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Is this the dawn of a new age? Two journalists see the first step to reforming America.

24 February 2014

Summary: Posts on the FM website almost always provide either bad news or painful recommendations. Today’s post describes one of the few bursts of sunlight through the clouds darkening America. Two journalists have stumbled upon the first step to reforming America. Should they be heard — should we take them seriously — great things might result. The ball rests in your hands Pass it one.

“Liberty means responsibility. That is why most men dread it.”
—George Bernard Shaw, “Man and Superman” (1903)

Eagle on the Flag

Once this was us. It can be again.



  1. When does it become our fault?
  2. We should care. But we don’t, not really.
  3. For More Information

Taking responsibility for America
is the first step to reforming America.

(1)  A good Leftist asks “When does it become our fault?”

Charles Pierce of Esquire asks “When does it become our fault?

… Those people who voted against the UAW in Chattanooga did not do so under actual guns.

Nobody was waiting outside the building to beat them up or burn them in their tents. Hell, the damn company was on their side — or, at least, studiously (and honestly) neutral. And still they could get ginned up in their fear enough not to vote for their own economic self-interest, because they allowed people who they know — or ought to know — would sell their jobs to Vietnam for three cents on the dollar to convince them that the UAW was a threat to their livelihoods. At some point, blaming it all on the conjurings of political consultants isn’t a sufficient answer any more.

When does it become our fault?

I don’t work there. I don’t presume to speak for anyone who does, but what happened in Chattanooga is a nice microcosm of what happens in hundreds of other places, and in dozens of other elections. It’s time to stop using fear and ignorance and apathy as excuses for why things do not change. We do not have the worst Congress in the history of the republic by accident. Nobody smuggled them into the Capitol in the dead of night. We have the worst Congress in the history of the republic because too many Democratic voters were too lazy to stop it, and because too many Republicans believe too much crazy bullshit and, worse for us all, they act on it, which makes the Democratic lassitude even less forgivable.

Read more…

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The new tech bubble takes us to a new world. A mad world.

23 February 2014

Summary: As we enjoy the third bubble in 15 years, watching America’s investment capital burn away, let’s break loose from the crowd and seek a more accurate perspective. However bleak the vision, never ask for the blindfold.




  1. Our odd third bubble
  2. Peter Schiff asks “WhatsApp With That?”
  3. About the author
  4. For More Information


(1)   Our odd non-investment bubble

“Hegel says somewhere that all great historic facts and personages occur twice, so to speak. He forgot to add: ‘Once as tragedy, and again as farce.’”
— Opening line to Karl Marx’s The Eighteenth Brumaire of Louis Bonaparte (1869)

Investment bubbles are an inherent aspect of free market economic systems. They predate central banks, fiat currency and modern fractional reserve banking systems (despite conservative mythology). They leave both losers and the infrastructure they built (e.g., canals, railroads, the Internet).

The two previous bubbles are oddly recent, but otherwise typical. The current one is not. First, three bubbles in 15 years suggest either amnesia drugs in the water or a people with a dysfunctionally-serious inability to learn. Second, despite the claims, this is not a tech bubble. The technology involved is only slightly advanced, the resulting companies mostly unprofitable, and the key products are stock certificates. The massive customer growth results from underpricing (there are always takers when selling dimes for a nickel), the funds come from the venture capital – investment bank – investment management industry. They, and the senior managers of these companies, will keep their profits when the investors’ money vanishes with last year’s snow.

This is half of America’s seed corn. Poured into what are little more than ponzi schemes, whose collapse will leave little behind. (The other half of our seed capital feed our military and intelligence machinery. The resulting flames are pretty, but accomplish little).

Let’s correctly assign responsibility for this. All cons require suckers. Our amnesia makes us perfect for that role in this game.

“You can’t cheat an honest man.”
— W. C. Fields movie (1940)

(2)  A look at the latest chapter in our mad adventures


WhatsApp With That?
By Peter Schiff
From EuroPacific Capital, 22 February 2014
Reposted here under their Creative Commons license

Two pieces of business news announced this week provide a convenient frame through which to view our dysfunctional and distorted economy.

  1. The first (which has attracted tremendous attention), is Facebook’s blockbuster $19 billion acquisition of instant messaging provider WhatsApp.
  2. The second (which few have noticed) is the horrific earnings report issued by Texas-based retail chain Conn’s {see Reuters}.

While these two developments don’t seem to have much in common, together they shed some very unflattering light on where we stand economically.

Read more…

What can we expect from the US economy in 2014?

21 February 2014

Summary: 2013 ended with economists predicting accelerating economic growth in 2014, as they have every years since 2010 (wrongly). Let’s examine the stories, so you can prepare your family and business for the range of likely outcomes.

Crystal Ball


  1. Hope for 3.5% growth, or more!
  2. Bigger hope: what if we get 4%?
  3. White hot hope:  we will get 4%, then again!
  4. An alternative, darker view
  5. The bad news
  6. For More Information

The consensus forecast per Blue Chip Economic Indicators as of February 20 for US GDP: 2.7%  in 2014 and 3% in 2015. But years of over-optimistic forecasts have made economists cautious, so their “whisper numbers” are higher than their official numbers. My guess is that 2014 will be another year of slow (2.2%?) growth. But, as always, surprises await us — good and bad. Now for the stories…

(1)  Hope for 3.5% growth, or more!

Nothing Burns Like the Cold“, Scott Minerd (Global Chief Investment Officer), Guggenheim Partners, 20 February 2014 — Excerpt:

… there has been a litany of weather-related bad news — U.S. industrial production has decreased, mortgage applications have fallen, housing data disappointed, and even restaurants are struggling. The full extent of the weakness may have surprised many, but investors often underestimate the ripple effects of a supply chain interruption. This environment is evocative of Japan’s 2011 earthquake and tsunami, which threw the global supply chain into such disarray that it caused an 11% decline in U.S. auto sales in the middle of that year.

… The good news is that this is likely only transient noise, and that rising temperatures in March and April should revive everything from auto sales to factory activity, helping the U.S. economy return to its improving trend. Pent-up consumer demand should re-accelerate growth in the spring after this short, sharp pain, setting the United States on course for solid growth in 2014 of 3.5% or more.

(2) Bigger hope: what if we get 4%?

“When the economy recovers from the cold”, Hans Mikkelsen (credit strategist), BofA-Merrill, 18 February 2014:  — Excerpt:

Read more…

‘Warring States’ — The Coming New World (Dis)order

20 February 2014

Summary:  Geopolitical understanding comes through seeing the the world through others’ eyes, from other perspectives than our own. Today we have a description of the new world order as seen from China, written by Eric Li (a Chinese venture capitalist).


“Our first objective is to prevent the re-emergence of a new rival, either on the territory of the former Soviet Union or elsewhere, that poses a threat on the order of that posed formerly by the Soviet Union. This is a dominant consideration underlying the new regional defense strategy and requires that we endeavor to prevent any hostile power from dominating a region whose resources would, under consolidated control, be sufficient to generate global power.”

— Draft of the Defense Planning Guidance for the 1994-99 (18 February 1992) written by Undersecretary of Defense for Policy Paul Wolfowitz and his deputy Lewis “Scooter” Libby. The resulting uproar forced a prettier final version that masked the government’s true intentions. See Wikipedia for more comparisons between the honest draft and the pretend-final version.

Shang Yang

Shang Yang, statesman of Qin (390 – 338 BC)



  1. Introduction: about the old global regime
  2. The Ailing Narrative of Dichotomy
  3. The Dragon Reemerges
  4. Levithan vs. Free Rider
  5. Leviathan Retreats, a New Future Opens
  6. About the Author
  7. For More Information


‘Warring States’ — The Coming New World (Dis)order

By Eric Li
Originally published at The Asan Forum, 7 October 2013
Adapted from a lecture given at the Asan Institute for Policy Studies in Seoul.
Reposted here with their generous permission

The Korean Peninsula is the last citadel of a bygone era. Since the end of the Cold War, the United States as the reigning superpower has been the anchor of a global architecture built after World War II and solidified during the post-Cold War period. It is organized around a narrative of dichotomy that has dominated international relations for more than half a century. It is a single fault line narrative and ideology is its cornerstone. A worldwide Western alliance, of which South Korea has been a staunch member from almost day one, led and paid for by the United States, is charged with the mission of maintaining and continuing to expand this global architecture.

This era has gone through two phases. The first was the post-WWII phase during which two universal ideologies were engaged in an existential struggle around the globe: Soviet communism vs. democratic liberalism. Both were modern and both were Western. Furthermore, both were brands of historical determinism in that each claimed the inevitability of a preconceived destination for all mankind. In Soviet communism, class as the fundamental unit that transcended all cultural identities would take the whole world to the communist utopia. On the other side of the coin, democratic liberalism counted on divinely empowered individuals to vote their way to the liberal paradise. Both armed themselves to the teeth and drove their visions from continent to continent. In the end, the Soviet Union collapsed and the American-led West lived — hence the American century.

The second phase was the post-Cold War period. Victory in the Cold War led the West to embrace, in the traditions of Hegel and ironically, Marx, an inexorable linearity to history. The United States would lead the victorious Western alliance to implement the utopia of democratic liberalism to cover every corner of the earth. Electoral democracy and market capitalism were to be the building blocks of a new world order. Six billion rational individuals would all make the right choices in the voting booth and the marketplace and, thereby, eventually unify the world under a single set of political, economic, and even moral rules. In the euphoria of globalization many were led to believe that national sovereignty was passé and universality was within reach. Here, the single fault line is between the democratizers and market openers on one side and those who resist conversion or are yet to be converted on the other. Three approaches have been pursued against the latter: direct military containment or invasion (North Korea and Iraq), fostering color revolutions (former Soviet republics and the Middle East), and peaceful evolution (China).

Read more…

Climate scientists speak to us. What is their consensus opinion?

19 February 2014

Summary: Senator Kerry kicked off the Obama administration’s campaign for policy action to fight climate change. He referred to the oft-cited 97% consensus of scientists. Since it is the basis for large and expensive policy proposals, we should know exactly what is the consensus. Here we look at the studies producing that widely cited number.

The Consensus Project

The second line is false, “a” cause not “the” cause.


Secretary of State Kerry provides a clear example what is by now a standard play by US leaders: attempting to spark public action by exaggerating  a threat.  In this case, global warming and the resulting climate change. He gave a common but inaccurate description of the current state of climate science — exaggerating the certainty of scientists ab0ut the imminence and magnitude of the threat.

Here we compare Kerry’s words with the actual research showing the consensus. They do not match closely. The graphic at the right shows an example. Global warming is happening, but these surveys do not show agreement that “we are the cause” (rather, we are “a” cause).

However, Kerry’s misrepresentations probably will not matter. Generations of such propaganda have left the American public apathetic, our spiritual adrenal glands exhausted from over-stimulus. Only a generation or so of cold unvarnished truth can restore our ability to adequately see and assess threats. Restoring confidence in the honesty of our leaders will take longer.

“Mr. President, if that’s what you want there is only one way to get it.  That is to make a personal appearance before Congress and scare the hell out of the country.”

— Senator Arthur Vandenberg’s advice to Truman about starting the Cold War.  On 12 March 1947 Truman did so.  From Put yourself in Marshall’s place, James P. Warburg (1948); in 1941 Warburg helped develop our wartime propaganda programs.

Time: Global Warming

A slight exaggeration by Time, 9 April 2001


Remarks on Climate Change
by Secretary of State John Kerry
Jakarta, Indonesia 16 February 2014


So when thousands of the world’s leading scientists and five reports over a long period of time with thousands of scientists contributing to those reports – when they tell us over and over again that our climate is changing, that it is happening faster than they ever predicted, ever in recorded history, and when they tell us that we humans are the significant cause, let me tell you something: We need to listen.

When 97% of scientists agree on anything, we need to listen, and we need to respond.

  1. These scientists agree on the causes of these changes and they agree on the potential effects.
  2. They agree that the emission of greenhouse gases like carbon dioxide contributes heavily to climate change.
  3. And they agree that, if we continue to go down the same path that we are going down today, the world as we know it will change – and it will change dramatically for the worse.

There is no basis for much of this, as Kerry grossly exaggerates the extent of the consensus among climate scientists. Most of these assertions appear in the IPCC’s reports, but with widely varying confidence levels.  Stating these as certainties converts them from conclusions of scientific research into Leftist propaganda, made truth in their followers’ minds through endless repetition.

Let’s look at one claim, in a sense the foundation for the speech. What is the basis for the 97% number Kerry cites?

First, a reminder of the actual consensus of climate scientists. The surveys shown below show strong agreement with this key statement by the IPCC; none show agreement beyond it.

Read more…

Tom Perkins tells us about the 1%’s vision of a New America

18 February 2014

Summary: Every day the New America grows on the ruins of the America-that-once-was. Every day our apathy weakens the Republic. Every day powerful people — each wielding wealth greater than millions or tens of millions of other Americans — add new brinks to the new plutocracy that will govern our children and their children. They’re doing so openly. To minimize our fear and guilt we laugh at them. They smile at our folly; the Founders cry silently.

The oligarchy club



  1. Telling us about the coming New America
  2. Tax rates on the wealthy at post-1930s lows. They’re not grateful…
  3. America’s exceptional inequality
  4. For More Information


(1)  Telling us about the New America

Tom Perkins’ big idea: The rich should get more votes“, CNN, 14 February 2014 — Tom Perkins speaking at the Commonwealth Club in San Francisco. Everybody has words to live by, that justify their actions. Perkins shared his with us. He’s not joking, and their increasing power brings his vision closer to fruition every day, as the 1%’s command of all levels, all parts of the governing mechanism means that our votes have less effect than his dollars.

Listen, and be afraid. Unless we develop backbones and cohesion, Perkins vision will come true.  One way or another.



Tax rates on the wealthy are at post-1930s lows. They’re not grateful…

Read more…

How America can survive – even prosper – in the 21st century

17 February 2014

Summary: This is one chapter a series about America’s grand strategy, ways America can survive – even prosper – in an age of new rivals, where 4th generation warfare (4GW) is the dominant mode of war. Ideas that have worked in the past might guarantee failure today. See links at the end for the full series to date. This is a revised version of a post from 14 June 2008. It’s still useful, since our geopolitical strategy has not changed since then.

World in the palm of my hand

Madness. We do not hold the wold in our hand.



  1. Can we do a grand strategy?
  2. The baggage in our minds
  3. Simple recommendations
  4. More friends; fewer enemies. Strengthen friendships; weaken enemies
  5. Don’t gamble. Adopt slow but sure tactics.
  6. Survive until we win.
  7. For more information

(1)  Can we do a grand strategy?

Perhaps American cannot successfully implement large and complex geopolitical strategies, as discussed in “The Myth of Grand Strategy.” Perhaps this is weakness inherent to democracies. Athens also had difficulty executing complex long-term plans, even in the face of catastrophic defeat.

Read more…

How much did we warm in January?

16 February 2014

Summary:  As the pause in the warming of the world’s surface temperature enters its 15th year (or 17th), activists hide this by focusing on areas of the world with record warm weather (areas with cold weather are un-news). We need not fall for this propaganda. NASA funds a monthly report of global temperature measured by satellites — a consistently high-quality data set going back to 1979 (roughly the end of the previous mini-cooling cycle). Also see the sections putting this in a vital long-term context.  The truth is out there for people willing to see it.

“It is extremely likely (95 – 100% certain) that human activities caused more than half of the observed increase in global mean surface temperature from 1951 to 2010.”
— conclusion of the IPCC’s AR5 Working Group I

Pure alarmist propaganda

Pure alarmist propaganda



  1. Status report: what do satellites tell us about global warming?
  2. The UK Met Office shows the long-term history of warming
  3. Who produces this satellite data & analysis?
  4. About The Elusive Absolute Surface Air Temperature (SAT)
  5. A few key things to remember about global warming!
  6. For More Information

To the right is a typical over-the-top image to arouse fear, about a world now less than one °F warmer than the 30-year average.

(1) Status report: what do satellites tell us about global warming in January 2014?

Satellites provide the most comprehensive and reliable record of the atmosphere’s warming since 1979.

The January 2014 Global Temperature Report
by the Earth System Science Center of the University of Alabama in Huntsville
(Blue is cold; red warm}. Click to enlarge.

UAH Global Temperature Report: January 2014

Earth System Science Center of the University of Alabama in Huntsville


See the equivalent graph from the surface temperature stations of the Climate Anomaly Monitoring System (CAMS) of the Climate Prediction Center (CPC) at the U.S. National Centers for Environmental Prediction (NCEP).

Key points from the UAH report (prepared under contract for NASA), which show a world that has warmed since 1979, but only slightly (few alarmists know this; fewer admit it):

  • Global composite temperature in January: +0.29°C (0.52°F) above the average for January during 1981-2010.
  • Global climate trend of temperature starting in 16 November 1978: +0.14°C (0.3°F) per decade.
  • Compared to seasonal norms, in January the coolest area on the globe was in upper peninsula of Michigan near Iron River, where temperatures in the troposphere were about 3.9°C (7.0°F) cooler than seasonal norms.
  • The warmest area was in northeastern Greenland by the Arctic Ocean, where tropospheric temperatures were 6.2°C (almost 11.2°F) warmer than seasonal norms.
  • Anomalies are computed per the World Meteorological Organization (WMO) recommended method, comparing the current temperatures vs. a 30 year base period ending with the latest decade.

For more detail see Global Temperature Update Through 2013, James Hansen, Makiko Sato and Reto Ruedy, 21 January 2014.

(2)  The vital context: a longer-term temperature history

(a)  A graph by Roy Spencer, principal scientists on the UAH team (at his website) shows the full record of satellite data (started in 1979). Two decades of cool weather, followed by 15 years of warm weather. Wide swings in temperature; a relatively flat trend since 1998 – 2000. For more about the pause see links to climate research in Section 5.

Read more…

Seeing the world through conservative eyes

15 February 2014

Summary:  Propaganda is an ancient tool of government. Its perfection during the world wars created a new world. Today’s political polarization results in part from a population whose extremes literally see different worlds.  Epistemic closure, carefully limiting ones vision to see only confirmatory information, rules many people’s minds and makes communication difficult (or impossible). After our long series looking at the world through the Left’s eyes (apocalypse real soon), today we see how it works on the Right.

Obama as Mao


What do right-wing people read? Even ignoring the usually ludicrously false email strings, many conservative’s information diet consists to a frightening extent of paranoia and delusion. It’s a vision in which America is constantly under attack, at risk of defeat, with enemies everywhere. We never attack (except in self-defense), always with pure motives. Belligerence is the only good response.

Such people see a manichean world, in which seldom can be found a trace of grey — or uncertainty.

Here are selections from one week of Milinet, a free daily email.  Note the prevalence of far-right sources, more op-eds than news. Imagine the effect of reading little but such material, day after day. Step by step, inch by inch, away from reality towards a world of interlocking delusions.


Quite mad:  “Special report: The cyberwar threat from North Korea“, Fox News, 14 February 2014

Excellent agitprop: “Expert: Iran ships a dry run for later nuclear/EMP attack; humiliate Obama“, The Washington Examiner, 14 February 2014 — The “expert” is Peter Pry, long-time alarmist about EMP; expert at fantasizing about EMP threats. What is the threat to Iran of the US carriers stationed off its shores?

Best agiprop of the week: “Four al Qaeda Groups Gunning for the United States“, David Francis, The Fiscal Times, 13 February 2014 — The groups mentioned here are insurgencies in Africa, purely local. None show any interest in “gunning for the United States”. The article does not even attempt to show that US national interests are at stake. However it does show that we’re using US military power to attack them. If they were to attach us as we have them, we’d scream “terrorism”.

Read more…

This week’s Mailbag: great letters to the Editor (and replies).

15 February 2014

Here are last week’s comments.  They are excellent! My thanks to everyone who sent these.

Letters To The Editor

Send in your comments! Use the contact form, or email to Editor at (note the spam-protected format). Those of general interest will be posted (anonymously on requested) in the weekly mailbag posts.

Why no comments on posted to the FM website? It’s the same reason others have no comments. Click here to learn more.


(1) From H___

The point of view here is that the US is taking a bad turn in a historical / political (and economic) sense. What historical cases stand out as exemplars for “almost-happened” wrong turns? I suppose a growing class division and loss of effective democracy are identifying characteristics. Could you give a short list of peaceful “cultural revolutions” (OK, poor choice of phrase)?

Reply from the Editor:

That’s a fascinating point, and one I’ve long thought provides a useful and optimistic perspective on our problems.

Most peoples’ history, even successful ones, consist of alternating good an ad periods (also, marriages are also like this). The US is one of the most successful nations in our world. We have two hundred years of economic success, social progress, all under the same political regime.

Yet we have had some dark periods. The civil war, of course. The post-civil war era was one of a failed reconstruction (the South’s successful counter-revolution), oppression of labor, and frequent recessions and depressions (no food stamps and unemployment insurance). Ditto in the 20th century, albeit not on the same scale.

Ditto for England.

(2)  From Michael Pugh

I have never commented on your website (although I have thought to do so many times) because I feared that that would be putting myself on some governmental list for daring to talk openly about the things that you post about. I realise now that no matter what I do, I’m on those lists anyway, as is everybody with a phone, internet ready computer or voting registration entry in at least the UK and US, if the media reports that we have heard and read (mostly not through mainstream media it must be said) are to be believed.

I felt it time though to write to you, privately, as your frustration is earnest and palpable and I felt that I should at least say this.

Read more…


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