Craig Pirrong's Blog, page 43

What To Do With With Erdo?

Turkish President Recep Tayyip Erdoğan seems hell-bent on making enemies. Indeed, other than Qatar, it’s hard to point to any nation that is allied with Turkey. Turkey doesn’t even seem to have frenemies, only real enemies.

The FT had a long piece detailing how Erdoğan is using force and threats of force to prevent other nations, notably Cyprus, from drilling for gas in the eastern Mediterranean. He has also entered into a deal for what passes for a government in Libya to develop its offshore gas, and to build pipelines that deny that Crete is part of Greece. (Hey, it was Ottoman once, right?)

Speaking of Libya, Erdo has intervened in the conflict there. Turkey has supplied advisors, drones (including armed UAVs), anti-air defenses, and electronic warfare systems to support the “government.” Further, Turkey haas shipped in thousands of Syrian jihadi-types to provide the ground forces to fight against the force led by warlord Khalifa Haftar, who is trying to overthrow the UN-recognized government.

This has led to a confrontation between French and Turkish ships off the Libyan coast. Turkey has demanded an apology, and Macron trumpeted a call with Trump during which Libya was discussed–a clear indication to Turkey that the US was leaning towards France and against Turkey.

To make things even more complicated, Egypt supports Haftar and is threatening to intervene with its ground forces to combat the Turkish-supported troops. Turkey has made stern warnings to Egypt to stay on its side of the border.

To make things even more complicated, Russia is Haftar’s biggest backer. Russian mercenaries operate there. So in Libya Erdoğan is risking conflict with Russia, France (and hence the rest of the EU–yeah, I know), and Egypt.

The correlation of forces here is definitely not in Turkey’s favor, especially if Egypt intervenes on the ground. Egypt shares a border with Libya, and as the Desert Campaigns of 1940-41 showed, an armored force can race across Libya and achieve operational dominance. Egypt’s logistics would also be relatively simple, and it would be operating well within range of its air forces. Turkey, on the other hand, has no direct land route to Libya, and would have to reinforce and supply by sea. If shit gets real, it is highly doubtful that such a supply line would be sustainable. It would certainly be highly vulnerable to attack from air and sea.

Turkey has some submarines, some frigates (including some old US Perry Class ships) and corvettes, and some small landing craft. Egypt’s forces are comparable, with the big difference being the French-built (originally for Russia) Mistral assault ship, for which Turkey has no counterpart.

So Turkey would be in a very weak position if it indeed attempted to challenge an Egyptian incursion.

Libya is not the only country where Turkey and Russia are at loggerheads. They are also on opposite sides in Syria, and Russian-supported forces have killed well over 100 Turks. There is an uneasy coexistence between Russian and Turkey in Syria, nothing more.

But there’s more! The conflict between Armenia and Azerbaijan (which has been going on since 1988 or thereabouts) is heating up again. Armenia is close to Russia, but Erdo is rallying behind Azerbaijan.

It’s not surprising, then, that Russian helicopters flew along the Turkish border soon after the initial Armenian-Azeri clash in mid-June, and Turkey’s condemnation of Armenia for that fighting.

Erdoğan also has a very strained, and strange, relationship with the US generally, and Donald Trump in particular. Given Trump’s mercurial nature, Erdoğan would be a fool to expect Trump to pull his irons out of the fire in a Turkish dust up with Russia. Or France. Or Greece. Or Egypt.

The Turkish economy is also in a parlous state, meaning that the country is extremely vulnerable to economic pressure. The lira has depreciated badly in recent years, is near all time lows against the dollar, and could easily tip–or be tipped-off a cliff. Turks of a certain age remember the extreme privations that followed US sanctions imposed in the aftermath of the Turkish invasion of Cyprus in 1974. Younger generations don’t have that experience, and have (at least in the big cities) attained a degree of affluence that could be gone in a trice. It is an open question whether they would, in a fit of nationalist pride, forgive Erdoğan for that.

Erdoğan also outraged much of the Christian world with his conversion (on extremely dubious legal grounds) of the venerated Aya Sophia/Hagia Sofia from a museum (established by Ataturk) back to a mosque.

Erdoğan’s political situation is shaky–which may be why he is engaged in so much adventurism. He lost the big cities–Istanbul and Ankara notably–to the opposition CHP. He still has very strong support in the Anatolian heartland, especially among devout Muslims there (and in the cities as well). But the country is divided and Erdoğan has a lot of domestic enemies, and is making more by the day.

In sum, Erdoğan has picked a fight with pretty much everyone with a stake in the eastern Mediterranean. Why he’s doing so is not completely clear. In part, it’s delusions of grandeur: he envisions himself as the emerging dominant power in that region. But he can be so only at the sufferance of the US and Russia in particular. He is appealing to a highly chauvinistic populace–Turks are arguably the most chauvinistic nation in the world–in order to bolster his political situation.

But strategically his actions appear to be incredibly foolhardy and shortsighted. It is hard to see the upside, especially in Syria and Libya. The downsides are huge. He must be counting that the big boys in the neighborhood are willing to put up with his bumptiousness. But if he’s wrong, Turkey will be in a world of hurt.

He needs to be most careful about the Russians. After Turkey shot down a Russian jet over Syria, the furious Russian reaction forced Erdoğan to back down. Now he is risking confrontation with them not only in Syria, but in Libya and Armenia/Azerbaijan. With Putin too perhaps needing a wag the dog moment again (given the uninspiring results of his constitutional referendum, growing discontent as illustrated by open protests in the east, and chronic economic difficulties), Erdoğan could be made to order.

Fools rush in where angels fear to tread. Erdoğan is rushing in where angels avoid, and doing so very likely because he is a fool.

School’s Out Forever?

As summer marches inexorably towards fall, the latest battle in the Covid Wars is being fought over the reopening of primary and secondary schools. Democratic politicians, and teachers unions, are leading the charge to forestall face-to-face instruction. The battle cry among teachers appears to be “I don’t wanna die.”

Er, you’re not gonna die. Nor are the children.

One of the few pieces of almost uncontested evidence about Covid-19 is that children are at very low risk of contracting the illness, let alone dying from it. Nor do they pose major threats to passing the virus on to adults.

In the back-and-forth over “is Covid-19 worse than a bad flu,” when it comes to school-age children, the answer is that flu is worse than Covid-19, not the other way around. Yet schools have remained open, flu season after flu season.

Recognizing this, many nations have reopened schools, with no reports of resurgences tied to schools.

But in the US, the education establishment, and Democratic politicians, are largely united in opposing reopening. Some school districts (e.g., in Houston) have postponed resumption of normal instruction until November. (Right when the flu season kicks in. Smart!) Others are suggesting that school’s out, if not forever, for 2020-21.

Given the hectoring and lecturing about SCIENCE! from these very same people, the utter disregard for the evidence is striking.

There is only one rational justification for this refusal to run such a slight risk (and again, a risk that is likely less than during normal winters): traditional instruction provides virtually no value! Revealed preference at work, boys and girls.

Are the education establishment and Democratic politicians willing to stipulate to that? If so, we can save a helluva lot of money paying for teachers and brick-and-mortar schools. For the distance learning model is essentially home schooling plus (and not plus very much). Given the histrionics over home schooling emanating from the education establishment, this haste to adopt the home schooling plus model to avoid an immaterial risk is rather amusing.

In fact, although home schooling does work for some (I know several examples, including a home school family that produced a Harvard physics PhD, a Princeton BA and MA, and another Princeton grad who was a world-known ornithologist at age 13), for most Americans it is impractical because parents are employed, and even for families with a stay-at-home parent, less effective than in-person instruction for myriad reasons.

Meaning that the education establishment is willing to sacrifice the educations and futures of millions of American kids, to avoid . . . pretty much nothing.

In other words there is a huge disconnect between the rhetoric regarding the importance of public education that we are usually bombarded with, and the unseemly eagerness of the public education establishment and its political handmaidens to dispense with the core functions of public education. The disconnect is all the more glaring because the justification offered by the supposed followers of the SCIENCE! is flatly contradicted by the actual science.

So what is to explain this disconnect? I have two hypotheses.

This is all about the 2020 election. The Democrats believe that preventing a return to a semblance of normalcy (and you can stick “the new normal” up a warm, moist, orifice) will boost the odds of defeating Trump. Relatedly, they also believe that keeping the panic alive by stoking fears enhances their electoral prospects.Teachers really like getting paid their full salaries while getting to stay home, assigning some YouTube videos, and calling it teaching.

These hypotheses are of course not mutually exclusive.

Regardless of the explanation, a failure to reopen schools will damage the educations of millions of American children, stunt their social and emotional development, and in some cases inflict serious psychological harm. Moreover, it will inflict substantial stress, distress, and economic harm on adults trying to earn a living now forced to divert time and effort to monitoring their children, and trying to teach them.

It is utterly cynical, and frankly, quite vile. Objectively the case for reopening schools is solid. Certainly far more solid than the cases for various Covid-19 measures, including masks (FFS) or social distancing or lockdowns that have been imposed over the last 4 months. Yet those forcing these latter measures adamantly oppose opening schools.

Like I said. Cynical. And vile.

The Emancipation Memorial–A Coda About Historical Context

I regret to have forgotten an episode during Lincoln’s visit to Richmond in the immediate aftermath of the Confederate capital’s fall in April, 1865. It provides the backstory for the Emancipation Memorial which points out yet again that those who call for the Memorial’s destruction or removal are ignorant fools unfit to render judgment on the Memorial, the towering historical figure it depicts, or the events that it memorializes.

Specifically, on 4 April, 1865, a group of freed slaves, shouting “Glory Hallelujah!” mobbed Lincoln when he disembarked from the USS Malvern and strode the streets of the captured capital, still smoking from the fires set by the retreating Confederates the day before. Several of them knelt before him, some trying to kiss his feet, or the cuff of his pants. Lincoln replied:

“Don’t kneel to me.  You must kneel to God only and thank Him for your liberty.”*

That is is the scene depicted in the Memorial. A slave rising at Lincoln’s injunction not to kneel before him, or any man.

Thus, the Memorial does not symbolize subjugation of black people before the benevolent white father, as the iconoclasts claim. It depicts the exact opposite.

The Memorial therefore does what good public art should do–dramatize an historical event or personage (or, in this case, both) to make a powerful statement about time and place. And in this case, the statement is about liberation and the ending of a great historical “scourge,” which continued “until all the wealth piled by the bondsman’s two hundred and fifty years of unrequited toil shall be sunk, and until every drop of blood drawn with the lash shall be paid by another drawn with the sword.”

It is an event that black artists of an earlier generation thought worthy of commemoration. In 1963, at the 100th anniversary of the Emancipation Proclamation, the State of Illinois commissioned black artist Gus Nall to create a commemorative painting. What did he paint? Not anything related directly to the Proclamation itself: he painted the meeting between the freed slaves and Lincoln on the streets of Richmond, 98 years before, not 100. This was not a moment of humiliation. It was a moment at which a promise was realized, and at which the promisor disclaimed fealty, rather than demanded it.

About these events, and the direct connection between them and the statue in Washington, the iconoclasts are both ignorant and apathetic–they don’t know, and they don’t care. Yet they are swollen with self-righteous belief in their unerring and forever unchallengeable judgment. In their relentless narcissistic presentism they denigrate not just Lincoln, but newly freed people of color. They think they know everything, and can judge everything and everyone, but they know nothing and are fit to judge nothing and no one.

Lincoln’s words, “with malice towards none, with charity towards all” fall on uncomprehending ears today. What we witness today is people seething with malice towards people and events for whom and about which they not have the slightest understanding, nor the smallest speck of human charity. They deserve no respect, and their demands deserve only scorn and rebuke. The nation should not kneel before this mob. I for one will not.

*The NYT described this event on its sesquicentennial in its “Disunion” series that recounted the events of the Civil War day by day. Will they ever do so in an uncritical (let alone laudatory) way in the future? I seriously doubt it.

The “Russian Bounties” Story: The Media Dog Returns to the “Intelligence” Community’s Vomit

“As a dog returns to his vomit, so a fool repeats his folly” — Proverbs 26:11 

This Proverb applies to the American news media and the US “Intelligence” Community, with a variation. The variation being the media returns to the “Intelligence” Community’s vomit, rather than its own per se.

For about four years the news media lapped up whatever lies the “I”C barfed up about “Russian collusion.” And it was all lies. 100 percent.

Honest people can be fooled. Yet, once they are fooled, they distrust who fooled them. Dishonest people lap up lies over and over again. Because they want to.

The latest iteration of this is the recent hysteria over the allegations that the Russians (namely, its military intelligence service, the GRU) paid bounties to the Taliban to kill Americans, that Trump had been briefed about it, and did nothing. These allegations were “credited” to “anonymous intelligence sources.”

The dogs at the New York Times ran to the vomit like they hadn’t eaten in months. Which may be true, since the demise of the impeachment fiasco, and the dominance of the Covid-19 story. But rather than treating another “I”C leak with skepticism, if not disdain, they wolfed it down. Because they wanted to.

In the event–I’m sure you will find this shocking–the “intelligence” was of dubious provenance, and because of that Trump had not been briefed about it. So the story was 100 percent unadulterated puke.

A word to the wise. If you claim to put any credence in any story based on “anonymous sources in the intelligence community,” you are either a fool (because you actually believe it despite the repeated evidence of their untrustworthiness) or a knave (because you know it is likely untrue but choose to treat it as gospel regardless because it is politically useful).

Arguendo, suppose the story is true. What is Trump supposed to do about it? Nuke Russia? Add more sanctions? What’s left to be sanctioned, pray tell?

Those who are flogging this story, and those like it, want a new Cold War with Russia. But apparently they expect only one side to fight it: the Russians, evidently, should be pacifists in this Cold War II. But if the Russians are pacifists, why fight a war against them?

So let’s get real. If there is a Cold War II, then one can expect both sides to utilize the tactics of Cold War I. During which, you might remember, the Soviets supplied massive military supplies to, inter alia, North Vietnam and North Korea which were used to kill Americans.

And during which the United States “Intelligence” Community supplied weapons to Afghan Islamist foes of the USSR that were used to kill thousands of Soviet soldiers.

Memories run long, and payback is a bitch.

Meaning that if you fight Cold War II with the Russians, as day follows night, Russians will try to kill Americans–while attempting not to leave fingerprints. That’s the way Cold Wars are fought.

So be very careful what you ask for: and if you ask for a New Cold War, expect the consequences. And if those consequences include the deaths of American soldiers, you need to accept that the responsibility is largely yours.

It is particularly perverse to blame Trump for the deaths of Americans in Afghanistan. He has been laboring to extract the US from that cesspool, precisely because he believes that it is pointless for American troops to die there, for . . . well, for nothing.

And the establishment–notably the “Intelligence” Community and the Pentagon–have fought him tooth and nail. Apparently forgetting the adage “never reinforce failure,” they have reinforced it for going on 20 years now. And they will not admit failure, and have fought Trump more viciously in his attempts to withdraw than they have fought the Taliban in the Hindu Kush.

In other words, Trump has been trying to save American lives, and the Pentagon and the “Intelligence” Community have been willing to expend them. To what purpose, they cannot explain.

In that respect, the “Russian bounty” story is even more twisted than the run of the mill Russian collusion story. For it represents the most malign elements of the Deep State and their vomit mongers in the media and the Democratic Party crying crocodile tears over dead Americans in Afghanistan, and blaming the man who is trying to prevent more Americans from dying there, all to perpetuate their insane war that will kill Americans as long as it lasts.

It is hard for normal people to imagine a more damning commentary on the American establishment than that. But that likely reflects the limits of my imagination. I am sure that these malign, evil creatures that dwell in the bowels of Langley and the Pentagon will conjure up even more sick actions in the future.

Hide the Decline! Coronavirus Edition

Reported Covid-19 daily deaths (likely exaggerated for reasons I posted on months ago) have been declining inexorably since their peak, and are now about 10 percent of the maximum. Even that is overstated because of backdating in states like Delaware and New Jersey that resulted in large single day death reports that summed deaths that had occurred over periods of weeks or months.

We can’t have that, can we? How are we going to sustain the panic, as politically useful as it is, if we report good news?

No problem–just switch the metric! Whereas for weeks we were told the Grim Death Toll narrative, that has disappeared down the Memory Hole, to be replaced by the Skyrocketing Cases narrative, especially in Red States such as Texas, Florida, and Arizona.

I have been calling bullshit on the case numbers as a meaningful metric since March. It’s even more bullshit now.

A major reason case numbers (i.e., the number of positive tests) are BS is that testing is not a random process, but is endogenous. Moreover–and this is crucial now–the process driving who is tested is changing. Whereas before tests were focused on the symptomatic or the particularly vulnerable, testing is now more widespread. Some companies are requiring employees to be tested in order to return to work, or to remain at work if they have the sniffles.

As a result, more people are testing positive. Moreover, the average age of those testing positive has declined dramatically (because they were censored from the test population before). Most of those people are symptomatic, and those who are experience mild symptoms. Those under 60 exhibit little risk of death, or serious illness (especially if they do not have other serious health conditions). Those who are sick enough to require hospitalization are less likely to require ICU care, and those who do tend to recover at high rates (without ventilation), and have relatively short stays.

As a result, there has been a striking divergence between rising case numbers, and deaths.

But that doesn’t fit certain political needs. So we hear virtually nothing about deaths, but only shrieking about case numbers. This exploits the earlier misconception–misinformation, actually–that the death rate from the virus is high. Indeed, as positive tests accumulate, and serological studies accumulate, it is clear that the infection death rate is in the range of .1-.25 percent, far smaller than the earlier estimates that remain embedded in the memories of most.

The shrieking is particularly intense in–and at–Texas. Yes, Houston has seen a large increase in positive cases. But the deaths in Texas (and Houston) have never been large (up until now 2020 has seen fewer pneumonia-related deaths than in the typical year), and are not trending up . Not that you’d know from reading the media.

So there has been a reprise of the overwhelming the health care system narrative.

The worst sinner at this is my local POS newspaper, the Chronical. This article in particular, which insinuated that Governor Abbott (and no, I’m not a fan) had coerced Houston hospitals into covering up impending doom.

The article starts out with a lie, claiming that Houston ICU utilization had hit 100 percent. Actual data show this did not happen, and that Houston ICU utilization has been fairly constant over since April. Even throwing around scare numbers about 90 plus percent utilization is misleading. Of course hospital facilities are sized so that they do not have persistent unutilized capacity. That is wasteful, and inflates costs. As the data in the link show, moreover, hospitals–rationally–have the ability to expand capacity.

As I said in a very early post, capacity is not a destiny–it is a choice.

Yes, there as an increasing number of Covid patients in ICU. But this is clearly another manifestation of changing testing protocols, and most importantly, of the same problem that makes even the death data meaningless: lumping people in the hospital with Covid together with those who are hospitalized because of Covid. If the increased Covid numbers were there because of Covid, you would see ICU usage go up overall. You don’t. It’s oscillating around normal levels.

It should also be noted that there are reasons to believe that people who should have gone to ICUs, or to hospitals, did not because of Covid. This suppressed numbers and makes it dubious to attribute any increase in utilization to Covid.

As for the supposed coverup, the hospital systems did not stop reporting hospitalization/ICU data, but the projections of future usage.

The outrage! Yeah, because Covid-related predictions have always been spot on, right?

In fact, the only competition between projections is which is the most absurd.

The POS Chronical’s political agenda and utter hypocrisy is on full display:

Then, after reporting numerous charts and graphs almost daily for three months, the organization posted no updates until around 9 p.m. Saturday, sowing confusion about the hospitals’ ability to withstand a massive spike in cases that has followed Gov. Greg Abbott’s May decisions to lift restrictions intended to slow the virus.

Gee. What else happened around the same time. Let me think? Protests ring a bell?

But of course, the protests (and the massive George Floyd funeral) are sacrosanct, and out of respect the virus took a holiday and didn’t exploit the conditions (large crowds) that are supposedly the main source of contagion. (EG., MLB will be restarting–but without fans, because otherwise Minute Maid and other parks would be Covid Central.

The hysteria over case numbers reminds me of a phrase from the Climategate emails: “Hide the decline!” Just as in Climategate, there was a divergence between a number that mattered (actual temperature) and a bogus number (proxy data-based temperatures): actual temps were flat/declining when the proxy number was going up inexorably.

So the battlecry became: Hide the decline!

We are seeing the same thing now. Hide the decline in deaths by hyping irrelevant case numbers, misinterpreting those numbers, and making dire forecasts at odds with the actual data.

If you will recall, the entire justification for lockdowns was to “flatten the curve” to protect the healthcare system. The underlying rationale was that the virus’s spread was inevitable, but we need to control the rate. That is, suppression/elimination was an impossibility until herd immunity was achieved.

Based on that rationale, the surge in cases with low and arguably declining numbers of deaths and no data demonstrating an overwhelmed healthcare system is actually a good thing. It measures progress to herd immunity. Moreover, it’s better to have the spread now, in the summer, rather than when the flu season kicks in, and creates its inevitable increase in demand for healthcare resources–including ICU beds.

But the media and many politicians are completely invested in panic, for malign and dishonest reasons. So it is essential to hide the decline, and hype the spike.

Narcissistic Presentist Bigotry Plus Radical Marxism–What Could Possibly Go Wrong?

The most recent monument to face desecration and destruction is The Emancipation Memorial in Washington, DC. This was the site of a confrontation between raving lunatics dressed in black and a group of elderly black gentlemen who had assembled to protect the monument:

At yesterday’s protest the man with the sign argued not to destroy the emancipation statue, b/c it was paid for by freed slaves. Antifa/BLM used black block tactics to swarm and silence him. He took a stand, bravely, for America and against mob rule. pic.twitter.com/rofLeVb0py

— Mike (@Doranimated) June 27, 2020

The ostensible objection to the Memorial is that portrays a black man in a demeaning, submissive pose at Abraham Lincoln’s feet. This was indeed true of the original design, but due to the objections of African Americans who had seen the design, it was changed to portray the subject rising, with head raised.

If you were a consistent leftist (I crack myself up sometimes) you would actually endorse this portrayal–after all, the incessant drumbeat we hear about slavery as the nation’s original sin and the root of all current evils is based on the very premise that blacks were beaten down, humiliated, and suppressed. In bondage, they were on their knees–literally and figuratively: and the statue portrays that. Emancipation–and remember, this is a monument to Emancipation–gave them the opportunity to rise up and stand like full human beings. But it was just the beginning. That is, the statue conveys powerfully that slavery subjugated black people, and that Emancipation was only the first step in a painful process of rising up to the status of full citizen and full person.

What about that does anyone–including a leftist–believe is untrue?

The monument was paid for by African Americans grateful to Abraham Lincoln, without whom, they realized, they would still be in bondage, and whom they recognized was martyred for his role in freeing them. The model for the rising black man was a former slave–is the modern left insinuating that he was an ignorant Uncle Tom for collaborating in a demeaning portrayal? The oration at the Memorial’s dedication was delivered by Frederick Douglas, who movingly and realistically described Lincoln’s not-John-Brown-like racial views, but who in the end celebrated Lincoln’s greatness, and expressed his gratitude–and impliedly the gratitude of other African Americans–for what Lincoln achieved despite his imperfections (which were largely the inheritance of his time and place). Was Frederick Douglas also a fool advancing the cause of white supremacy?

Note in the video in the tweet that one of the gentlemen that this mentally imbalanced woman is haranguing is clearly doing an historical impression of Frederick Douglas. I am sure that harridan has no clue.

Let’s be clear. This baying mob is not fit even to grovel at the feet of a moral and intellectual giant like Frederick Douglas, let alone assault those doing him homage, or attempting to destroy a monument to which Douglas paid homage on that very spot.

These attacks on the monument are, at best, narcissistic presentism run amok. And presentism is a malign form of bigotry, and in this case ironically deprives mid-19th century African Americans of agency and dignity.

But let’s cut the bullshit. The attack on the Emancipation Memorial has fuck all to do with aesthetics, symbolism, or iconography. Those are just the rhetorical camouflage.

To reprise the theme of several past posts, tearing down this monument is just another act of a movement to tear down the entire nation, extirpate its history root and branch, and replace it with a Marxist paradise.

But don’t take my word for it. Take the word of the person who targeted the monument for destruction, one Glenn Foster:

He told a crowd in Lincoln Park: "Be mindful that the greatest thief of all is our nation. We are a nation of thieves! We stole people, land, money. This entire nation is stained with the blood of my brothers and sisters."

Then why enroll in its elite institution?

— Nic Rowan (@NicXTempore) June 24, 2020

Apropos my earlier post on our Schumpeter Moment, note that Foster attended Harvard. That’s what they “learn” there.

There are other examples–too many–of the fundamental nature of the movement. Here’s one:

Law enforcement officials had to respond to a large group of Black Lives Matters activists late on Friday night that stormed a Beverly Hills residential neighborhood chanting “Eat the rich!” and “Abolish capitalism now!”

I could go on. And on. And on.

At root, this is not about racial injustice, really. That issue is merely a wedge. Or better, an opiate being given to the masses to cloud their faculties and dull the pain of the radical surgery that these radicals have planned for them.

Our Schumpeter Moment

One of the first economics books I read, in high school, was Joseph A. Schumpeter’s Capitalism, Socialism, and Democracy. Truth be told, I only had a dim understanding of what Schumpeter was saying. I came in at the end of the conversation as it were. Not having any exposure to Marx, for example, rendered me rather incapable of comprehending Schumpeter’s critique of Marxism. This also made me fail to appreciate that what Schumpeter was advancing was an alternative dialectic that ended in the same place: the demise of capitalism.

As I accreted knowledge over the years, I have returned to Schumpter from time to time, and gained new insights from CS&D. Witnessing the current tumult in the United States, and the West more generally, makes me appreciate the book and its insights all the more. We are experiencing a Schumpeter moment. The factors that he identified as the sappers that would undermine capitalism (and liberal democracy, as distinct from social democracy) are in clearly in operation today: large scale corporate enterprise and intellectuals.

Schumpeter wrote CS&D in 1943, in the immediate aftermath of the Great Depression, and when the viability of capitalism after the World War was much in doubt. The Depression was considered a crisis of capitalism, and the most renowned predictor of such a crisis, Karl Marx, was all the rage. The starting point of CS&D is therefore Marx.

Schumpeter examined Marx and Marxism sympathetically and seriously, but ultimately rejected the Marxian theory of capitalist self-destruction. The causal mechanism in Marx was the “declining rate of profit”, an implication of the classical economics in which Marx was steeped. This declining rate of profit would lead to pressure to cut wages, resulting in the immiseration of the proletariat, which would eventually spark a communist revolution.

Schumpeter rejected this prediction on theoretical and empirical grounds. In essence, Schumpeter rejected the classical (and neoclassical) frameworks which did not recognize technological advance and innovation. Schumpeter argued that waves of technological innovation–“creative destruction”–would result in new enterprises and industries supplanting old ones. The temporary monopoly power of the innovators would generate profits. But profits would not disappear, as would happen due to entry in a technologically stagnant classical world. Instead, the incumbent monopolists would be supplanted–destroyed–by the creators of new ideas and technologies.

So Schumpeter concluded that capitalism would not die a Marxist death. But he did conclude that it would die nonetheless, although by a different dialectic.

Schumpeter identified two major dynamics. The first was the destruction of the entrepreneurial function and the entrepreneur, and the dominance of the bureaucratic corporation. The second was the rise of an intellectual class, a rise that could only occur due to the massive wealth created by capitalism.

Marx said that capitalism would fall due to its internal contradictions. Schumpeter said the same, but identified totally different internal contradictions.

With respect to the elimination of the middling, independent entrepreneur, Schumpeter summarized thus:

To sum up this part of our argument: if capitalist evolution—“progress”— either ceases or becomes completely automatic, the economic basis of the industrial bourgeoisie will be reduced eventually to wages such as are paid for current administrative work excepting remnants of quasi-rents and monopoloid gains that may be expected to linger on for some time. Since capitalist enterprise, by its very achievements, tends to automatize progress, we conclude that it tends to make itself superfluous—to break to pieces under the pressure of its own success. The perfectly bureaucratized giant industrial unit not only ousts the small or medium-sized firm and “expropriates” its owners, but in the end it also ousts the entrepreneur and expropriates the bourgeoisie as a class which in the process stands to lose not only its income but also what is infinitely more important, its function. The true pacemakers of socialism were not the intellectuals or agitators who preached it but the Vanderbilts, Carnegies and Rockefellers. This result may not in every respect be to the taste of Marxian socialists, still less to the taste of socialists of a more popular (Marx would have said, vulgar) description. But so far as prognosis goes, it does not differ from theirs.

Instead of “bureaucratized giant industrial unit,” today I would say the “bureaucratized giant tech firm.” And instead of Vanderbilts, Carnegies and Rockefellers, Bezoses, Gateses, Zuckerbergs, and Pages. And maybe Waltons and their ilk as well.

The rate of entrepreneurial dynamism has definitely declined in the US (as indicated by the decline in the rate of new business formation even prior to Covid-19). Via a variety of mechanisms political and economic (note the ordering), the most recent victors of creative destruction are destroying the entrepreneurial class that Schumpeter identified as the social and political bulwark of capitalism.

Schumpeter’s most piquant critiques focus on intellectuals. He has something of a difficulty in defining exactly what they are. In the end, he comes to something like Potter Stewart’s definition of pornography: you know them when you see them.

Schumpeter argues that intellectuals are hostile to capitalism because under it they do not receive the economic rewards–and crucially, the status–that they believe that their (allegedly) superior intellectual attainments deserve. But the massive wealth that capitalism creates permits the extension of higher education, and the support of a group of individuals (Schumpeter does not believe they truly represent a “class”) who are inveterately hostile to the system that allows them to exist in the first place. Schumpeter notes:

But in the case of capitalist society there is a further fact to be noted: unlike any other type of society, capitalism inevitably and by virtue of the very logic of its civilization creates, educates and subsidizes a vested interest in social unrest. . . .

Broadly speaking, conditions favorable to general hostility to a social system or specific attack upon it will in any case tend to call forth groups that will exploit them. But in the case of capitalist society there is a further fact to be noted: unlike any other type of society, capitalism inevitably and by virtue of the very logic of its civilization creates, educates and subsidizes a vested interest in social unrest.

Schumpeter trenchantly notes that a salient characteristic of intellectuals is the

absence of direct responsibility for practical affairs. This touch in general accounts for another—the absence of that first-hand knowledge of them which only actual experience can give. The critical attitude, arising no less from the intellectual’s situation as an onlooker—in most cases also as an outsider—than from the fact that his main chance of asserting himself lies in his actual or potential nuisance value

Which brings to mind Orwells aphorism: there are some ideas so stupid only an intellectual can believe them. Because they are not tested by empirical/practical experience.

Schumpeter also has a quasi-Leninist take on intellectuals. They can be a vanguard of revolution. The masses are incapable of acting independently and autonomously. Intellectuals provide the leadership and coherence to inchoate dissatisfaction.

Schumpeter points to another internal contradiction of capitalism. The insistence of the entrepreneurial capitalist class on freedom (which is what allowed it to escape from the thrall of feudal governments) makes it incapable of cracking down on its mortal enemies.

Looking at Schumpeter through the lens of 2020 America, I am astounded at his prescience. Of course, almost 80 years on the exact dynamics of today are different than Schumpeter prognosticated. But as Twain said, it rhymes.

For what do we see today? A (tech) corporate oligarchy that is hostile to the middle class, and to entrepreneurs, and which largely supports–often enthusiastically–the current attacks on middle America. An oligarchy that uses its economic power to exercise political and social power. A declining entrepreneurial class. And most notably, a seething host of discontented intellectuals–notably in academia–who are inveterately hostile to capitalism and liberal democracy, and who are at the vanguard of opposition to it. Yet further, a large group of Americans of traditional values who are largely paralyzed in the face of these attacks on their beliefs, institutions, and livelihoods, in large part because their bourgeois values prevent them from responding forcefully to the mortal threat that the oligarchs and intellectuals present.

Tragically, the insane lockdowns adopted in response to Covid-19 are accelerating this process. They have perversely benefited the Amazons and Facebooks and Walmarts (there are no coincidences, comrade!) and devastated the small businesses of America. They have created seething discontent due to unemployment and social isolation that is fertile ground for intellectuals to exploit. Throw in George Floyd, and you have a perfect storm.

It is interesting to note that in the prematurely triumphalist 1990s, in the aftermath of the fall of the USSR, Schumpeter’s arguments were dismissed as having been disproved by events. Most notably, the man who has my vote as The Most Wrong Person Ever, Francis Fukuyama sneeringly wrote:

Schumpeter’s work stands as one of the most brilliantly wrong-headed books of the century in its central prediction that socialism would ultimately replace capitalism because of the latter’s insuperable cultural contradictions. Writing in 1943, Schumpeter argued that there was no inherent reason why central planning should work less well than free markets in the production of technological innovation, a point not as glaringly off the mark then as now. The central problem with capitalism, however, was not economic but cultural: it would produce a privileged class of people who would reject the sources of their own wealth and seek a socialist order. In this he seemed quite right for many years as intellectuals and artists in the West struggled against the very system that made their discourse possible. Things began to look rather different after the Reagan and Thatcher revolutions in the 1980s and the subsequent collapse of communism. Schumpeter’s book contains what is probably the most realistic, albeit minimalist, definition of democracy as a competition among elites for the allegiance of the people.

“Brilliantly wrong-headed”? That’s what Freud called “projection,” Mr. Fukuyama. (Though with respect to him, the adjective “brilliantly” can safely be omitted.)

In light of current events, Schumpeter appears much more prescient than Fukuyama. The confluence of corporatism and a coddled, cosseted intellectual class–both the products of capitalism and liberal democracy–is on the verge of killing capitalism and liberal democracy. Which is exactly what Schumpeter foresaw in 1943.

What Were the Crimes of US Grant & Hans Heg? They Were Americans–and Fighting Against Slavery Does Not Expiate the Guilt

You’ve probably heard of Ulysses S. Grant. He arguably did more for African Americans than anyone in American history. It is highly doubtful that the United States of America would have prevailed against the Confederate States of America without Grant. His brilliant victories in the Western Theater (most notably Vicksburg and Chattanooga) knocked the props from under the Confederacy, and his relentless, grinding campaign in Virginia in 1864 and 1865 (and his orchestration of the overall Union effort in those years) accomplished what previous generals had failed to: smashing the Confederacy’s ability to resist.

As president, he pushed a vigorous Reconstruction policy, and was largely personally responsible for crushing the first incarnation of the KKK.

Grant has long been ranked among the worst presidents. Why? Because the history profession from the 1880s-1930s was dominated by Southerners who detested his Reconstruction policies. What better endorsement could one have?

You probably haven’t heard of Hans Heg. Heg was a Norwegian immigrant to Wisconsin. He was a fierce abolitionist, and early member of the Free Soil Party and then the Republican Party. He commanded the 15th Wisconsin Volunteer Infantry, and was mortally wounded with a gut shot in the woody abattoir at Chickamauga on 19 September, 1863. His brigade suffered almost 50 percent casualties in fighting Bushrod Johnson’s Tennessee brigade and James Robertson’s Texas Brigade.

I have walked the ground where Heg fought and died at least a dozen times. I have also read his moving letters.

Now Grant and Heg have something in common besides fighting to end slavery in the United States. Their statues (Grant’s in San Francisco, Heg’s in Madison, WI) have been toppled in the ongoing (and indeed intensifying) frenzied assault on public historical memorials, ostensibly to remove from our sight the glorification of slavery. Poor Colonel Heg’s bronze head was separated from his body and he was tossed into Lake Monona (which is where Otis Redding perished in a plane crash in 1967, by the way).

One’s first reaction might be to condemn the utter ignorance of those who assault the memorials of those who actually fought–and in Heg’s case, died horribly–to end slavery and bring freedom and justice to African Americans.

But I think that reaction is wrong. The indiscriminate nature of the assaults on memory are not the product of ignorance: they demonstrate with incredible clarity the true motivation and impetus behind this iconoclastic moment, and the beliefs of those who carry out these deeds. They believe that America is evil, that its history is a litany of sin, and its memory must be ripped up, root and branch. The message is: these figures are evil, regardless of what they did, or what side they fought on, because they are Americans who were revered by earlier generations of sinful Americans.

It is pointless to argue facts about the acts of Grant or Heg with these people. Those facts pale into insignificance in the face of the irredeemable sin of the United States of America.

Destroying the statues of Grant or Heg (or the threatened destruction of the Emancipation Monument) make this point far more forcefully than removing the statue of a Nathan Bedford Forrest. These acts show that these people believe that nothing you have done can redeem you. Your crime is that you were an American. Your good acts are not sufficient to expiate that guilt. Thus, I expect that monuments to such individuals will become a special target for future destruction.

To argue against these people is as futile as a lifelong Bolshevik pleading his devotion to the cause when facing one of Stalin’s NKVD executioners.

This is an irreconcilable conflict of visions, and an existential one. And if people of good will, normal Americans, don’t figure that out quickly, the consequences will be catastrophic. The time to fight back is now. And hopefully now is not too late.

When Judging History, Remember Matthew, Not Marx

A little less than 3 years ago, during the last spasm of nihilistic iconoclasm that wracked the United States, I wrote:

It is because of this loss of historical memory that I am averse to iconoclasm. I am also quite conscious that iconoclasm is itself almost always an assertion of political power, and as such can be as divisive as the erection of the icons was. A cycle of symbolism can sow discord, and generate much more heat than light. In a deeply divided country, we should be looking for ways to improve understanding and to provide fora for reconciliation, rather than to inflame divisions. Building the monuments was a way of showing who is on top: taking them down is a way of doing the same. But assertion of power relations exacerbates conflict and detracts from the advancement of true equality.

The Confederate monument controversy has also catalyzed tribalism, perhaps intentionally so, as this has definite political uses, most notably making it possible for the left to claim that the fringe mouth breathers who rallied to defend the monument are representative of all its political adversaries. It is also the last thing the increasingly tribal US needs at present.

Today is like that. Only on steroids and meth.

Especially the part about iconoclasm being an assertion of political power. For that is the real driving force behind the current orgy of destruction–which is no longer limited to the US, but has spread around the world.

In the US, the hard left is hell-bent on imposing a Howard Zinn version of history on the entire country. A version in which the nation’s history is a litany of crimes, with no redeeming features or redeeming figures. For a nation such as that must be uprooted, destroyed, and then remade. The past must be erased–no, extirpated–in order to clear the way for a glorious utopian future.

Hence everything–everything–has to go. No historical figure is safe. The monument to the (black) 54th Massachusetts Volunteer Infantry in Boston. The statue of abolitionist John Greenleaf Whittier in the town in California that bears his name. No one is pure enough to meet the standards of today’s Jacobins and Red Guardists.

The most commonly cited justification for this is “but slavery!” Where once upon a time people played Six Degrees From Kevin Bacon, we now play–or are forced to witness and assent to–Six Degrees From Slavery, in which lines are drawn from various figures or places to slavery. (Although not consistently–Kente cloth being an notable exception). If there is a connection within six degrees–into the furnace! And such connections inevitably exist in any nation or culture with a history of slavery. Which, as it happens, is every nation and culture. Meaning everything is at risk.

This has reached its most ludicrous (but not necessarily the ultimate in ludicrousness–there’s still time!) in campaigns against Penny Lane in Liverpool (allegedly, but not proved, to be named for a Mr. Penny who was involved in the slave trade in the distant past) and the University of Virginia logo, upon which the depictions of handles of crossed swords included a wavy pattern evocative of the Serpentine Walls at UVA–walls which, we are now told, “former President Thomas Jefferson designed . . . to muffle the sounds of slaves and hide them from public view.”

Color me skeptical. (Can I say that?) This is attributed to “historians.” I have looked fairly extensively to see which historians, and the basis for this conclusion, but to no avail. If someone can provide the documentation, I would be glad to evaluate it.

Building walls around universities is hardly a novelty. Creating cloistered spaces at universities or other scholastic institutions to isolate them from the intrusions of the outside world dates back to medieval times–visit a college at Oxford sometime. Or most monasteries.

But never mind, whatever the origins of the walls, they have long been recognized as architecturally distinctive (though they harken to English precedents). So the interest in and aesthetic value of the walls has existed and exists independent of whatever thought gave impetus to Jefferson to create them.

No, this seems like a classic Alinskyite effort intended to dragoon a public institution, and its craven administrators (don’t dare call them “leaders”) into genuflecting before the power of the radicals. They pick a target–the wall–freeze it, personalize it, polarize it.

And then they move on to the next target, because there is no limiting principle here. Again, the imposition of the Howard Zinn view of American history recognizes no limits: everyone and everything that preceded Year Zero is evil, and must be destroyed.

If an abstract representation of the Serpentine Wall is today considered an affront and offensive, how can the walls themselves be any less so? If you must eliminate the image, how can you possibly tolerate the real thing? In other words: how long before there is a call for the walls to be torn down, or a mob takes the job into its own hands?

The radicals will march from surrender to surrender. Given that they will never compromise, the line has to be drawn at no iconoclasm, period. Monuments are a testament to their time and place. Let them stand as such, and let our interpretation of those things change with the times and knowledge.

Quite interestingly, French President Emmanuel Macron, agrees, and forcefully so:

Would that there would be someone equally articulate taking such a strong stand here, or in the UK, or elsewhere in the Anglosphere. Bravo, M. le President.

This is about history, but it’s not only about history. It’s not even mainly about history. Orwell: “Who controls the past controls the future. Who controls the present controls the past.” The delegitimization of the American past (and the British past and the Western past (“decolonize your bookshelf”)) is just one part of a concerted campaign to delegitimize our institutions and our cultures, in order to replace them with those imagined in the radicals’ fevered brains.

The Jacobins brook no opposition and in fact demand complete subservience. It is not sufficient to say, reasonably enough, that black lives matter. No, it is necessary to endorse (or at the very least, not dare to criticize) Black Lives Matter, thereby giving your asset to its entire radical, Marxist, crypto-Marxist, divisive, and race-charged agenda. In this way, the radicals opportunistically use empathy and goodwill and shock at shocking events as a Trojan Horse to smuggle their extreme agenda inside America’s (metaphorical) walls–and inside your heads. And we know what happened to the Trojans when they accepted the Greek gift.

So call me Cassandra: beware of radicals bearing “gifts.”

Particularly narcissistic radicals, like those who dominate today. They cast judgment on everyone else, and everyone who went before. All fail to live up to their lofty standards. But they apparently assume that they are perfect, and no future people, radical or otherwise, will judge them.

They would be wise to heed Matthew 7:1-3:

Judge not, that ye be not judged. For with what judgment ye judge, ye shall be judged: and with what measure ye mete, it shall be measured to you

They should. But they won’t. Because the history that they so haughtily disdain shows they never do. So they must be fought. Hammer and tong.

Igor Sechin Is An Idiot. But You Knew That.

The very informative RBN Energy blog notes “Look What You Made Me Do – Permian Crude Producers Waste No Time In Ramping Up Production“:

Crude oil supply news comes in from all angles these days, bombarding the market daily with fresh information on producers’ efforts to ramp their volumes back up now that the global economic recovery is cautiously under way. Crude demand is rising, storage hasn’t burst at the seams yet, and prices have come a long, long way in just a few weeks. Permian exploration and production companies, having avoided a fleeting, longshot chance that the state of Texas might regulate West Texas oil production, are responding to higher crude oil prices as free-market participants should. The taps are quickly being turned back on, unleashing pent-up crude and associated gas volumes that, you could say, were under a sort of quarantine of their own for a while. Today, we provide an update on the status of curtailments in the Permian Basin.

The story mentions “the taps.” US shale regions, Permian in particular, are as close to something that can be turned on and off like a tap as anything in the history of the oil business.

You will recall that Igor Sechin’s brain flash in responding to the Covid-caused demand crash was to spurn Saudi importuning to extend output cuts, which spurred the steamed Saudis to increase output, thereby turning a hard fall in prices into a bona fide crash. A crash that hurt Russian producers generally, and Rosneft specifically, extremely hard.

The reasoning for Sechin’s strategy was that US shale producers had been the main beneficiary of previous output cuts, and he wanted to drive them out of business. Predatory pricing, in other words.

But as the RBN post indicates, this strategy, like most predatory pricing strategies, doesn’t work if the target can rope-a-dope and recover when you attempt to raise prices. That’s exactly what’s happening.

Yes, some companies have gone bankrupt–but bankruptcy is different than destruction. (Igor might not know this. Seriously.) And yes, the industry is facing more stringent financing conditions–but if prices rise these will ease too, and drilling activity will resume.

In other words, Sechin failed to realize that not only is predatory pricing almost always a futile strategy, it is particularly futile when unconventional US oil production is concerned. The Saudis found this out in 2014-2015, but Igor either wasn’t paying attention, or didn’t learn the lesson.

Predation doesn’t pay. This is hardly a new insight, or one not demonstrated by repeated experiences–including experience involving Igor’s intended prey.

Sechin’s predatory endeavors work when they involve exploiting the Russian legal system. In the marketplace, not so much. But we all knew that Igor is basically a thug, and not all that bright.