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See the true trend of the US economy, hidden in the daily news

1 August 2014

Summary: today’s post is another helping you more clearly see the present. We look at the condition of the US economy in pictures, cutting through the statistical noise and economists’ hopes that fog our vision. It’s easy to see, if we try.  When we decide to try, America will become a different (and better) nation.

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Clear vision

During the past 4 years I have reported (& predicted) that the US economy has remained locked into slow growth, vulnerable to a shock (perhaps knocking it into recession), despite constant forecasts of acceleration coming really soon — returning us to normal growth.

If we had accurate newspapers, most economic reports would read like this:

The new economic data released today — the XXXX number — came in slightly less than expected by the consensus of economists, continuing its stable slow growth since early 2011. The monthly numbers change, but the trend does not. Also unchanged are economists’ assurances that the economy will accelerate during the next few quarters.

We often obscure this slow growth by reporting the change in terms of absolute numbers rather than percentages (since the population and economy grow over time, the same number represents a smaller percent change over).

News without the fake drama — would it sell advertisements? Or rather, we get the quality of news that we refuse to pay for.

This week the government released major new economic data. As always, analysis focused on tiny monthly changes (i.e., statistical noise) that support their forecasts, pretending to be ignorant of the tools to show statistical significance. And conservative financial “experts” whined about the large revisions made to past data (amnesiac about their complaints that the government taxes and spends too much, and the resulting gross underfunding of the vital government statistical agencies — our eyes by which to see the world.

So what did we learn?

(1)  Real Gross Domestic Product

Let’s look at real GDP excluding inventory swings (which mask the trend), also called Real Final Sales. It has run at 2% per year for the past 3 years (starting Q2 2011). The month-on-month per cent change shows the trend, if you are familiar with such graphs.
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GDP: Final-Sales
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The same numbers shown as percent change since a year ago (YoY, year-on-year change) more easily shows the trend — flat for 4 years — but will more slowly show the eventual change in the trend.

Read more…

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We love the Constitution yet hate our government. The past tells us why.

31 July 2014

Summary:  The pasts of other nations provide insights into the problems of America today, free lessons of what works and what fails. Some pasts are more relevant than most. Some are more disturbing. Some are both; these are the ones that deserve your attention.

The Hitler Myth

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As discussed here previously, NAZI Germany was the first nation to break from traditional modes of western society into modernity. During and after WW2 the West followed Germany into a world with a new morality, plus new physical and political technology.  Although we recoil from direct comparison to NAZIs, we seldom feel uncomfortable from the aspects we have in common. Perhaps we should.

Excerpt from “The Good Tsar Bias

By Xavier Marquez
Prof Political Science, Victoria University of Wellington

At his website, 16 July 2014
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Ian Kershaw’s remarkable book The “Hitler Myth”: Image and Reality in the Third Reich {see Wikipedia} is a really clever piece of public opinion archeology. It attempts to reconstruct the rise and fall of Hitler’s popularity in Nazi Germany, drawing primarily on secret reports compiled by the Gestapo, the Security Service of the SS, and the clandestine agents of the banned Social Democratic Party.

…Among other things, the book makes the case that, at least until the war started turning sour in late 1942, Hitler was far more popular than the Nazi Party, which quickly grew to be disliked, even despised, by the vast majority of Germans,  despite the initial improvement in economic conditions they experienced in the early years of the Third Reich:

At the centre of our enquiry here is the remarkable phenomenon that Hitler’s rising popularity was not only unaccompanied by a growth in the popularity of the Nazi Party, but in fact developed in some ways at the direct expense of his own Movement.

In Kershaw’s telling, the contrast arose primarily from the fact that the “little Hitlers” (as Party functionaries were sometimes derogatorily called) were constantly encountered in everyday life, where they were perceived, not without ample justification, as corrupt and overbearing, while Hitler operated on a “higher” plane, concerned with the “big questions” of war and peace.

America has no Leader as the foundation of our political regime. But the dynamics Kershaw describes might explain the largest anomaly of modern American politics: we revere the Constitution — increasingly so, if the Tea Party is representative — but have low and falling confidence in the Republic’s political institutions. From Gallup’s 2014 Confidence in Institutions poll:

  • Supreme Court:…….30%
  • Presidency:…………..29%
  • Congress:……………..07%
  • executive agencies:..???   (most probably rate very low)

Read more…

Myths about the Vietnam War laid the foundation for our Forever War

30 July 2014

Summary: Today we have a reading that provides insights about our mad wars, written by someone who fought in the Cold War and later fought to prevent more wars. He explains how our leaders steered us into supporting these wars, such as by creating the myths about Vietnam that laid the foundations for our forever war. Essays like this are useful, since learning from our experiences can help cure our problems. We can do better.

POW-MIA Flag

 

America’s Memory of the Vietnam War
in the Epoch of the Forever War

H. Bruce Franklin (Professor of English, Rutgers)
Los Angeles Review of Books, 16 July 2014

Opening

WHILE WASHINGTON PONDERS the ifs and wheres of our next military adventures, the hawks are shrieking against America’s “war weariness” and croaking that Americans have no right to be weary.

  1. Robert Samuelson writes in The Washington Post that our unending wars have “posed no burdens, required no sacrifices, and involved no disruptions” for us civilians.
  2. William Kristol, who promised us in 2003 that the invasion of Iraq would be a “2 month war, not an 8 year war,” raves that the “war-weary public” must again be “awakened and rallied.”
  3. Sounding her familiar alarm, Condoleezza Rice urges us to “heed the wake-up call of Ukraine” before it’s too late.
  4. “Of what exactly are you weary,” demands an irate Wall Street Journal correspondent, arguing that those with an authentic right to weariness are just “those who have suffered severe physical and mental wounds or lost a loved one.”

War-weary citizens seem to be just a gaggle of selfish, spoiled brats, traitors to the heroes fighting our wars.

Maybe we have no right to be weary of our young service people getting maimed and killed, weary of the slaughter and devastation we have been inflicting on peoples in dozens of nations, or selfishly weary of having trillions of dollars sucked out of health care, education, infrastructure, and the environment to pay for these wars.


Perhaps we have grown weary of our endless post-9/11 wars. Just as after Vietnam we were weary of war. But after Vietnam we had not learned from our experience; so eventually we resumed our wars. If we have not learned from our Long War, eventually our wars will resume.

Learning from history

There is another explanation for our lack of enthusiasm about our forever war: perhaps we have learned the futility of these wars — and the folly of listening to hawks about our wars.

Read more…

The teaching of ignorance: what nation most contributed to the defeat of Germany in 1945?

29 July 2014

Summary:  When looking at America’s problems it’s easy to forget that we’re a part of Western civilization, and share many social dynamics with our cousins in other nations. Today we have a powerful example. Posts here have documented our amnesic, our inability to clearly to see our past. Perhaps the French have the same weakness.

“Happily for the busy lunatics who rule over us, we are permanently the United States of Amnesia. We learn nothing because we remember nothing..”

— Gore Vidal, “The State of the Union,” The Nation, September 13, 2004

Amnesia.

Here is a fascinating report “1938-1944 Munich Agreement in the liberation of Paris or the dawn opinion polls in France“, Frederic Dabi (Director), French Institute of Public Opinion (IFOP), February 2012. It’s 8 pages, in French.  You can translate it; a summary appears below, with a shocking graph from the report.

The teaching of ignorance: what nation most contributed to the defeat of Germany in 1945?, from Les-Crises: des images our comprendre, 4 June 2014 — Posted on Redit, posted in the comments by Kevin. Translated by Google.

A survey conducted in May 1945 by IFOP {French Institute of Public Opinion, founded 1938}, the entire French territory now free (and confirming a survey in September 1944 with Parisians) showed that respondents appear to be well aware of the power relations and the role of allies in the war, despite censorship and the difficulty under occupation to access reliable information.

Thus, a clear majority (57%) consider that the USSR is the nation that has most contributed to the defeat of Germany while the United States and England, yet liberating the country, do not collect 20% respectively and 12%. But what is truly astonishing is that this vision of public opinion has reversed very dramatically with time, as shown by two surveys in 1994 and 2004:

Read more…

The Fate of Israel

28 July 2014

Summary: As Israel has another round of conflict with one of its neighbors, we should neither overlook the toll of causalities nor focus excessively on these details. More important is the long trend. History shows the difficulty of distinguishing strong from weak players in 4GW, and that choosing the wrong grand strategy can be terminal for a state.  It could easily prove fatal for Israel. Events today show how a nation might look strong while on a path leading to bad outcomes. This is a revision of a 2006 post, chapter two in a series of articles about grand strategy when 4GW has become the dominate form of war.

“It is not possible to found a lasting power upon injustice, perjury, and treachery.”
— Demosthenes (Athenian leader, 384 – 322 BC)

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"THE TEN COMMANDMENTS" 1956

Allstar/Cinetext/PARAMOUNT

Contents

  1. Is Israel is stronger than the Palestine?
  2. Winning requires strategy, not just power
  3. Israel abandons the high ground
  4. Comparing the Strategies of Israel & Palestine
  5. Strengths of the Palestinian people
  6. How ight the Palestinian people defeat Israel?
  7. Other predictions of doom for Israel
  8. For more information

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(1) Everyone knows Israel is stronger than the Palestinians. That might be wrong.

To plan a successful grand strategy the strategist must know if he has a weak or strong position. Failure almost certainly results from getting this fundamental wrong. Unfortunately, history shows the difficulty of correctly determining weak from strong during times of rapid change.

“So confident of victory were the French that many sat up late drinking, gambling and boasting about who would kill or capture whom. Some knights even painted a cart in which Henry V would be paraded through the streets of Paris!”
Description of the French camp on 24 October 1415, the night before Agincourt – the last of the 3 great English victories over the French during the Hundred Years War.

“You are now my prisoners. Let this be a lesson to you that Americans are weak. You must realize that Japan will rule the world. You are stupid for letting your leaders take you to war.”
Speech by Tetsunosuke Ariizumi, Commander of His Imperial Majesty’s submarine I-8, addressing captured Americans from the SS Jean Nicolet on 2 July 1944.

“No Viet-Minh cannon will be able to fire three rounds before being destroyed by my artillery.”
— Colonel Charles Piroth, French artillery commander at Dien Bien Phu, quoted in Hell in a Very Small Place, Bernard Fall (1966), p. 102.

Measuring strength between peoples has become even more difficult in our age — when 4GW is the dominant form of war. Hence the endless stream of surprises from the anti-colonial wars after WW2 to our defeats in Iraq and Afghanistan.

So which looks stronger: a stateless people with no modern government, economy, or army – or a developed state with its vast superiority in ideas and hardware? An occupied people or the nations that rules them?

(a)  Israel, a western industrial nation, has rationally educated elites in a modern bureaucratic government. Israel’s army and intelligence service (the Mossad) are superior to their Palestinian counterparts in every way.

(b)  Israel has wielded these advantages to win many tactical victories over the Palestinians. For example, Thomas X. Hammes (Colonel, USMC, retited) describes how Israel won the second Intifadah in chapter 9 of his book, The Sling And The Stone.

(c)  The Palestinian people have none of Israel’s advantages: stateless, politically mobilized in only a primitive manner, with severe internal fractures, and a history of weak and self-interested leadership. Each year their enclaves on the Gaza Strip and the West Bank sink further into poverty and chaos.

Who has the best odds of long-term survival, Israel or the Palestinians?

Read more…

“The Hunger Games: Catching Fire” asks if you want a Revolution

27 July 2014

Summary:  Today we have a guest post by film critic Locke Peterseim, a review of “Catching Fire” that uses it as a mirror to our culture — a reflection showing how we want to see ourselves. It expresses my own view, more clearly and deeply than I could. Including the disorientation I feel when looking out at our world. Share your thoughts about this in the comments.

Catching Fire poster

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The Hunger Games: Catching Fire
You Say You Want a Revolution?

By Locke Peterseim

Posted at the film blog of Open Letters Monthly
10 December 2013

Reposted here with his generous permission

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There are times — and they come at me more frequently these days — when I feel out of step with everything and everyone. Don’t worry, I’m not going to go into full sobbing mental breakdown right here in the first paragraph — I’ll save that for later.

But when I see the movie-going public go ga-ga for a dull, corporate puppet show like The Hunger Games: Catching Fire, I shake my head and wander out of the theater (two and a half hours later, thanks) and into the wild.

You know what’s so great about Catching Fire? It’s tolerably watchable. That’s it. It’s not a good film. It’s not good entertainment.

And contrary to what has now, in less than a month, become Conventional Wisdom, parroted by fans and critics alike, it’s certainly not better than last year’s relatively subtle first Hunger Games movie. Catching Fire is a piece of smoothly assembled and blisteringly marketed product that doesn’t absolutely suck.

(I find myself often saying this about big franchise action movies like Man of Steel, The Wolverine, Thor, and yes even the Twilight films: The studios have their system down pat. Unless the Powers That Be have a momentary lapse of insanity or inebriation and hire some sort of weirdo actual creative artist to make these films, the cinematic outcome — the assembly line McDonalds product — is going to turn out… eh, okay. Tolerable. Watchable. Mostly edible.)

The first Hunger Games movie was helmed by Gary Ross (Pleasantville, Seabiscuit) and, as I wrote last year, I found it surprisingly nuanced and naturalistic. With a little second-unit help from Steven Soderbergh, that first film in the franchise felt like it was breathing, like it cared about its characters. It was a little washed out, a little hand held, and very often it was that most blessed and rare of cinematic things these days: Quiet.

Read more…

We should begin preparing now for the evacuation of Israel

26 July 2014

Summary:  This article by guest author Franz Gayl (Major, USMC, retired) was posted in March 2012, and remains as relevant today. It looks ahead beyond Israel’s current moment in the sun.  They face a divided Arab people and even more fragmented Islamic societies, which they overawe by their massive military strength — exercised in the shadow of the world’s hyperpower.  But these are ephemeral advantages; meanwhile the tides run against Israel.  Invisibly, quietly, decisively.  Deteriorating demographics, increasingly powerful enemies, and a shrinking roster of friends.  For an analysis of Israel’s grand strategy, showing why it might lose, see The Fate of Israel (newly revised).

Contents

  1. Introduction
  2. The Physical Dilemma
  3. Hasty Implementation of a Thoughtful Vision
  4. Debating U.S. Responsibility
  5. Potential Israeli Objections
  6. Thoughts on Peaceful Alternatives
  7. Preparing a U.S. Home
  8. About the author
  9. For More Information

We should begin preparing now for the Evacuation of Israel

By Franz Gayl (Major, USMC, retired)

(1) Introduction (revised July 2014)

The conflict in Gaza is an increasingly lethal indicator that the U.S. must begin to plan for the evacuation of Israel. Our collective inability to prevent barbarism by military and diplomatic means has become obvious. ISIS gains are just a regional prelude. WMD proliferation also continues, and a broadly nuclear-armed Mideast is not unthinkable in coming years. Concurrently, unconstrained non-state enemies of Israel are becoming destructively super-empowered. The exponential progress of multi-purpose advanced technologies is relentless.

As we approach the middle of the 21st Century the most dangerous weapons will find their way into the hands of the least rational enemies of Israel. Some have called this assessment pessimistic, even naïve. But it it is realistic, based on real trends — historical, current, and forward-projected. The writing is on the wall, and we must plan and prepare a U.S. backdoor for the Israeli people to avoid a second Holocaust.

Click here to read the full post.

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The CEO of Boeing enjoys the sight of his workers cowering. It’s our humiliation as well as theirs.

25 July 2014

Summary: We can only guess at our leaders’ plans for the New America they’re building on the ruins of the old. But on rare occasions they speak frankly about how they see us. We should listen. They’re not kidding.

Spirit Of Truth

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Michael Kinsey’s definition of a gaffe “is when a politician tells the truth — some obvious truth he isn’t supposed to say.” As in this from Thursday’s quarterly earnings conference call with Boeing’s senior management:

Bloomberg News:  Jim, you have a birthday coming up next month. … Will you be at your desk, and has the Board approvide you staying on past age 65?

Jim McNerney, CEO: Yes, the heart will still be beating. The employees will still be cowering (laughing). I’ll be working hard; there’s no end in sight. We’re continuing to build the succession plan … But there’s no discussion of it yet. So you’ll still be asking questions of me.

Boeing has worked hard to demoralize its workers (the most recent round early this year). McNerney exults in his success. In this Boeing joins other leaders such as Amazon, Nike, and Walmart in forging a new corporate-worker relationship. It’s natural that their great success creates contempt for their employees.  They’ve weaken or broken their unions. Converted their workers into contingent, low wage, no benefit peons. Among their results: wage as a fraction of America’s gross domestic income from 51.5% in 1970 to 42.6% in 2012. It’s a victory on scale rare in our history.

Read more…

America enjoys a time of sunshine in Hell. Let’s use the time wisely.

23 July 2014

Summary: I try in these pages to convey the extraordinary oddness of our time, when a great nation carelessly destroying its strength and prosperity. Examples are easily found around us. The disregard for science by both Left and Right. Our mad foreign policy, multiplying enemies while discouraging friends. Our high-risk macroeconomic policies. Our apathy to the rot of both our infrastructure and our political regime. The restructuring of our society to build a New America on the ruins of the old. It’s an exciting time, with great trends buried amidst the trivia of the news! Today we try a new perspective from which to see these things more clearly.

Sunshine in Hell

A powerful and evocative phrase about our time by Michael Hartnett (Chief Strategist at BofA). It’s used in a different context than here, borrowed from his report of 29 May 2014

Sunshine

America is powerful, our military supreme, our hegemony almost unchallenged.
We kill at will around the world.
We overthrow governments and occupy nations at our whim, careless of the consequences.
Our tech is the finest.
Our economy is the largest & among the strongest.
Yet increasing numbers of Americans fear we’re on the wrong path (see polls).

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Here’s one story about America today. Scores more, equally disturbing, can be just as easily told.

The vast majority of economists expect the US economy soon to resume “normal” growth, as they have since the crash. That’s quite astonishing since GDP has been slowing, not accelerating, from its post-crash sluggish trend of 2.2% — despite the third and largest round of quantitative easing. In 2012 GDP rose 2.8%; in 2013 +1.9%; and now economists estimate growth in 2014 to be slower than 2013 (the IMF expects +1.7%, assuming the second half speeds up to 3%+). It’s our slowest recovery ever by most metrics, one in which median real wages have not increased since before the recession began in 2007.

However anemic, the recovery has kept the public quiet while a New America is built around us. But we’re not all participating equally.

For example, consider our passive acceptance to the great looting of American business. First Private Equity firms perfected a new mode of capitalism: parasitism. Acquire businesses — hollow them out by throttling back capex and R&D (see this NYT article, the numbers look worse as % profits) — leverage them up — extract the cash — then sell them off. Now senior corporate executives have learned to do the same with public companies. Cut capex and R&D — leverage the company up — then  extract the cash via the Triangle Trade of executive stock options to stock to buybacks. The result is a rapid increase of inequality, a host of executives in the 1%, and an America incapable of rapid growth.

It’s one of the great engines of inequality in our society, along with the increasingly dysfunctional education system and the flat tax system. For more information see the end of this post.

Looking at the 99%

We see the effects of growing inequality all around us, if we care to look. Not just in the conspicuous spending of the nouveau riche, but in the plight of the 99%. As in these stories from today’s news:

Read more…

Tom Clancy, manufacturer of myths that kept us happy & ignorant

22 July 2014

Summary: We loved Tom Clancy’s fiction because it gave a realistic gloss to our myths about ourselves, about America, and about our military and intel agencies. Unfortunately millions of his readers believed they were seeing an accurate picture. In fact Clancy got the details right, but most of the big things totally wrong. Gorbachev was not a wise leader; Prince Charles was not a great family man; Federal agents seldom feel agonies of guilt when killing people in the line of duty. A full listing of Clancy’s distortions would fill a book almost as long as one of Clancy’s. Here one of our top geopolitical experts paints a picture of Tom Clancy, showing how he gained a place on our bookshelves by giving us what we wanted.

Tom Clancy

David Burnett/GP Putnam Sons via Associated Pres

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Tom Clancy, Military Man

By Andrew Bacevich

The Baffler, #24 2014
“The journal that blunts the cutting edge”

Reposted with the generous permission of The Baffler

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Word of Tom Clancy’s passing in October reached me at a local gym. Peddling away on an elliptical trainer, I welcomed the distraction of this “breaking news” story as it swept across a bank of video monitors suspended above the cardio machines. On cable networks and local stations, anchors were soon competing with one another to help viewers grasp the story’s significance. Winning the competition (and perhaps an audition with Fox News) was the young newsreader who solemnly announced that “one of America’s greatest writers” had just died at the relatively early age of sixty-six.

Of course, Tom Clancy qualifies as a great writer in the same sense that Texas senator Ted Cruz qualifies as a great orator. Both satisfy a quantitative definition of eminence. Although political historians are unlikely to rank Cruz alongside Clay, Calhoun, and Webster, his recent twenty-one-hour-long denunciation of Obamacare, delivered before a near-empty Senate chamber, demonstrated a capacity for narcissistic logorrhea rare even by Washington standards.

So too with Clancy. Up in the literary Great Beyond, Faulkner and Hemingway won’t be inviting him for drinks. Yet, as with Ted Cruz, once Clancy got going there was no shutting him up. Following a slow start, the works of fiction and nonfiction that he wrote, cowrote, or attached his moniker to numbered in the dozens. Some seventeen Clancy novels made it to the top of the New York Times bestseller list, starting with his breakthrough thriller The Hunt for Red October. A slew of titles written by others appeared with his imprimatur. Thus, for example, Tom Clancy’s Ghost Recon: Choke Point or Tom Clancy’s Splinter Cell: Blacklist Aftermath.

Read more…

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