, much of the current political discourse becomes clearer. The old media went to great lengths in blasting Trump during the election for being ‘cozy,’ or ‘friendly’ with Russia, and for his stated aim to get along with the Russians (the horror!). Cohen, now speaking to Democracy Now, articulates this point:

We’re in the most dangerous confrontation with Russia since the Cuban missile crisis. It needs to be discussed. And at the moment, it can’t be discussed because of these charges that everybody is a client of Putin who disagrees with the mainstream opinion. And it’s coming from the Senate. It’s coming from The New York Times. It’s coming from—and I wish we had a second to say what the motives are. But one motive is to keep Trump from going to the White House. Another is to delegitimize him before he gets there. But the main motive—and you can hear it clearly—is Trump has said he wants cooperation with Russia, and the war party here that’s against that is determined to stop it. And the way you do it is level against Putin the kinds of accusations that Mr. Roth uncritically levels, so the rest of us will say we can’t have any cooperations with Putin because he’s a war criminal.

On one hand, you have the neocon warmongers, and on the other the social justice left. And both are singing the same anti-Russian tune. Hillary Clinton was the physical embodiment of this, given she ran her campaign with a severe focus on those leftist issues, while at the same time embracing the neocons on the Russian question. She openly supported the no fly zone, and thus war with Russia.

The American people, in electing Trump, voted against all of that, and Putin understands that. Speaking yesterday, in his end of year press conference, he noted the existence of a substantial part of the electorate which shares sympathies with his line of thinking:

It seems to me there is a gap between the elite’s vision of what is good and bad and that of what in earlier times we would have called the broad popular masses. I do not take support for the Russian President among a large part of Republican voters as support for me personally, but rather see it in this case as an indication that a substantial part of the American people share similar views with us on the world’s organisation, what we ought to be doing, and the common threats and challenges we are facing. It is good that there are people who sympathise with our views on traditional values because this forms a good foundation on which to build relations between two such powerful countries as Russia and the United States, build them on the basis of our peoples’ mutual sympathy.

This is a rather powerful comment. It is a simultaneous dig at both the neocon right (similar views on the world’s organization), and the cultural Marxist left (traditional values being the foundation for positive Russian-American relations).

That both Putin and Trump, two of the most powerful men in the world, are standing on the same side of the issue (that is both men represent nationalism and traditional values over globalism and cultural decay) is potentially an important development in world history. It represents a roadblock against the largely destructive movements of the last 50 years, one which for the first time in my lifetime poses a formidable riposte to those entrenched factions. How it all plays out remains to be seen, but what is certain is that 2017 and beyond will see a lot of history-changing conflict.

Conventional Economic Thinking, Getting It Wrong

Yesterday I mentioned Paul Krugman, a NYT opinion columnist, and the tantrum he was in the midst of throwing over the result of the election. Despite his regular columns on politics, his day job is as an economist, a Nobel-winning one at that. This fact doesn’t render his views any more right, given the fact that economics is essentially a branch of Philosophy rather than a branch of the Hard Sciences.

Krugman took time out of his of his anti-Trump meltdown to post this tweet, in which me mocked ‘creative desctruction.’

(Tweet: “So creative destruction is mostly BS. Kind of suspected that  “)

Krugman has long held an antipathy to the idea of creative destruction, in particular when applied generally to an economy in the mold of Joseph Schumpeter. Consider this post he wrote a couple years ago:

The same impulse, I think, is why Schumpeter gets cited so much. If you read his stuff directly, it’s interesting, I guess, although his attempts to explain the business cycle were a waste of good paper. But it’s that glamorizing phrase “creative destruction” that did it, because it’s so flattering to the big money (and excuses a lot of suffering, too).

[…]

So here’s a revolutionary thought: maybe we need to do less disruption and put more effort into doing whatever we do well.

The post in question, as well as the recent tweet was in reference to the idea of creative destruction on a micro level in the sense of business innovation. The abstract of the paper in the tweet reads as follows:

Entrants and incumbents can create new products and displace the products of competitors. Incumbents can also improve their existing products. How much of aggregate productivity growth occurs through each of these channels? Using data from the U.S. Longitudinal Business Database on all non-farm private businesses from 1976–1986 and 2003–2013, we arrive at three main conclusions: First, most growth appears to come from incumbents. We infer this from the modest employment share of entering firms (defined as those less than 5 years old). Second, most growth seems to occur through improvements of existing varieties rather than creation of brand new varieties. Third, own-product improvements by incumbents appear to be more important than creative destruction. We infer this because the distribution of job creation and destruction has thinner tails than implied by a model with a dominant role for creative destruction.

These conclusions are, in truth, straightforward. Following on Peter Thiel’s concept of ‘zero to one,’ it is much harder to create an entirely new product, concept or entire industry from scratch as opposed to improving an existing product, concept or industry. However, the true advances in humanity come from these ‘zero to one’ moments. Going from horse and carriage to automobile was a far more substantive and ‘ball advancing’ move than the improvement of the automobile which has taken place since.

Applied to the individual businesses, there is more ‘growth’ from the likes of Proctor and Gamble, Ford and GE than there are from the likes of Google simply because there are simply fewer Googles.

Krugman uses this to poo-pooh the idea of creative destruction generally. His fight is with the like of people such as myself, who argue that when economies as a whole enter into recession, the best thing for that economy would be for those stricken businesses to be allowed to fold, that bad debt to be liquidated, and prices find their appropriate level, in line with the incomes and economic reality.

This is where the disdain for the ‘glorification’ of creative destruction comes from, because when applied to an economy as a whole, the aforementioned recessionary symptoms lead to falling employment and lower prices in the short term. This is, of course a painful thing, and Krugman, with his pro-government  leanings, believes that the government can solve these problems by easing monetary conditions and spending money to prop up the failed businesses and restoring debt. When Krugman writes about sticking to doing ‘whatever we do well,’ he means ‘whatever economic paradigm was prevailing before the recession,’ when applied to economies as a whole.

The problem with his, and indeed the standard Keynesian approach to the world, is that existing paradigms may not be lasting. They may fail under changing conditions and thus must adapt to stay relevant to the new economic reality. As such printing trillions of dollars to revive a failing economic model founded on debt fueled spending collateralized by ever rising asset prices is a recipe for failure, in the long run. Creative destruction is thus far from being ‘BS’ but in fact the only way for economies as a whole to be structured appropriately, so as to be in line with the underlying economic realities of the time.

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Elsewhere in Ivy League Economics PhD News, Alan Kreuger, also of Princeton, and Lawrence Katz of Harvard recently released a study which showed that 95% of the jobs created in the Obama ‘recovery’ were part time or contractor work. This is hardly surprising to most who understood the problem with the idea that reflating asset bubbles was not a strategy for success.

The prior bubble popped because prices were sent out of wack. Businesses could not recoup the ever higher costs of production with ever higher prices for the final goods. The lack of demand at higher prices meant that prices could only fall, and with them wages, the price of labor.

Keynesian economists such as Krugman, Krueger and Katz, have no tolerance for such vagaries of the market, and seek to prop prices. In doing so, they propped the higher costs of production which meant they were forced to cut costs elsewhere. This meant workers were either laid off, replaced with robots, or had their hours reduced, or some combination of the three.

This thrust the worker into an environment in which his or her hours were cut while the prices he or she had to pay for goods and services rose. This meant that the worker had to supplement the now part-time or no-time work he or she was doing with a second or third part-time job, or becoming a contractor.

Obamacare crystallized this phenomenon, with its mandates on employers, especially service sector employers, leading to many of them reducing the hours of their staff to avoid the mandatory health care expenditures, hiring more part time workers to fill in the gaps.

This was how Obama’s ‘stellar’ job creation statistics were constructed. The most telling part of the article is the following [emphasis mine]:

Krueger, a former chairman of the White House Council of Economic Advisers, was surprised by the finding.

The disappearance of conventional full-time work, 9 a.m. to 5 p.m. work, has hit every demographic. “Workers seeking full-time, steady work have lost,” said Krueger.

Under Obama, 1 million fewer workers, overall, are working than before the beginning of the Great Recession.

That the likes of Krueger, a Keynesian through and through, would be surprised is of no surprise to me. The Keynesian understanding of the economic world has shown to be bankrupt in the long run. That it is survives as a respected school of thought is down to its ‘success’ in the short run, on a superficial basis. The fact that the Obama administration created millions of jobs, tripled the stock market and has engineered housing prices back to near pre-crisis levels is seeming evidence of the fact that these Keynesian polices have succeeded.

But as this paper notes, this was a papering over the cracks. Despite the touts of the administration, the people know that the economic recovery hasn’t been as great as it seemed, as they see it every day. They are the ones who have to go out in search of multiple part time jobs to make up the hours that were lost elsewhere. They are the ones who are paying higher and higher costs for the same standard of living.

To do this and to be continually told that the economy is improving was a slap in the face which proved one too many for the average voter, which ultimately goes some distance to explain why Trump had such a stern base of support.

Furthermore, this explains why the old media outlets who crow endlessly about how unqualified Trump’s picks are for his cabinet. Krugman, Katz and Kreuger have a combined 100 plus years of economic experience, yet for all their ‘wisdom,’ their understanding of the economy is wholly inadequate.

Chronicles in Old Media Delusion

Jim Rutenberg of the New York Times thinks he has found the solution to the pandemic of ‘fake news,’ which he and others in the Old Media are convinced cost Hillary Clinton the election. Of course, this ‘fake news’ is most accurately described as ‘news and/or opinions which do not line up with the views espoused by those on the left.’

In his article, he points to the latest outrage sparked by yet another Donald Trump tweet, in which he took umbrage to a Vanity Fair review of his own Trump Grill.

(Tweet: “Has anyone looked at the really poor numbers of Magazine. Way down, big trouble, dead! Graydon Carter, no talent, will be out!”)

Rutenberg, as with most old media journalists, treat these mini blasts from Trump as though they had been chiseled onto Moses’ stone tablets, such is the importance they give to 140-character, largely throwaway streams of consciousness.

In fairness, they can be quite entertaining, and given that Trump is going to be the next president of the United States, and an avid Twitter user, I can understand the fixation on them. In this particular tweet, Rutenberg sees the seeds of a victory for the old media he represents against Trump, who has been at odds with them since he embarked on his campaign for the presidency.

As Mr. Trump tries to burn the media village down, he may just be saving it.

His running campaign of Twitter attacks, declarations of failure and vows to punish the traditional news media is threatening to do what so many years of cost-cutting and re-envisioning could not do as easily: put the industry on more solid economic footing, where customers who realize its value are willing to pay for it more regularly.

It’s early. And, in traditional media, hope is the province of masochists.

But in the weeks since the election, magazines like The New Yorker, The Atlantic and Vanity Fair; newspapers including The New York Times, The Wall Street Journal, The Los Angeles Times and The Washington Post; and nonprofits like NPR and ProPublica have been reporting big boosts in subscription rates or donations.

It’s as if Mr. Trump’s media attacks have combined with the heightened attention on the perils of fake news to create one big fat advertisement for the value of basic journalism.

“The fake news business is going to be great for journalism in the long run,” Mr. Carter told me Friday, referring to Mr. Trump as “the Fake Newser in Chief.” “Proper news organizations should thrive under this.”

The irony if this is that Rutenberg’s conclusion describes the exact dynamic which existed between his Old Media and Trump throughout the campaign. That is, the constant attacks by the old media against Trump probably did more than anything to galvanize his supporters and turn those who originally opposed him. Take this quote from Slate Star Codex, who noted that he was an anti-Trump supporter, but understood the fact that the media, by ‘crying wolf’  enabled what should have been a joke candidate (in his eyes) to ascend to victory:

Stop fearmongering. Somewhere in America, there are still like three or four people who believe the media, and those people are cowering in their houses waiting for the death squads.

Stop crying wolf. God forbid, one day we might have somebody who doesn’t give speeches about how diversity makes this country great and how he wants to fight for minorities, who doesn’t pose holding a rainbow flag and state that he proudly supports transgender people, who doesn’t outperform his party among minority voters, who wasn’t the leader of the Salute to Israel Parade, and who doesn’t offer minorities major cabinet positions. And we won’t be able to call that guy an “openly white supremacist Nazi homophobe”, because we already wasted all those terms this year.

Stop talking about dog whistles. The kabbalistic similarities between “dog-whistling” and “wolf-crying” are too obvious to ignore.

Stop writing articles breathlessly following everything the KKK says. Stop writing several times more articles about the KKK than there are actual Klansmen. Remember that thing where Trump started out as a random joke, and then the media covered him way more than any other candidate because he was so outrageous, and gave him what was essentially free advertising, and then he became President-elect of the United States? Is the lesson you learned from this experience that you need 24-7 coverage of the Ku Klux Klan?

In that now-viral post, SSC points out the fact that the KKK has a memebership of about 5,000, which is about 0.02% of the population and orders of magnitude fewer numbers than groups like the Nation of Islam, Church of Satan and Harare Karishnas. Yet none of these groups are taken seriously at all, let alone feared by the media to have had the ear of a presidential candidate such that we should all cluth our children closer at night.

SSC notes Trump has explicitly ignored and denounced David Duke, the media’s KKK go-to figure of note, on a consistent basis since the year 2000. Yet this didn’t stop the media from beating on and on about Trump and his white nationalist base.

SSC tears apart many other similar old media talking points which were used to batter Trump with on a regular basis during the campaign. The problem for the old media was that their propaganda drives took place in the age of the internet, and more importantly in the age of social media. The existence of ALL of the source material and primary sources meant that the false narratives the old media could be deconstructed in real time, and spread to the public as a whole.

And in the face of this, the old media kept crying wolf, to the point where Rutenberg’s own employer had to print a mea culpa of sorts, in which it stated it would ‘rededicate’ itself ‘to the fundamental mission of Times journalism.’

Indeed, those last two words, Times journalism printed in that manner are quite curious. One would think that good, or even great journalism would be more appropriate an aim. By referring to their own special brand of journalism, one that had been categorically shoddy (recall, Rutenberg himself argued that it was right for journalists to treat Trump with open hostility earlier this summer), the piece from the Editorial Board reads less mea culpa and more ‘we’re doubling down.’

One of the NYT’s more famous columnists, Paul Krugman is in the midst of such a doubling down, a multi-day effort of Wrong spanned out across multiple outlets. To be sure, Krugman is an opinion writer, but in the context of this discussion, we live in a current journalistic climate in which doing ‘real’ journalism is to give the opinions of a leftist. To take an opposing view isn’t just disagreement, but heresy, worthy of censure. In that climate you can’t just have a difference of opinion, you are considered to be evil if you disagree.

Krugman’s meltdown began with this tweet last weekend in which he stated that Trump would be politically incentivized by a 9/11 style terror attack:

(Tweet: “Thought: There was (rightly) a cloud of illegitimacy over Bush, dispelled (wrongly) by 9/11. Creates some interesting incentives for Trump”)

He then frothed at the mouth after the Electoral College confirmed Trump’s Nov. 8 election victory:

(Tweet: “So it’s official, and it’s vile: the loser of the popular vote installed by Russian intervention, a rogue FBI, and epic media malfunction.”)

Then kept fighting the good ‘Trump is White Nationalist’ fight:

(Tweet: “To join Trump admin, you have to be white nationalist conspiracy theorist, but must also be always wrong re your supposed area of expertise)

His last three columns he wrote (here, here, here) were all to do with the fact that the election was stolen by the Russians and the FBI, and that our corrupt institutions let us down. On that final score he is partially right – our corrupt institutions have let us down – and it was because of that the electorate was galvanized by Trump and his call to ‘drain the swamp’ to take action against them.

The institutions didn’t want Trump. The problem was that in Clinton stood a candidate so corrupt herself that the institutions couldn’t deflect Trump’s charges. Clinton would have skated by a Jeb or Rubio, neither of whom were willing to ‘go there,’ and thus the public wouldn’t have cared about the alleged misdeeds of Clinton. If no politician was willing to stand up, the people would have trudged to the polls to elect Clinton, despite the stench of corruption.

Trump was different, Trump stood up to Clinton and the media who backed her. That’s why he won. And in the wake of it all, that same media has rushed to decry the constant discussion of that Clinton Stench during the campaign as ‘fake news.’

It’s been said repeatedly, but the post-election stance has shown that the old media has learned nothing. As they continue to define the fake news/proper news spectrum as pro-Trump/anti-Trump opinion respectively, they continue to dig themselves into a deeper hole.

Rutenberg is absolutely right in saying that proper news organizations will benefit wildly from the coming journalistic landscape, which in many ways is already here. However, given the waning trust in old media outlets like his, followed by his own shop posting middling profits, as well as an office space downsize in the offing, it is clear he has the specific organizations on each side of the real/fake news divide backwards.

Sunday Reads: 18 December 2016

    1. Roosh’s Kingmaker Podcast is recent, but very good. His latest effort, discussing the political nature of man is the best of the lot so far. My favorite point is the fact that despite the fact that The Powers That Be may make things unjust, men will always find a way around the roadblocks.
    2. In a similar vein, Vox Day discusses the growing phenomenon of SJWs banning dissenters to the Cultural Marxist playbook from popular social media, and subsequently trying to shame them when they set up shop in alternative settings.
    3. The Saker outlines the Neocon panic in light of ‘Russian hacking,’ with respect to Trump’s election, Syria, Russia and Iran, leading to a looming crisis point.
    4. Stephen Cohen, Professor of Russian Studies at Princeton and NYU remains one of the few figures in the mainstream old media and academia who has backed Trump on The Russian Question right throughout. He continues to do so in the face of the ‘Russian hacking’ allegations in this must-listen interview with NPR.
    5. Speaking of old media, the New York Times is vacating about 8 floors in its building, a move which it is spinning to be a positive.
    6.  John Hussman on the state of the market: It’s not that obscene valuations or syndromes of extremely overextended conditions are irrelevant for long-term and full-cycle market outcomes; it’s that the uniformity or divergence of market internals is critical in evaluating shorter segments of the market cycle. Put simply, what concerns us most here is the fact that we’re observing extreme overvalued, overbought, overbullish conditions in combination with unfavorable market internals on our measures, including yield pressures across interest-sensitive securities.
    7.  Peter Schiff discusses the markets after the Federal Reserve’s Interest rate decision.
    8. Cultural Marxism was dealt a stunning blow in 2016, but it’s far from dead. Oxford University wants to banish the use of ‘gendered pronouns’ in favor of the likes of ‘ze’ and ‘hir.’
    9. A look inside the hell that has been Venezuela’s hyperinflation-induced economic crisis.
    10. Nicholas Kristoff in the NYT tries to address the pitfalls of the leftist idea of championing diversity – except in thought. That his correct message falls on deaf ears in the comment section suggests continued defeat for leftists going forward, as their intolerance of opposing views will continue to give them problems in a world inching away from their worldview.
    11. The WSJ disabuses the idea that fake fact-checkers from Facebook can combat the ‘fake news epidemic.’
    12. Finally, from the humor department:

      The fact that someone like SJW All-star Chris Kluwe, hater of the 2nd Amendment, promoter of SJW faux values such as ‘equality’ and ‘diversity,’ is all of a sudden peddling ‘Rule of Law’ talking points is incredibly rich. The idea that a legion of Warcraft playing, neon-haired, skinny jean wearing hipsters, armed with futuristic MacBooks and Venti Starbucks lattes can successfully lead an insurrection against a confirmed Trump election is funny, to say the least.

Until next time.

 

Election Trutherism: Putin’s Akina-Inu Ate My Homewok

Hillary Clinton, spoke on Thursday to a group of her donors, presumably reassuring them as to why the $1 billion-plus they spent on her wasn’t a colossal waste of money.  She outspent Trump massively, while also having the vast majority of academia, the media, and pop culture behind her.

To lose with that sort of advantage at the foundation of her campaign from day one certainly makes this election result a contender for one of the greater upsets in political history. It had to be a tough ask, to get in front of the money men after such a catastrophe, which is probably why it took over a month for her to gather up the courage to face that music.

When she did, she chose to adopt the ‘Russia ate my homework’ explanation which had been a part of the discussion prior to the election, and has now been screamed from the rooftops afterward:

Speaking to a group of donors in Manhattan, Mrs. Clinton said that Mr. Putin, the Russian president, had never forgiven her for the accusation she made in 2011, when she was secretary of state, that parliamentary elections his country held that year were rigged.

“Putin publicly blamed me for the outpouring of outrage by his own people, and that is the direct line between what he said back then and what he did in this election,” Mrs. Clinton said.

It is the first time Mrs. Clinton has publicly addressed the impact of the hacks since the intelligence community concluded that they were specifically aimed at harming her campaign.

“Make no mistake, as the press is finally catching up to the facts, which we desperately tried to present to them during the last months of the campaign,” Mrs. Clinton told the group, which collectively poured roughly $1 billion into her effort. “This is not just an attack on me and my campaign, although that may have added fuel to it. This is an attack against our country. We are well beyond normal political concerns here. This is about the integrity of our democracy and the security of our nation.”

It wasn’t the fact that she was simply outworked by Trump. It wasn’t that she ran a campaign hyper-focused on an aggressive Identity Politics and a grievance culture which has long since worn out its welcome. It wasn’t that she merely assumed that because it was ‘her turn’ she would waltz to a coronation. It wasn’t that she was reckless with classified information while at Secretary of State. It wasn’t the fact that she was the poster child for modern day political corruption and pay-to-pay politics (exemplified by the very group she was speaking to).

It was the Russians and their mischievous hackers.

This Election Trutherism has been dutifully put forth by leftists and those in the Old Media who still cannot believe that Hillary Clinton lost the election. They have brought this Trutherism to a new level in recent days by lobbying for the Electoral College, which meets tomorrow, to reject the result of the election by denying Donald Trump the 270 votes he needs to become president. It is an exercise in hypocrisy and arrogance, not to mention a gross misinterpretation of the Constitution.

The Charge

Last week, The Washington Post published this story, which alleged that the CIA had come to a definitive conclusion that the Russians were behind the shenanigans that took place during the election, and did so specifically to aid Donald Trump at the expense of Hillary Clinton:

The CIA has concluded in a secret assessment that Russia intervened in the 2016 election to help Donald Trump win the presidency, rather than just to undermine confidence in the U.S. electoral system, according to officials briefed on the matter.

Intelligence agencies have identified individuals with connections to the Russian government who provided WikiLeaks with thousands of hacked emails from the Democratic National Committee and others, including Hillary Clinton’s campaign chairman, according to U.S. officials. Those officials described the individuals as actors known to the intelligence community and part of a wider Russian operation to boost Trump and hurt Clinton’s chances.

“It is the assessment of the intelligence community that Russia’s goal here was to favor one candidate over the other, to help Trump get elected,” said a senior U.S. official briefed on an intelligence presentation made to U.S. senators. “That’s the consensus view.”

There is plenty to note here, particularly the high level of vagueness involved. A ‘secret assessment,’ found that ‘actors’ with ‘connections’ to Russia leaked hacked emails to WikiLeaks, ‘according to US officials.’ There is not a shred of concrete evidence in any of these claims, and none has materialized since they were made.

Furthermore, that these alleged efforts were done with the express purpose of boosting Trump’s chances is also without evidence. The Post piece mentions that the CIA ‘findings’ had been questioned by other intelligence agencies, on the basis of there not being enough concrete information:

The CIA presentation to senators about Russia’s intentions fell short of a formal U.S. assessment produced by all 17 intelligence agencies. A senior U.S. official said there were minor disagreements among intelligence officials about the agency’s assessment, in part because some questions remain unanswered.

For example, intelligence agencies do not have specific intelligence showing officials in the Kremlin “directing” the identified individuals to pass the Democratic emails to WikiLeaks, a second senior U.S. official said. Those actors, according to the official, were “one step” removed from the Russian government, rather than government employees. Moscow has in the past used middlemen to participate in sensitive intelligence operations so it has plausible deniability.

These holes in the narrative were ‘corrected’ just a few days later when the major entities which comprise the Old Media reported that the intelligence community now believe that Vladamir Putin was directly involved, instructing the hacking and how it would be used. From NBC:

U.S. intelligence officials now believe with “a high level of confidence” that Russian President Vladimir Putin became personally involved in the covert Russian campaign to interfere in the U.S. presidential election, senior U.S. intelligence officials told NBC News.

Two senior officials with direct access to the information say new intelligence shows that Putin personally directed how hacked material from Democrats was leaked and otherwise used. The intelligence came from diplomatic sources and spies working for U.S. allies, the officials said.

Putin’s objectives were multifaceted, a high-level intelligence source told NBC News. What began as a “vendetta” against Hillary Clinton morphed into an effort to show corruption in American politics and to “split off key American allies by creating the image that [other countries] couldn’t depend on the U.S. to be a credible global leader anymore,” the official said.

In other words, the vague confirmation by anonymous ‘US officials’ that the Russians interfered with the election with the purpose of aiding Trump, was later backed up with ‘new intelligence’ from yet more anonymous ‘officials’ who declared that Putin was personally involved and even directed the whole thing.

Of course all of this vagueness can be justified as being necessary, so as to shield the sensitivity of ongoing intelligence work. The Post refers to this in its piece. However, that vagueness is also the perfect shield for narrative creation, which, in the context of the totality of the post-election events suggests that this is the likelier of the necessity of the ambiguity.

Spheres of Influence

The game is made much clearer once one advances from the contention that the Russians interfered with the election to the discussion of exactly how they interfered. Both Loretta Lynch on Thursday and President Obama yesterday unequivocally stated that there was no technical interference from Russia or anyone else in the election. In other words, voting machines were not tampered with, nor were votes incorrectly tallied, and things of that nature. This was confirmation from the highest level that the 2016 election was a free and fair one, at least in a pure technical sense.

So what is the outrage about? It stems from the fact that someone leaked emails from John Podesta and the Democratic National Committee to Wikileaks, who then leaked it to the public in driblets over the final months of the campaign. The Russians have been fingered as the ‘someone,’ and this has been spun to be evidence that the election was ‘hacked,’ and our Democratic Institutions have been tampered with.

That narrative is patently false, as Obama and Lynch have confirmed for us, and any characterization of Russian involvement in this manner is designed to deceive the audience. The Russians (if it was indeed them) engaged in an old fashioned data leak. That was it. They didn’t hack anything but John Podesta’s email account, and released its contents to the public.

The public was thus exposed to new information, which it absorbed and factored in to its decision making. If this constitutes an attempt to nefariously ‘interfere’ with the election, then the leak of the Billy Bush tape, in which Trump used some vulgar language in speaking about women, also qualifiesas an attempt to ‘interfere’ with the election.

Both leaks exposed pertinent information to the public about the candidates. That the Podesta and DNC leaks may have originated from international sources is irrelevant. The information itself was true, and damaging. Michael Tracey provides a bullet point list of what those leaks revealed in this piece, and he concludes it by correctly noting that what was leaked was most definitely in the public interest.

In short, the ‘Russians’ interfered with the US election by showing how the DNC and the Clinton campaign planned to themselves interfere with the US election by colluding with party bigwigs, donors and the media to stack the deck in her favor. They rigged the Democratic Party Primary against Bernie Sanders. Both Debbie Wasserman Schultz and Donna Brazile came under fire as heads of the DNC, with the former having to step down as a result. The latter was caught funneling debate questions to Clinton.

It exposed the private dealings of Hillary Clinton behind closed doors, notably her insistence that it was important to have both a private and public position on issues. It shed light onto some of the more shady dealings of the Clinton Foundation which coincided with Hillary Clinton’s time as Secretary of State. The leaks ultimately put some meat onto the bones of the concept that rampant political corruption goes on at the highest levels of modern government. Most people always suspected this, but lacked the concrete evidence. In many ways, those leaks provided that evidence.

It is telling that throughout the campaign, as the leaks were being delivered, those parties involved never outright denied the validity of the information being released. The most they could do was to appeal to the same sort alarm over foreign intrusion which has been taken to new heights post election.

The whole thing is reminiscent of the poker scene from the 1973 movie, The Sting, featuring Robert Redford and Paul Newman. Newman’s character, Shaw, outwits a mobster, Lonnegan, playing in a private game. The idea was to set Shaw up by trick dealing him a four of a kind, which in poker is a virtually unbeatable hand. This would induce Shaw to end up betting all of his chips, and possibly more, on such a sure thing. Lonnegan, carrying a second deck in his pocket, ‘dealt’ himself a better four of a kind, and thus would have shown down with Lonnegan, losing everything, thus completing the scam.

Shaw, wise to the gambit, was ready for it, and when the time came made a switch. The movie doesn’t show how he did it, but Shaw had originally been dealt four threes, while Lonnegan had been dealt four nines. The betting carries on until both players are all in. Shaw then turns over four jacks, to the dismay of all in the room. Lonnegan, defeated, storms into a side room angry enough to kill. His associate, bewildered, tells Lonnegan: “Doyle, I know I gave him four THREES. He had to make a switch. We can’t let him get away with that.”

Lonnegan response was famous: “What was I supposed to do – call him for cheating better than me, in front of the others?”

Unlike those on the left, Lonnegan understood that you can’t call someone out for being crooked when you are crooked yourself. Having been outsmarted, Lonnegan accepted Shaw had bested him and moved on.

Instead, the left has responded by ramping up the outrage, making it seem as though they had been wronged. Again, both the Attorney General and the President of the United States confirmed that the 2016 electoral process was a free and fair one, devoid of technical interference by any perpetrator, foreign or domestic.

Despite this, democrat politicians, aided by their leftist friends in the Old Media have succeeded in driving the hysteria about Russian involvement into the stratosphere. What happened was a data leak by unknown actors, who could have been foreign. What the old media has implicated, in their usage of terms such as ‘hacked the election,’ is that some sort of advanced espionage operation took place, which was coordinated to install Donald Trump as president.

In the past week or so op–ed after op-ed has filled the pages of newspapers across the country decrying the now ‘tainted’ election, calling on the Electoral College to rectify the situation when it meets on Monday. They’ve even resorted to the failed tactic of trotting out celebs to stand in front of a white wall delivering a public service announcement instructing the Electors to stand up for America and do the right thing, which is to not confirm Trump’s presidency. Naturally, the video has disabled comments and the like/dislike button.

Suddenly, Constitutional Originalism is In Vogue

Vox wrote this piece a few weeks ago to explain why it would be a legitimate action for the Electoral College to not vote for Trump, citing the constitution and Alexander Hamilton’s Federalist Papers writings. To be sure, it would be legitimate for the Electors to do whatever they wanted, individual state rules notwithstanding. The constitution allows for them to do this. However, the standard reasoning provided by leftist for why they should vote for someone other than Trump is wrong. The Vox article writes:

Constitutional history makes clear that the founders had three main purposes in designing the Electoral College.

The first was to stop a demagogue from becoming president. At the Constitutional Convention, arguing in support of the Electoral College, Elbridge Gerry of Massachusetts said he was “against a popular election” for president because the people would be “misled by a few designing men.” In Federalist No. 68, Alexander Hamilton wrote that the electors would prevent those with “Talents for low intrigue, and the little arts of popularity” from becoming president. They would also stop anyone who would “convulse the community with any extraordinary or violent movements.”

The characterization of Trump as a demagogue is a matter of opinion. The fact that political pundits in the old media refer to Trump as a demagogue nearly every time they speak about him does not make it a fact. The fact that Trump did tap into a huge wave of populism does not render his policies or his victory somehow illegitimate simply because of that populism.

Consider that Trump has been called a racist xenophobe for putting forth an immigration proposal that seeks to rigorously enforce existing law which for many years has been ignored on many levels. The fact that this is such a popular stance among his supporters and played a huge role in his victory has been used as an example of his ‘demagoguery.’

In terms of a ‘violent movement,’ to the left Trump’s campaign qualifies as such given his signal to aggressively follow the law means that those who break the law are going to be in for an uncomfortable time, to put it mildly. In the realm of immigration, this means illegal immigrants, a protected class of the left, are going to be subject to the ‘violence’ of facing consequences for breaking American immigration laws.

It says a lot about where we are as a society when calls to follow the law can be considered to be demagoguery, no matter how brash they are.

As for Hamilton’s wish to essentially banish charming, engaging, charismatic celebrity types from holding the office, if this is to be the standard, then most of the presidents in the television era are ineligible. Indeed, the 1960 Presidential Debates are immortalized based on the simple fact that the introduction of television altered the perception of the two candidates’ performances. Famously, those who listened on the radio believed that Nixon won, while those who watched on television believed Kennedy was more effective. Kennedy was the more visually appealing of the two, standing calm and assured, while Nixon famously looked a sweating mountain of nerves.

According to the standard now being imposed by the left, Kennedy’s superior charisma and charm should have been taken into account by the Electoral College, especially given the razor thin margin of his victory. Subsequent presidents in the TV era, from Reagan, to Bill Clinton, and even President Obama won, in part, on the strength of their charm, natural persuasion and ability to relate to people. They all displayed ‘talents for low intrigue, and the little arts of popularity,’ because it is a successful, almost necessary tactic in an era so influenced by television.

On the whole, this point is a non-starter, at all levels. Vox continues:

The second goal was to stop foreign interference in election. In the founding period, the framers were extremely concerned about infiltration by rivals including Great Britain. In Federalist No. 68, Hamilton wrote that one major purpose of the Electoral College was to stop the “desire in foreign powers to gain an improper ascendant in our councils.” He said that the college would “Guard against all danger of this sort … with the most provident and judicious attention” from the electors.

There is slightly more to this point, as I’ve discussed above. However, nothing about the Russian hacking rises to the level of gaining ‘an improper ascendant in our councils.’ If anything fits that bill, it would be the behind closed doors declaration of Hilary Clinton to international bankers that her dream was to establish a ‘hemispheric common market’ across North America, that would benefit globalist interest. It would be the Uranium One deal Clinton help broker with, you guessed it, Russia, as Secretary of State.

These are the sorts of things consistent with foreign entities looking to install a puppet as opposed to a relatively mundane action like a data leak. More from Vox:

The third goal was to prevent poor administration of government. This is a less well-known purpose of the Electoral College, but it is again expressly discussed in Federalist No. 68. Hamilton wrote that “the true test of a good government is its aptitude and tendency to produce a good administration,” and for that reason, he said, the electors should be “able to estimate the share which the executive in every government must necessarily have in its good or ill administration.”

Vox claimed that Trump had violated this goal because of his popular vote defeat, but that certainly isn’t evidence of anything. In fact the Electoral College exists precisely to prevent the majority vote from potentially harming the nation as a whole. Given that the majority voted against Trump, and thus against the rule of law to favor the nebulous concept of ‘racism’ as it is defined in 2016, the Electoral College worked exactly as it should have on November 8.

So while it is within the rights of the Electors to cast their votes in a manner that would deny Trump the presidency, the threat to the republic that is bandied as the reason for doing so does not exist. Trump is not a demagogue or foreign puppet and has not exhibited a stark inability to execute a good administration. The only ones who truly believe this are leftists and globalist Republicans, who collectively find Trump to be objectionable.

The grounds on which they have been objecting to Trump are the extension of a concept I’ve repeated over the latter stages of the election; that is the idea that racism, sexism, homophobia, xenophobia and so on are the gravest of societal sins while simultaneously being near ubiquitous in modern society. From the vantage point of this current cultural milieu, Trump is an illegitimate president, owing to his supposed racism and xenophobia.

Therefore, from this vantage point, looking to the Constitution for guidance, and encouraging the Electors to reject Trump is a legitimate course of action. More from Vox:

Modern-day conservatives favor so-called “originalist” understandings of the Constitution. They look to history and to the original texts of our founding documents for guidance. Recent decades have seen the invocation of original constitutional institutions to address present concerns, such as when the Rehnquist Court struck down Congressional laws such as the Violence Against Women Act and the Gun-Free School Zones Act on the grounds that they violated an originalist understanding of the Commerce Clause.

Whether or not you agree with such decisions, they establish the broad-spectrum appeal of our constitutional institutions — particularly in times of crisis. “Make America great again” is a clever marketing slogan. But our real greatness depends on employing our institutions and values to protect our republic from those who might prey on us.

This is written without a hint of irony, given the general leftist aversion to ‘originalist’ interpretation of Constitutional texts. Just in the last year or two they belittled the originalist opposition to gay marriage laws and Obamacare. Thus, their sudden sprint into the bosom of Alexander Hamilton and James Madison is tinged with hypocrisy.

As is Election Trutherism in general, given the fact that before the election Trump was hailed a threat to the 240 year republic for merely stating that he would wait to confirm the legitimacy of the election result rather than blindly accepting it. Now that Trump has won, the same factions which decried him are not accepting the election results, owing to their disagreements with Trump’s politics wrapped in the veneer of foreign meddling.

Had the shoe been on the other foot, there would have been calls for Trump’s arrest for disrupting the ‘peaceful transition of power’ in the way the leftists are doing to Trump.

Trump is a threat because his flouting Politically Correct cultural norms threatens the source of power that leftists have used to wield their influence on society. By establishing their opinions on social issues as the moral ones, mere disagreements are thus immoral, and therefore their disruptions become justified. Of course their views are conjecture, and nothing more.

Despite the jittering protestations of the likes of Keith Olberman, in a free and fair election, Donald Trump won 306 Electoral College votes, and thus the Presidency. None of the contingencies which should prompt the Electors to intervene exist. Even if the Electors chose to overturn the electoral vote on Monday, the decision would go to the House of Representatives, who would most likely elect Trump.

Conclusion

The entire episode is part of the drive to de-legitimize the Trump presidency. It is an attempt for leftists to deny responsibility for their loss, despite having the deck stacked in its favor. In crying foul, they give themselves an out. The drudges across the political establishment, from media pundits and columnists, to polling companies, to campaign advisers, lobbyists and other insiders, all rely on the status quo for their daily bread. That they completely misread Trump’s candidacy and the American electorate, even well after the election has ended, indicates that their usefulness is over.

Unless the election was literally stolen, swindled from under their noses. In this case, it wasn’t their fault. Their world view, their reading of current events, their prescriptions for the future were actually correct; it was unforeseen injustice which got in their way. It’s incredibly self-serving.

It is also incredibly encouraging to those of us who were on The Right Side Of History the entire time. Because to us, these flare-ups and meltdowns emanating from the left confirm that they have no wish to change. They have no wish to stop trying to foist their delusions of equality and social justice on the rest of the public, through the ‘everything and everyone is racist’ mode of argument. A mode of argument which, had just received a resounding defeat in the marketplace of ideas, as evidenced by the election results, and the growing influence of internet culture.

So let the leftists continue down this line for as long as they wish. Their losses will accrue accordingly.

De-Legitimizing 45

Ever since the election, leftists in the old media have been constantly attempting to de-legitimize Donald Trump’s victory:

  • The knee jerk response was to create the narrative that ‘Racism Won,’ best exemplified by Van Jones’ infamous ‘whitelash’ comment on election night. This was followed by further highlighting the alt-right, and Richard Spencer’s antics at his NPI conference a few weeks later.
  • The idea that ‘fake news’ spread on social media cost Clinton the election.
  • The recounts, based on spurious findings by computer scientists that the election results in Wisconsin, Michigan and Pennsylvania (the states which won Trump the election, which coincidentally have enough electoral college votes to award Clinton the presidency had they been flipped)
  • The promotion of faithless electors via the biggest megaphone in the old media
  • The ‘confirmation’ that the Russian government influenced the 2016 election with a view to helping Trump win

These narratives have all been splashed across the media nonstop in the month since the election with the express purpose of de-legitimizing the result. The leftist old media did everything it could in the run up to the election to stop Trump, and those efforts failed. Having lost, it has retaliated by attempting to brainwash the public into thinking that Trump’s presidency is somehow not legitimate.

Given that many on the left, particularly the hardcore Social Justice set were so blindsided by the result, it is easy to understand why this line of response by the old media could be viable. But to the rest of us, it looks like sour grapes. There would be none of this if Clinton had won.

Trump is about to pick Rex Tillerson as his Secretary of State, according to most rumors. This has set the old media alight, given Tillerson’s friendly stance with Vladamir Putin. Of course there was none of this outrage when Clinton was still a presidential candidate, despite having dealt very favorably with the Russians as Secretary of State herself.

Indeed, the old media would have the public believe that the Russians are America’s public enemy number one, a position they laughed at Mitt Romney for having four years ago. They are siding with neocon warmongers in making saber-rattling display towards a nuclear power, simply because that position is the one on the other side of Trump’s.

The old media is playing a dangerous game, and to implicitly advocate for nuclear war over a disdain for the politics of its opposition suggests how bankrupt its views really are.

Trump’s Greatest Challenge

…will be restoring the American economic machine to its former glory. To the extent he is able to achieve this, a lot of ills that may crop up elsewhere may be forgiven. Trump’s economic progress will be especially important from a political sense given the fact that Trump is the ‘change’ candidate. He ran, and was elected on a promise to shift away from the status quo in all aspects. Should the Trump economic doctrine fail, it will poison the anti-status quo rhetoric which won him the presidency for decades to come. It will potentially open the door for a complete and total return to power for the ‘establishment’ forces in a way that may be more damaging than if Hillary Clinton had won instead. That underscores how important it is for Trump to get the economics right.

As I write this, we are in the midst of a post-election victory haze which has seen the stock market make new highs virtually on a daily basis. Stock in commodities and manufacturing have risen by upwards of 50%. Trump himself has lauded the reaction in stocks since November 8 as a validation of his election.

In some ways he is correct. Should he enact his policies, especially the cutting of corporate taxes and reducing regulations, the business environment in this country will improve, which will lead to greater profitability and thus higher stock valuations.

The issue is that the market correctly assigning higher stock valuations to publicly traded companies is happening in an environment in which these valuations were already in the realm of the absurd. Indeed, Trump himself lamented the fact that the stock market was in a giant bubble on the campaign trail, calling it a ‘false’ stock market. Now that he has won, and stock prices have rocketed even higher, Trump is being inconsistent in his praise for what can only be described as the bubble getting even more absurd.

What has driven this bubble to its current heights has been the torrent of debt unleashed on the economy over the last 7+ years. This debt, in turn was facilitated by the depressing of interest rates to levels not seen in the history of the developed world, for nearly a decade, without interruption. Sticking with the United States, the Federal Reserve quintupled the size of its balance sheet, which enabled the totality of credit outstanding to continue to expand, in the manner it has done for the better part of four decades.

The result has been the restoration of the 2008 bubble, the popping of which led to so much destruction. What is important to note is that this bubble, like all bubbles, will pop. The only question is the needle which pricks it. It very well might be the Federal Reserve, which is set to raise interest rates at its meeting next week. It might be the plunging of the economy into a full blown recession, which is a natural part of economic cycles, but truly devastating when a bubble has been the foundation of the preceding period of growth.

Regardless of how it starts, the fact is that one peach of a smash is inevitable. This is because of the fact that as it currently stands, the US economy employs a debt driven consumer spending model as its method for achieving economic growth. This sort of model relies on constantly expanding debt, and constantly rising prices. These are two facets which are unable to endure indefinitely, much in the same way it is impossible for a human being to naturally propel oneself through the air indefinitely without gravity asserting itself at some point. From an earlier piece I wrote on the subject:

At some point, markets can’t support prices at the high levels producers need to set, which in turn leads to prices falling, profits falling, trouble servicing debts, liquidations, and layoffs. Yet, the solution presented by mainstream economics is to guide prices higher again.

All actors in the economy, from the government, to households to business are currently over-indebted.

As a result we are getting closer to the point when there will be no one left to take on the new debt required to push prices ever higher, in order to keep the ‘growth’ going. As this become more and more apparent, prices will start to fall, loans will become bad, bankruptcies will rise, and all the rest of it. Then the political game truly begins.

The economic carnage will be universally blamed on Trump, and it will not be a difficult story to sell. The surface level thinking will show that the economy was ‘fine’ under Obama, with rising stock prices, rising GDP, home prices and employment levels, a reduction in the deficit and so on. The fact that these metrics are superficial, and easily gamed by the cheap money which will have evaporated in the downturn will be overlooked.

It is at this point that the most pivotal moment in Trump’s presidency will arrive. He will have to choose between attempts at reflating the burst bubble, and allowing market forces to play out, and then rebuilding on the new landscape that forms thereafter.

The standard politician has always taken the former route. It is the route of political expedience, the route of slavish devotion to abstract metrics such as GDP. The last two administrations have done exactly that. In the wake of burst Internet and Housing bubbles, the Bush and Obama administrations respectively, in conjunction with the Greenspan and Bernanke Federal Reserves ‘stimulated’ the economy via a lowering of interest rates and dramatic increases of debt. The debt taken on under the Bush administration equaled that of the cumulative debt of every president prior to him. Eight years on, President Obama matched that dubious achievement.

The consequence of allowing market forces to run their course would have been catastrophic, in fairness. This is largely because the multi decade advance of asset prices was also the savings vehicle for many in the Baby Boom generation. For decades, they had not had to build real, legitimate savings because asset prices were always rising. When the time came to retire, conventional wisdom held, it was simply a matter of selling the assets and living happily ever after. That all changed when the bubbles burst, particularly in 2008. For many Boomers, their retirement nest egg had been wiped away, or at least severely diminished, just at the very moment they needed it.

The actions of world governments and central banks in attempt to reflate the bubble was in some sense a refusal by the Boomer generation to accept their mistake, demanding that economic gravity be defied indefinitely until they were made whole again.

These actions were able to ‘fix’ the problem in the short run, but are fundamentally inadequate for the long term. Indeed there has been positive talk about home prices which are nominally flirting with 2008 bubble levels. At some point there will again be ‘too much debt,’ and the whole system will be under pressure once more. The fact that asset prices have been engineered higher for the benefit of Boomers means that these very assets will be increasingly out of reach for a younger generation which itself is overburdened by student debt the Boomers never dealt with when they were young.

This will necessitate still further debt and money printing to enable the younger generation to purchase assets from Boomers at these stratospheric levels, in order for them to retire.

This paradigm is the equivalent of fixing the negative symptoms of a drug withdrawal with a higher dose of the drug. I sets in motion a cycle in which the only conclusion is either an overdose or the mother of all withdrawals.

The correct solution is to endure the withdrawals, no matter how bad they are, because they will still be better than a certain overdose. In the context of the current economic situation, that means allowing the gaggle of bad debt which hangs around the neck of the economy like an albatross, to be purged from the system.

Trump should understand this scenario well – for it mirrors the situation he was in personally during the early 1990s. Having overextended himself in the late 80s, he was in a fair bit of trouble, to put it mildly, when the market turned. This is all well documented, but Trump’s Comeback would not have been possible without a renegotiation with his creditors. This allowed Trump to survive without having to sell the assets which he had accumulated to that point, and set the stage for him to grow his empire not only to far greater heights, but with a far greater foundation which offered a substantial margin of safety.

The United States as a whole is need of something similar happening. I suspect, on some level, Trump is aware of the nastiness which might be involved. Back in May, he revealed as much when he suggested that the United States could simply renegotiate its debt to alleviate its problems. This set off a firestorm in the media, which posited that Trump would be threatening the pristine credit history of the US government, which had always honored its debts.

That is patently untrue, but the real cause for alarm comes from the fact that the bond market, and in turn all markets, rest on the fundamental idea that it is true. That is, US government debt is a 100% certainty to be paid on time and in full. As such, for Trump to suggest that the debt could be ‘renegotiated’ would upend world markets.

The premise from which this potential turmoil originates from is faulty however. The US does pay its debts on time, but owing to money printing exercises, it has not necessarily been paying them in full. Paying debts with printed money is to pay in a currency that is worth less than when it was borrowed. In theory, the interest rate should square the difference, but given that interest rates have been held artificially low by the Federal Reserve, a real case can be made that America’s creditors have already had involuntary renegotiations with America, which has been implicitly defaulting on its debt for years now.

What Trump mentioned in May was an explicit default. In that event, the tumult would be extraordinary, with interest rates rising precipitously, prices falling precipitously, and a temporary state of near depression ensuing, perhaps worldwide. Yet it would be the right thing to do.

The current game of kicking the can down the road and hoping for economic miracles has not worked. Consider that in the last two presidencies, each has had to double the national debt and keep interest rates at historic lows merely to maintain a period of growth with had nothing to show for it but stratospheric asset prices and a war torn planet. In the meantime wages have stagnated, home ownership has dropped, labor force participation has dropped, high paying manufacturing jobs have been replaced by low paying service sector jobs, and only those over the age of 55 have seen a net increase in employment.

This is the paradigm which the Keynesian academics, global central bankers and short term-ist politicians believe justifies the doubling the debt every 8 years to preserve.

In rejecting that prescription, Trump would put America in the position he himself was in in those early 1990s days, when he would tell himself repeatedly, ‘survive til 95. Survive til 95.’ It was at that point he figured that he would be able to have a proper foundation to work from, and that sustainable growth could begin.

The short term carnage which would result would no doubt be pounced on by a leftist media which will have been constantly begging for him to fail. There would be no end of horror stories describing the bankruptcies, foreclosures, layoffs, business closings and so on that would descend upon an a economy ridding itself of bad debts. These unfortunate occurrences would then be used to bolster the leftist line that Trumpism generally, with its America Fist, anti-globalist bent is a proven failure, with a view to then restoring the globalist, politically correct politics it was after all along.

Trump’s messaging  in the face of such an onslaught will have to involve the explicit illustration of our bubble-crash-new bubble cycle, and the framing of our choices as I’ve outlined.

It will be a truly Herculean task, merely because the size of the bubble is such that even the most modest worker will be involved owing to the fact he or she probably has a 401K. It will be difficult for the truism that all long term gains require short term sacrifice to gain traction when that sacrifice comes in the shape of a declining 401K or home price.

Indeed, we live in a culture which has been conditioned to crave instant gratification. The idea of saving and investing, and not seeing the fruits of that saving until years in the future is increasingly an alien concept. To impose a necessary, but painful economic downturn will be potentially suicidal to Trump’s political career, but a necessary component to a sustainable, longer term recovery.

It is because of this that there will be a strong temptation for Trump to do as his predecessors did, and to try and restart the bubble machine. However, as I’ve made clear here, it is the wrong answer. As I’ve mentioned before, I suspect that Trump does know the right answer. Indeed, his campaign was centered on having the ‘right answers’ in other areas such as immigration and foreign policy.

In these arenas his anti-status quo approach is correct. The same is true of the economy, and more specifically the debt driven consumer spending model of growth that currently drives it. That is the status quo. That has led to failure. That needs to go. Trump’s task, if he really is to go down as a great president, will be to destroy the bubble-crash-bubble paradigm and free an US economic machine, now running on savings and investment instead of cheap credit, to start once again, all the while holding the hand of a skittish public through the transition.

More On Old Media Bias

In ‘On Media Bias,’ I wrote the following:

Bias is a part of humanity, and there really isn’t anything wrong with it. Anyone who reads the stuff I write will know where I stand. I don’t hide anything. Even if you hate things like free markets, Western Civilization, the gold standard, traditional American values, and Donald Trump, you can’t be annoyed with me personally because I do not hide the fact that I support these things and tailor my words accordingly.

 

What people don’t like is duplicity. And for decades now, the mainstream media has been guilty of it in spades. This is because it (by ‘it’ I mean the collective of ABC, NBC, CBS, CNN and even Fox News, as well as the New York Times, Washington Post and numerous other major papers) purports itself to be objective actors who merely act as sieves, filtering the torrent of news that comes out in a particular time frame into the most pure elements.

In the past few days, Liz Spayd, public editor of the New York Times, has come under fire from those in the leftist old media, merely because she veered into the land of objectivity, which organizations such as the NYT hold themselves out to be. Brian Stelter of CNN implored is fellow journalists on TV to refer to Trump as an authoritarian strongman. Time magazine awarded Trump the ‘Person of the Year,’ but just couldn’t graciously give him the honor without adding some snark in the subheading, calling him the ‘President of the Divided States of America,’ as though he did the dividing as opposed to merely exposing existing divisions:

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The old media has been exposed bare during this election cycle, and they are showing no signs of learning from what happened.

The Spayd saga started when she went on Tucker Carlson’s show on Fox News to discuss a few tweets by NYT reporters which Carlson felt to be unbecoming:

Carlson’s point was that most of those journalists had no business injecting their personal criticisms of Donald Trump into the discussion via their tweeting if they still wanted to be called journalists. He spoke in tougher terms, naturally, but Spayd didn’t necessarily disagree with Carlson’s overall point.

To be sure, some of the tweets in question were rather tame, but a couple of the examples Carlson brought up were instructive:

Those tweets, as Carlson points out, give the impression that the media did its job by actively trying to keep Trump from getting elected, but failed because the pesky electorate wanted what they wanted. This is particularly true of Barbaro, who tried oh so hard to craft a narrative of Trump as Sexual Predator, with two major hit pieces in the NYT over the course of the campaign.

Spayd has been castigated for somewhat agreeing with Carlson’s point that there should be some semblance of objectivity in news reporting, especially when it comes to organizations with prestigious names, such as the NYT. Some suggested she should resign, and others suggested she was a disgrace.

That backlash is telling, in that it seems that for some of these leftist old media types, objectivity is potentially an antiquated thing in 2016. The NYT themselves famously struggled with this issue over the summer. The problem for the old media is that a push away from objectivity in the face of an adversary they don’t like is only going to backfire. Consider Brian Stelter’s assertion this weekend that the media should explicitly refer to Trump as an authoritarian strongman, and to ‘start using those words on TV.’

Stelter bemoans the fact that in authoritarian countries, the first thing a strongman does is to de-legitimize the press. While this is true, Stelter doesn’t realize that his position on Trump is what is doing the de-legitimizing, in that he is, and has been subscribing to the ‘Trump is literally Hitler’ argument for a year now, merely because he disagrees vehemently with Trump’s views.

In the article that accompanied the announcement of Trump as Time Person of The Year, while accurately describing the Trump phenomenon in some parts, was chock full of passages such as this:

His rhetoric had in fact opened up a new public square, where racists and misogynists could boast of their views and claim themselves validated. And to further enrage many Americans, Trump regularly peddled falsehoods, without offering any evidence, and then refused to back down from his claims. He promised to sue the dozen women who came forward to say they had been sexually mistreated by him over the years. He said he might not accept the outcome of the election if it did not go his way. He described a crime wave gripping the country based on a selective reading of statistics.

Rich, considering the Exhibit A of Trump’s ‘racism’ was the fact that in his announcement speech he ‘called Mexicans rapists, murderers and drug peddlers,’ which is only true through a ‘selective reading’ of what Trump said in full, in addition to erroneously thinking that ‘Mexican’ is a race.

As I’ve mentioned before, there is nothing wrong with bias, we all are biased to some degree. I don’t think reporters such as Stelter or Barbaro should be blamed for being biased. But what they do is ascribe an air of objectivity to what is really subjective bias, such that anything that opposes that is conspiracy, or more fashionably, ‘fake news.’

In constructing that paradigm, and then treating those who then disagree with it as thought criminals and worse, the old media is behaving like the authoritarians they accuse Trump of being, while painting the part of the public which doesn’t share their views into a corner. The fact that Stelter’s show is called ‘Reliable Sources’ is a bit of irony that underlines this point.

When disagreement is a social crime, dissidents are going to retreat into the underground and build its own resistance. This is what the alternative media is all about. The objectivity void created by the old media will be filled by others who are equally biased, but simply represent the other side of the argument. And given the old media’s side has shown to have bankrupt messaging, that other argument will become more and more attractive.

On the Carrier Deal

Last week, President Elect Donald Trump signaled his intent to follow through on his campaign promises when he personally intervened in a situation in which would have seen over 1000 manufacturing jobs move to Mexico from Indiana. Carrier, the business in question had planned to move those jobs and announced that the plant would be shut down in February. It became a campaign issue right after that, as Trump latched onto it, citing that specific deal as a symptom of the overall multi-decade problem of manufacturing being gutted in America.

Over the Thanksgiving festivities, Trump took to Twitter to note that a deal was being discussed:

Then a few days later, when it was completed Trump announced that he was going to visit the plant to meet the workers, as part of a ‘Thank You’ tour:

While the move clearly had a ton of political symbolism attached to it, it was a functional reminder of the Trump Doctrine, as it pertains to the economy, jobs and trade. It was a symbol that represents the Trump’s ‘America First’ outlook that he campaigned on.

The whole situation has been met with scorn from commentators on both the left and the Principled Right. From the left, the charge has been that United Technologies, the parent company of Carrier, was enticed to keep the jobs through a smattering of tax cuts and a promise of a more favorable regulatory situation. This was outlined by Bernie Sanders in a Washington Post op-ed.

The specific charge Sanders and others make is that Trump is flip flopping by giving ‘concessions’ to Carrier when he ran on being tough on corporations who send jobs overseas. In particular, Sanders says that Trump promised to levy a tax on these businesses, and here he is actually giving Carrier a tax cut.

This is yet another willful misinterpretation of something Trump does/said that has been a feature of leftist vituperations for 18 months now. During the campaign, Trump spoke of levying a ‘tax’ (tariff) on goods of companies which moved their jobs out of the country. That is a conditional statement. Carrier agreed to keep jobs in the country, and as such are not going to be subject to any additional ‘tax’ on their goods.

Furthermore, the reason for the about face isn’t cause for outrage. All reports indicate that Carrier was to receive a $7 million tax break over 10 years,or $700,000 per year. As Eric Bolling points out, the amount generated by state in taxes from the 1000 plus jobs that will remain far exceeds the amount in tax breaks for Carrier:

This is not to mention the amount of taxpayer money that won’t be spent on welfare for potentially 1000 people and their families.

During the statement Trump made at the Carrier plant, he indicated that his presidency would create a great environment for companies such that they wouldn’t want to leave:

But also, I just want to let all of the other companies know that we’re going to do great things for business. There’s no reason for them to leave anymore because your taxes are going to be at the very, very low end, and your unnecessary regulations are going to be gone.

 

We need regulations for safety and environment and things. But most of the regulations are nonsense — become a major industry, the writing of regulations. And that these companies aren’t going to be leaving anymore. They’re not going to be taking people’s hearts out. They’re not going to be announcing, like they did at Carrier, that they’re closing up and they’re moving to Mexico — over 1,100 jobs.

He cited the fact that during his travels campaigning, the one thing he kept hearing from businesses was that the poor regulatory state was their number one concern. Indeed, the average cost of regulations for a manufacturers was about $20,000 per employee. The Carrier plant specifically was under the burden of 53 new regulations in the last few years, which ultimately had made doing business in America unprofitable. This is why businesses are leaving America, and Trump has vowed to change that, by lowering taxes and massively scaling back regulations.

Many are failing to understand that this Carrier deal is a symbol of what will happen across the business community in a Trump presidency. It is not that Trump will get on the phone with every CEO in America and cut individual deals – of course that is unfeasible. It is that the basics of the deal – the government allowing a business to keep more of the money it earns while not being burdened by onerous regulations – is a generous enough ‘offer’ from the government to business in America such that they will want to keep their operations in the country on their own. That is the point.

Justin Wolfers, a leftist economist, also missed the point when he described this deal as Trump interfering with the natural churn of the economy, in that it creates and destroys jobs on a regular basis:

But the Carrier case also illustrates a larger point about how the economy works. In Mr. Trump’s telling, the economy is a fixed set of jobs getting shifted around a global chess board. Mexico’s loss is our gain and vice versa.

But you should think of the economy as being in a state of constant churn. The economist Joseph Schumpeter used the now-famous phrase “creative destruction” to describe this process by which new firms push out the old. The result can be cruel, but an extraordinarily fluid labor market, many economists argue, is the secret of American dynamism.

For a start, this deal was not about destroying jobs. These jobs were not being destroyed, but moved to another country. These jobs are not obsolete in the context of a modern economy. They were moving because they could have been done more efficiently elsewhere. The key is that the relative inefficiencies of staying in Indiana were totally self-wrought as opposed to being fundamental in nature. Removing those inefficiencies should really be no big deal, but for government it has been.

Furthermore, it is really rich to see an economist like Wolfers cite Schumpeter’s creative destruction. Economists of his ilk decry the phenomenon when it is correctly applied to our bubble economy as a whole. Many, such as myself have called for the American economy to shed its reliance on unstable bubbles and to move towards a more robust economy infused by the dynamism Schumpeter’s of creative destruction concept.

This involves the ‘destruction’ of the bubbles of yore, and thus necessary declines in asset prices, and debt levels, along with substantial increases in interest rates. That is beyond the pale for economists such as Wolfers who think that falling prices are the worst possible thing to happen to an economy.

Back to Carrier, many of the Principled Conservatives on the right are having big problems with the image of a specific company dealing with the government on a one on one basis in this manner. This group of critics (also some leftists, with a sudden reverence for Adam Smith) have slammed Trump for being anti-free market, dictating to individual businesses how to run their companies.

The first response is that in reducing taxes and regulations, Trump is actually moving towards a free market, not away from one. The ‘deal’ Trump is offering is not ‘Stay here, and be subject to high taxes and high regulations or face huge tariff,’ but ‘Stay here, we’re going to lower your taxes and regulatory burdens, but if you want to go anyway, you’ll be subject to a tariff.’

The latter option is a far superior one, despite its protectionist bent. I’m not a hardcore protectionist per se, I do recognize that tariffs are an effective tax, and they are not necessarily a free market construct. But tariffs are superior to a higher income tax, corporate tax and higher regulatory burden. Income and corporate taxes accrue to the government, while a tariff accrues to a protected class of business. The tariff influences behavior, but to a much lesser degree than do income taxes. In my view, the trade off for isolated tariffs for lower income taxes and regulation is a net positive.

Secondly, this specific deal has an element which hasn’t been discussed much – the Military Industrial complex. It has been speculated that Trump threatened the lucrative government contracts that United Technology has with the US government. These sort of contracts, and the existence of the MIC generally are a negative to anyone who of a free market mindset. Over the past 5 or 6 decades these sort of webs have been slowly built and expanded upon to the extent that corporate welfare is a very big problem.

The length of time over which this situation has developed means that untangling them isn’t going to be a quick thing. We aren’t going from a Corporatist attempt at Social Democracy to a free wheeling free market overnight. In (possibly) threatening United Technologies in this manner, Trump has done a very pro-market thing. He (possibly) used a feature of the corporatist landscape as leverage to benefit ordinary Americans.

That same dynamic applies to the arguments over the tariff question. The Principled Conservative argument of free trade listens well, but the reality is that multinational trade agreements such as NAFTA and TPP are not examples of free trade. Republicans and Principled Conservatives always argue against tariffs in that they are ‘regulated’ trade, yet thousand page bills written by politicians and special interests are apparently ‘free trade.’ Real free trade requires no agreements, no legislation, nothing. What we already have is far from free trade. So let’s mold it in our favor. Ideally this landscape would not exist, but when life gives you lemons, make lemonade.