Summary: The news media usually report accurately, more or less. Often they prefer to act as stenographers for governments and corporations. Sometimes the logical thread linking events — the narrative — is obscure, hidden in the noise. Today we look at three examples of hidden history.
The world is not always as we’re told it is. Here are three of today’s major stories, where the true narrative remains hidden — and we attempt to guess at the truth.
- The recovery in America
- The war against Iran
- Germany fighting to preserve the eurozone
(1) The recovery in America
- Public debt outstanding as of 31 December 2010: $ 9,390,476,088,043
- Public debt outstanding as of 31 December 2012: $10,447,662,851,807
- Cost of the recovery: $1,057 billion.
- The increase in GDP bought by that fiscal stimulus: $561.2 billion
That does not mean the stimulus was wasted. Imagine the recession that a balanced budget would have produced. It does mean that cheering about a recovery is delusional; describing this as a “sustainable recovery” is doubly so.
Note: the public debt does not include treasury bonds bought by the social security trust funds, which are loans from the US government to the US government.
For more about this see About the January jobs report – mildly good news, but bought at great cost.
(2) The war against Iran
We can only guess at the plans of government leaders. That’s understandable operational secrecy, not a conspiracy. So what plan drives the intense propaganda drive demonizing Iran? If Israel plans to attack, they’ve forfeited any hope of surprise. Logic and history are our only guides.
One explanation: if Iran does not abandon its atomic program, Israel plans to attack. They lack the ability to inflict crippling damage, but hope that Iran will retaliate — and that this provides a pretext for a devastating US attack on Iran. We’ve destroyed Iraq’s military. Destroying Iran’s military infrastructure leaves Israel and the US as the dominant military powers in the Middle East. Israel could continue to expand into the East West Bank without fear.
Update: “US officials believe Iran sanctions will fail, making military action likely“, The Guardian, 17 February 2012:
- Growing view that strike, by Israel or US, will happen
- ‘Sweet spot’ for Israeli action identified as September-October
For more about these events see the FM Reference Page Iran – will the US or Israel attack Iran? Of special relevance is yesterday’s post Israel leads America on a march to war. A march to folly.
(3) Germany fighting to preserve the eurozone
Germany has benefited greatly from the eurozone. The eurozone boosted German exports not just to southern europe but the world — avoiding the strong currency which hobbles Switzerland and Japan. So it’s commonly assumed that German’s leaders’ sincerely wish to stabilize Greece so that it remains in the Eurozone, and that their erratic demands and insults to Greece reflect mistrust and the need to conciliate skeptics among the German public.
There is an another explanation. They may believe the many experts whose analysis show that Greece cannot be saved within the confines of the eurozone. Too much debt, austerity depressing its economy, depression destabilizing its political and social structures. Only default and currency depreciation can allow economic depression to restore a new equilibrium.
Why then the playacting? It’s not enough for a politician to have the right answer. Western audiences demand a morality play. Greece must leave the eurozone, so that the consequences are their fault. Hence the every increasingly demands, the Greek economy put on the rack.
Update: “Germany drawing up plans for Greece to leave the euro“, The Telegraph, 18 February 2012 — “Plans for Greece to default, potentially leaving the euro, have been drafted in Germany as the European Union begins to face up to the fact that Greek debt is spiralling out of control – with or without a second bailout.”
For more about this great saga see the posts tagged Europe.
You claim a recovery is underway. Please explain what you mean by recovery. When I look at the percentage of people working vs those of working age, its at 30 year lows. What we are in is some sort of mass strike or mass lockout. My info source is the graph at the Federal Reserve web page: Civilian Participation Rate.
Hey Marvin, that’s an interesting graph you found there. Very thought provoking, I think.
Marvin,
If you check FM’s post on January employment, you’ll see that the unemployment rate has dropped from the previous year. I don’t have the figures handy but I recall that hourly earnings and the number of hours worked per week have also grown. Taken in aggregate, it is a fair statement that the country is overall slightly better off than it was a year ago.
But I don’t think even the most enthusiastic bull would argue that the economy is doing very well, they would just emphasize that it is better than it was a year ago. I guess you could define that as a recovery. You could make the same statements about the middle years of the Great Depression.
There is no one measure of performance of a national economy. To name a few:
All are, broadly speaking, better than they were a year ago. So its a recovery, although induced and supported by extraordinary monetary policy (ie, the Fed’s near-zero interest rate policy) and fiscal policy (Federal deficits of almost 8% of GDP).
BTW — the civilan participation rate is an especially poor choice as a single measure of the US economy, since it results from changes in both economic and non-economic factors. Two of the latter:
This number is a proportion – those that are working vs those that could be working. People that are on social security, disability, or otherwise retired are not in the denominator.
We have a massive underemployment in the potential workforce increasing month by month. I find your hint that increasing number of retirees or women leaving the workforce is the explanation for the steep drop very unsatisfying. Far more likely it reflects increasing regulation, credit availability, and other barriers to entry of establishing a new business.
This comment is about looking at the world as it is, not how we would like it to be.
You are totally missing the point. Please read my comment more closely. Then, for a better understanding of the changing US employment picture, the post about employment. It gives a detailed description.
The “one chart shall rule them all” perspective is silly. Employment is a complex dynamic, and your aggressive guessing based on one series is a waste of time.
FabMax,
What outcome are you visualizing? The narrative vs documents premise is fascinating & valuable to any organized system. Yet you didn’t wrap anything up to useful conclusions, only more data absent context, and hence relevance.
1) Public debt outstanding?
a) please define “public debt”, in detail, in context;
b) what does “debt” even mean to a fiat currency issuer?
c) does “debt” in this context share the same semantic meaning we assume?
d) why or why not?
2) war against Iran?
a) yes, operational secrecy is evident;
b) nevertheless, even the presumptively defined “operation” is missing
(we’re told Iran shouldn’t have nuclear power; why? flimsily discussed)
c) assuming it shouldn’t; options are endless; why aren’t we exploring more of them?
give us JUST ONE option far more inspiring, that the USA can get excited about!
(hell, if we wanted, we could easily buy all of Iran, tomorrow;
it’d be cheaper than bombing them;
offer visas to any Iranian willing to emigrate to the USA;
that worked on the Soviet Union; would Iran put up walls to prevent people leaving?)
d) bigger issue is whether our electorate trusts the competency of it’s leaders;
(No, and it’s degrading. That’s the dangerous narrative behind all policy evaluation. All that ever matters is the kinetics & expected time window, which is always a guess.)
3) Germany fighting to preserve the eurozone
a) Yes, the many conflicting stories are sowing confusion.
b) If there’s confusion, IS there really a goal, or only floundering?
c) Regardless of internal competition, there are broader reasons to keep or not keep a state within a budding union. Does the EEU really want to jettison a state, or just “conquer” it?
d) If keeping, not keeping, conquering or not conquering a member state aren’t being discussed, we’re back to the same questions.
i) is there a coherent plan, or just floundering?
ii) are our (Germany’s/Europe’s) “leaders” competent, or not?
Since all aspects of a narrative vs document discussion eventually come back to those last, two questions, then let’s just get straight to the point.
If leaders are trusted, then electorates demand action. “Show us results.”
If leaders are not trusted, then electorates start the process of “reconsidering,” the kinetics of which depend on a host of context details. The mandate of “leaders” is to serve well enough to not force that electoral “reconsidering” above dynamic tolerance limits.
You can go all the way back to Pericles, and further, and review the pitfalls of staff in an organization who maintains or loses trust in that staff. That’s the core value of maintaining adequate coherence across both narrative & documents. If the two get too incoherent, it’s downhill. If they stay within dynamic tolerance limits, we’re either treading water or making progress.
Surely Fabius Maximus, if anyone, can draw on history enough to bypass trivialities like GDP/NIPA/employment-ratios, etc, and adequately define a N/D Index, helping any organization better track whether leaders are still adequately leading the organization that hired them.
The dimensions for measuring Narrative and Documents differ, but discovering relevant mappings between those two is exactly what evolving/adapting systems do. Let’s try inventing one.
Here’s one option to explore.
In system or network models, there is alway “message passing” between system components.
The group intelligence of any system is always help in the body of messages being shared, not in the generating components.
Overlooking many local question for the time being, just focus on one question, defined this way:
a) Documents = messages passed between local or nearby components.
b) Narrative = messages passed far and wide, across most or all components.
That always occurs, because data is always irrelevant w/o context, so most local data isn’t widely propagated. Those data or documents that are passed on through many filters constitute acceptable narrative.
Given this semantic definition, if there is adequate alignment between Narrative and Documents, then there is Coherence across the organization. If not, there’s disorganization, and tremendous lost opportunity.
As Walter Shewhart famously observed: “In all complex systems, the highest cost, by far, is the cost of coordination.” (i.e., the cost of achieving coherence between Narrative & distributed documents)
Immediate corollary is that “In all complex systems, the highest return, by far, is the return-on-coordination.”
Ergo, our task is always simple. Tune local/systemic message passing by SELECTING coherent mappings between documents, so that a coherent, group-wide Narrative emerges.
Process engineers & logicians & biologists recognize this as “tuning,” coherence and adaptation. How quickly we select coherent logic from all our stories defines our cultural adaptive rate.
If we’re NOT focused, above all else, on selecting Narratives tuned from all available local documents, then even Clausewitz would say we’re expending time & resources in maladaptive endeavors.
I feel that many of our grandparents would simply say “this has to all add up.” Your note that Narrative & Documents aren’t adding up says we’re in trouble, and wasting time – exactly when simple focus on coherence would make our nation wealthy beyond what any current individual can currently imagine.
These are unreasonable questions to ask in comments. All are easily answered with a little time on Google.
What can you mean by posting this kind of comment? It’s way to long, asking questions which would require thousands of words to answer.
This is why we have a comment policy, most especially asking that comments be brief.
> These are unreasonable questions to ask in comments.
> All are easily answered with a little time on Google.
Because without asking & answering those questions beforehand, your original post makes no sense whatsoever. Just trying to politely point that out.
Please briefly explain why it makes no sense. I was unable see any theme or particular message in your comments.
“US officials believe Iran sanctions will fail, making military action likely“, The Guardian, 17 February 2012:
“Germany drawing up plans for Greece to leave the euro“, The Telegraph, 18 February 2012 — “Plans for Greece to default, potentially leaving the euro, have been drafted in Germany as the European Union begins to face up to the fact that Greek debt is spiralling out of control — with or without a second bailout.”
2) “Israel could continue to expand into the East Bank without fear.”
Dept of: huh? East bank is Jordan. Was that just a disinhibited throwaway, or seriously meant as a presumed Israeli motivation?
3) “Greece must leave the eurozone, so that the consequences are their fault. Hence the every increasingly demands, the Greek economy put on the rack”
Another explanation is that through the actions of the ECB, the largest financial institutions most at risk from a Greek default and exit are at last safe (especially those which issued CDSs) – so it doesn’t matter any more to Germany and others who allegedly were fighting to keep Greece in, but were in fact jusr engaging in delaying tactics
(1) “
EastWest bank”Dyslexia strikes again! Fixed. Thank you for pointing this out!
(2) Eurozone
Your point about the northern European banks is complementary to my point. They could not force Greece out until the resulting damage was “ringfenced”. The ECB programs, esp the LTRO, may have accomplished this. Now they could kick Greece out, but that would be problematic for many reasons. Hence what appears to be a two-faced program: appear to extend aid, but on increasingly severe terms so that Greece eventually leaves. Appearances matter in geopolitics.
“Restructuring Greece Within the Euro is Illusory“, Der Spiegel, 20 February 2012 — Opening:
“Can a return to the drachma save Greece as unemployment soars?“, Ambrose Evans-Pritchard (Business Editor), The Telegraph, 19 February 2012 — Opening:
“Experts Say Iran Attack Is Irrational, Yet Hawks Are Winning the Debate“, Peter Beinart (assoc prof of journalism and political science at City U of NY), The Daily Beast, 21 February 2012 — Excerpt:
http://www.youtube.com/watch?v=9ds31_TxUqM
…I’m at a loss for words. SMH.