Why is the Fed Talking up the Economy? The Answer Reveals Much.

Summary: What will the Fed do during the next few months? They try to clearly communicate their plans, so we need only listen. Unfortunately we have to read between the lines to see their thinking. Such as we see with this speech by Dennis Lockhart (President of the Atlanta Fed): “Assessing Economic Conditions for Liftoff“, in which he shares his analysis of the US economy. Here’s a comparison of what he says and reality. The reason for the difference reveals much not just about the economy, but about how the Fed and the US government relates to we the people.  {This is the first of two posts today.}

See my analysis at Wolf Street. I think you’ll find it time well spent.

Economics

Let’s learn what happened in Afghanistan, so we can do better in phase 2 of our Long War

Summary: Today’s must-read is a retrospective on NATO’s expedition to Afghanistan, even more important today as we begin the second phase of our Long War. It opens with a shocker and gets even better. The reviewer has deep in experience in Afghanistan; the author has even deeper experience. The combination provides powerful insights while cutting through the accumulated lies of the past 14 years. Yet their clear sight of the need for action blinds them to the simple fact that foreign armies almost never defeat foreign insurgencies. How much blood must be spilled in vain before we see this?

Afghanistan war

Afghanistan: ‘A Shocking Indictment’” by Rory Stewart

 

Review of No Good Men Among the Living:
America, the Taliban, and the War through Afghan Eyes
by Anand Gopal

Ashraf Ghani, who has just become the president of Afghanistan, once drafted a document for {his predecessor} Hamid Karzai that began:

There is a consensus in Afghan society: violence…must end. National reconciliation and respect for fundamental human rights will form the path to lasting peace and stability across the country. The people’s aspirations must be represented in an accountable, broad-based, gender-sensitive, multi-ethnic, representative government that delivers daily value.

That was 12 years ago. No one speaks like that now — not even the new president. The best case now is presented as political accommodation with the Taliban, the worst as civil war.

Western policymakers still argue, however, that something has been achieved: counterterrorist operations succeeded in destroying al-Qaeda in Afghanistan, there has been progress in health care and education, and even Afghan government has its strengths at the most local level. This is not much, given that the US-led coalition spent $1 trillion and deployed one million soldiers and civilians over 13 years. But it is better than nothing; and it is tempting to think that everything has now been said: after all, such conclusions are now reflected in thousands of studies by aid agencies, multilateral organizations, foreign ministries, intelligence agencies, universities, and departments of defense.

But Anand Gopal’s  shows that everything has not been said. His new and shocking indictment demonstrates that the failures of the intervention were worse than even the most cynical believed. Gopal, a Wall Street Journal and Christian Science Monitor reporter, investigates, for example, a US counterterrorist operation in January 2002. US Central Command in Tampa, Florida, had identified two sites as likely “al-Qaeda compounds.” It sent in a Special Forces team by helicopter; the commander, Master Sergeant Anthony Pryor, was attacked by an unknown assailant, broke his neck as they fought and then killed him with his pistol; he used his weapon to shoot further adversaries, seized prisoners, and flew out again, like a Hollywood hero.

As Gopal explains, however, the American team did not attack al-Qaeda or even the Taliban. They attacked the offices of 2 district governors, both of whom were opponents of the Taliban. They shot the guards, handcuffed one district governor in his bed and executed him, scooped up twenty-six prisoners, sent in AC-130 gunships to blow up most of what remained, and left a calling card behind in the wreckage saying “Have a nice day. From Damage, Inc.”

Weeks later, having tortured the prisoners, they released them with apologies. It turned out in this case, as in hundreds of others, that an Afghan “ally” had falsely informed the US that his rivals were Taliban in order to have them eliminated. In Gopal’s words:

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Good news: we begin to see that we are sliding towards fascism

Summary: Slowly we have begun to move into the problem recognition phase of our struggle to resist fascism, as people begin to speak out. But that means nothing unless we act on what we see. Will this darkening future spur Americans to become politically active again?

Fight fascism!

One of America’s major problems, subject of many scores of posts here, is our clouded vision of the world — especially our slow ability to see things. Our slow recognition of the major elements of the climate change policy, after 27 years only now coming into focus (e.g., the source of most nightmarish forecasts). Our inability after 14 years of war to see what’s happening (see these stories from Afghanistan). And perhaps most seriously, the death of the Constitution and the rise of fascism in America.

The last of these has been visible for years. Donald Trump did not just happen. For example, there is the long slow loss of confidence in our institutions — except for the police and military. There is the growth of our military and the permanent war (built largely on lies), our national security agencies (the Deep State) and the erosion of civil liberties. There is the slowly growing islamophobia. Perhaps most significant of all, is the growing role of fear in our political discourse; it has become the major means by which our elites gain our attention.

Note that many of these trends are bipartisan.

The good news is that now it has become apparent to many of us. Here are a few recent examples of people who have realized that it can happen here.

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The good news undercutting most forecasts of a climate disaster

One of the four scenarios of our future given in the IPCC’s AR5 (2013) is the basis for almost all the disturbing and often apocalyptic forecasts of future climate: RCP8.5. Climate scientists often describe it as the “business as usual scenario”. Scientists, activists, and journalists use horrific forecasts based on RCP8.5 as a core argument for massive public policy action.

Here is an important fact seldom mentioned: RCP8.5 is an unlikely scenario, assuming large changes in long-standing trends of population growth and technology evolution. It cannot be accurately represented as a “business as usual” scenario.

This insight undercuts a large body of the peer-reviewed studies since AR5, and a larger fraction of the scary stories in the general media.

I revised my original post about RCP8.5. You can see the new shorter and clearer version at Climate Etc, the website of eminent climate scientist Judith Curry — where it has sparked a lively discussion (already 125 comments).

Go to Climate Etc and see for yourself.

Cooking the world

 

COP21 has ended. Here’s why it was a milestone in the history of climate policy.

Summary: Here’s an after-action review of the United Nations Climate Change Conference (COP21) in Paris. Historic or forgettable? It was both, in different ways. {First of two posts today.}

COP21 Logo

World leaders agree to historic climate accord
By Timothy Cama at The Hill, 12 December 2015

World leaders Saturday adopted an historic international climate accord in Paris, the first-ever agreement to commit almost every country to fight climate change.

The 31-page pact does not have binding language or a mechanism to force countries to live up to the promises to cut greenhouse gases emissions or provide money for developing and poor nations to cope with the effects of global warming.

Nonetheless, leaders and the environmental community hailed the United Nations agreement has a historic turning point that has the potential to stave off the worst expected effects of global warming. Adoption of the accord is a major win for President Obama. He has made it a central piece of his second-term climate agenda to get an international agreement, since domestic action can only make a small dent in the world’s greenhouse gases.

COP21 produced an agreement, therefore it is a “win” for Obama — at least by his standards (according to The Hill). I doubt future historians will judge this accomplishment so generously, probably deeming it neither as “historic” nor a “win for Obama.” More likely it will be like its predecessors, lost in the dustbin of history.

This conference has followed the pattern of previous climate conferences. They are preceded by announcements that this is the last chance to prevent climate doom. Here are examples from the 2009 Copenhagen Conference; here is a larger set of examples from the past decade.

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Stratfor: Terrorism doesn’t ‘just happen’. Here’s how it develops.

Summary: With hysteria building in the West about terrorism, Stratfor provides an analytical look at the origins of terrorism — an understanding essential if we are to prevent it from spreading. This discussion will not, of course, affect the public debate which is driven mostly by fiction and fear.

Stratfor

How Terrorist Trends Develop

By Scott Stewart, Stratfor, 27 November 2015

Summary

Developments in terrorism are driven by numerous factors. Some drivers, such as ideology and politics, are inherent to terrorism. However, there are other elements to consider, such as technology and counterterrorism tactics, which force terrorists to adapt their techniques to stay one step ahead of the authorities.

Analysis

During the past two weeks, I have had the opportunity to speak to audiences in Ottawa, Canada and Washington, D.C., about developments in terrorism that will affect the security of governments, companies and nongovernmental organizations in the next few years. Some of those trends, such as the competition between the Islamic State and al Qaeda, the emergence of true cyberterrorism, the progression of the grassroots threat from lone assailants to larger cells and the advent of the “online university of terrorism” will undoubtedly be familiar themes to Stratfor readers, as I have used my writing over the past few months to help flesh out my thinking in this area.

But what I’d like to do here is give readers a bit of an inside look at the factors I am thinking about when I forecast terrorist trends.

One of the most obvious drivers of terrorism is ideology. Terrorism is always ideologically driven, and ideological developments can have a dramatic impact not only on the decision to employ terrorism but also on the types of attacks conducted and the types of targets selected. For example, the emergence of the Islamic State’s strain of jihadism in Yemen over the past year has led to a number of mosque bombings — attacks that al Qaeda in the Arabian Peninsula would not conduct under its operational guidelines. In Nigeria, the leaders of the Islamic State’s Wilayat al Sudan al Gharbi, the group formerly known as Boko Haram, have decided that it is permissible to use women and girls in suicide bombing attacks, and they have used over 50 female suicide bombers in 2015 alone. Ideology is also at the heart of the competition between al Qaeda and the Islamic State as the two rivals struggle to become the religious pole of the global jihadist movement.

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Two scary graphs about the rise of Donald. Fear fascism. Act now.

Summary: Here are two of the most important graphs about America today. They show the rise of Donald. Our experts assure us, as they have since July when Trump began his meteoric rise from 6% to 30%, that he is a flash in the pan — soon to implode. Perhaps he will. But Trump has revealed dark aspects of America, and changed the Republican Party in ways not likely to fade soon.

The GOP candidates (Donald is blue)

GOP Presidential Polls, as of 10 December 2015

(1) The Rise of Donald

After 3 months of fierce attacks on the Donald by the Great and Good of America — by both parties, journalists, political gurus, and academics — the net effect on his support is nil.  Worse, in match-up polls of Trump (red) vs. Clinton (blue), during the past three months he has remained only one to five  percentage points behind her — well able to win if he gets a break or two (e.g., recession, a large terrorist attack on America, a new Clinton scandal).

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