CPAC 2015

Gladstone quoteI haven’t been doing much politics lately. That doesn’t mean that I no longer care, I do as much as ever. It means that for the present all we can really do is hold, and frankly I’m very disillusioned with the Republicans, who have turned into democrat (not so) lite.

Still CPAC is different. Even though they let some of the ones we derisively call RINOs talk, it’s about conservatism, and doing things that work. So, here’s a selection from last weekends CPAC 2015.

My overall thrust remains what it always has been. It is summarized quite well in the lead quote in the sidebar.

This you really want to listen to, it is that important!

And we’ll finish off with a man who knows all to well what Brent Bozell was talking about. If what you know about UKIP comes from the British press, you’ve simply been lied to. Unless I had a very good reason for voting for somebody else, and some do, I’d vote UKIP in a heartbeat.


The Top Five Events in 2014

OK, I admit it, this is a bit heavy (not to mention long) for a Saturday post but, this type of post hasn’t been seen here in quite a while, and I think Stratfor hit the nail very squarely on the head here. I’ll let you read it, and then I’ll have a few comments.

By George Friedman

‘Tis the season to make lists, and a list shall be made. We tend to see each year as extraordinary, and in some senses, each year is. But in a broader sense, 2014 was merely another year in a long chain of human triumph and misery. Wars have been waged, marvelous things have been invented, disease has broken out, and people have fallen in love. Nonetheless, lists are called for, and this is my list of the five most important events of 2014.

1: Europe’s Persistent Decline

The single most important event in 2014 was one that did not occur: Europe did not solve its longstanding economic, political and social problems. I place this as number one because regardless of its decline, Europe remains a central figure in the global system. The European Union’s economy is the largest in the world, taken collectively, and the Continent remains a center of global commerce, science and culture. Europe’s inability to solve its problems, or really to make any significant progress, may not involve armies and explosions, but it can disrupt the global system more than any other factor present in 2014.

The vast divergence of the European experience is as troubling as the general economic malaise. Experience is affected by many things, but certainly the inability to find gainful employment is a central feature of it. The huge unemployment rates in Spain, Greece and southern Europe in general profoundly affect large numbers of people. The relative prosperity of Germany and Austria diverges vastly from that of southern Europe, so much so that it calls into question the European Union’s viability.

Indeed, we have seen a rise of anti-EU parties not only in southern Europe but also in the rest of Europe as well. None have crossed the threshold to power, but many are strengthening along with the idea that the benefits of membership in a united Europe, constituted as it is, are outweighed by the costs. Greece will have an election in the coming months, and it is possible that a party favoring withdrawal from the eurozone will become a leading power. The United Kingdom’s UKIP favors withdrawal from the European Union altogether.

There is significant and growing risk that either the European Union will have to be revised dramatically to survive or it will simply fragment. The fragmentation of the European Union would shift authority formally back to myriad nation states. Europe’s experience with nationalism has been troubling, to say the least — certainly in the first part of the 20th century. And when a region as important as Europe redefines itself, the entire world will be affected.

Therefore, Europe’s failure to make meaningful progress in finding a definitive solution to a problem that began to emerge six years ago has overwhelming global significance. It also raises serious questions about whether the problem is soluble. It seems to me that if it were, it would have been solved, given the threat it poses. With each year that passes, we must be open to the possibility that this is no longer a crisis that will pass, but a new, permanent European reality. This is something we have been pointing to for years, and we see the situation as increasingly ominous because it shows no signs of improving.

2: Ukrainian and Russian Crises

Historically, tensions between Russia and the European Peninsula and the United States have generated both wars and near wars and the redrawing of the borders of both the peninsula and Russia. The Napoleonic Wars, World War I, World War II and the Cold War all ended in dramatic redefinitions of Europe’s balance of power and its map. Following from our first major event of the year, the events in Ukraine and the Russian economic crisis must rank as the second most important event.

Stratfor forecast several years ago that there would be a defining crisis in Ukraine that would be the opening to a new and extended confrontation between the European Peninsula and the United States on one side and Russia on the other. We have also forecast that while Russia has regional power, its long-term sustainability is dubious. The same internal factors that brought the Soviet Union crashing down haunt the Russian Federation. We assumed that the “little Cold War” would begin in the mid-2010s, but that Russian decline would not begin until about 2020.

We have seen the first act, and we continue to believe that the final act isn’t imminent, but it is noteworthy that Russia is reeling internally at the same time that it is trying to cope with events in Ukraine. We do not expect Russia to collapse, nor do we expect the Ukrainian crisis to evolve into a broader war. Nevertheless, it seems to me that with this crisis we have entered into a new historical phase in which a confrontation with significant historical precedents is re-emerging. The possibility of conflict is not insignificant; the possibility that the pressures on Russia, internally and externally, might not speed up the country’s own crisis cannot be discounted. Certainly the consequences of oil prices, internal economic dislocation, the volatility of the ruble and sanctions all must give us pause.

The Russians think of this as an event triggered by the United States. In the newspaper Kommersant, I was quoted as saying that the American coup in Ukraine was the most blatant in history. What I actually said was that if this was a coup, it was the most blatant in history, since the United States openly supported the demonstrators and provided aid for the various groups, and it was quite open in supporting a change in government. The fact that what I said was carefully edited is of no importance, as I am not important in this equation. It is important in that it reveals a Russian mindset that assumes that covert forces are operating against Russia. There are forces operating against it, but there is nothing particularly covert about them.

The failures of Russian intelligence services to manage the Ukrainian crisis and the weakening of the Russian economy raise serious questions about the future of Russia, since the Russian Federal Security Service is a foundation of the Russian state. And if Russia destabilizes, it is the destabilization of a nation with a massive nuclear capability. Thus, this is our second most important event.

3: The Desynchronization of the Global Economy

Europe is predicted to see little to no growth in 2015, with some areas in recession or even depression already. China has not been able to recover its growth rate since 2008 and is moving sideways at best. The United States announced a revision indicating that it grew at a rate of 5 percent in the third quarter of 2014. Japan is in deep recession. That the major economic centers of the world are completely out of synch with each other, not only statistically but also structurally, indicates that a major shift in how the world works may be underway.

The dire predictions for the U.S. economy that were floated in the wake of the 2008 crisis have not materialized. There has been neither hyperinflation nor deflation. The economy did not collapse. Rather, it has slowly but systematically climbed out of its hole in terms of both growth and unemployment. The forecast that China would shortly overtake the United States as the world’s leading economy has been delayed at least. The forecast that Europe would demonstrate that the “Anglo-Saxon” economic model is inferior to Europe’s more statist and socially sensitive approach has been disproven. And the assumption that Japan’s dysfunction would lead to massive defaults also has not happened.

The desynchronization of the international system raises questions about what globalization means, and whether it has any meaning at all. But a major crisis is occurring in economic theory. The forecasts made by many leading economists in the wake of 2008 have not come to pass. Just as Milton Friedman replaced John Maynard Keynes as the defining theorist, we are awaiting a new comprehensive explanation for how the economic world is working today, since neither Keynes nor Friedman seem sufficient any longer. A crisis in economic theory is not merely an academic affair. Investment decisions, career choices and savings plans all pivot on how we understand the economic world. At the moment, the only thing that can be said is that the world is filled with things that need explaining.

4: The Disintegration of the Sykes-Picot World

Sir Mark Sykes and Francois Georges-Picot were British and French diplomats who redrew the map of the region between the Mediterranean Sea and Persia after World War I. They invented countries like Lebanon, Jordan, Syria and Iraq. Some of these nation-states are in turmoil. The events in Syria and Iraq resemble the events in Lebanon a generation ago: The central government collapses, and warlords representing various groups take control of fragments of the countries, with conflicts flowing across international boundaries. Thus the Iraqi crisis and the Syrian crisis have become hard to distinguish, and all of this is affecting internal Lebanese factions.

This is important in itself. The question is how far the collapse of the post-World War I system will go. Will the national governments reassert themselves in a decisive way, or will the fragmentation continue? Will this process of disintegration spread to other heirs of Sykes and Picot? This question is more important than the emergence of the Islamic State. Radical Islamism is a factor in the region, and it will assert itself in various organizational forms. What is significant is that while a force, the Islamic State is in no position to overwhelm other factions, just as they cannot overwhelm it. Thus it is not the Islamic State, but the fragmentation and the crippling of national governments, that matters. Syrian President Bashar al Assad is just a warlord now, and the government in Baghdad is struggling to be more than just another faction.

Were the dynamics of the oil markets today the same as they were in 1973, this would rank higher. But the decline in consumption by China and the rise of massive new sources of oil reduce the importance of what happens in this region. It still matters, but not nearly as much as it did. What is perhaps the most important question is whether this presages the rise of Turkey, which is the only force historically capable of stabilizing the region. I expect that to happen in due course. But it is not clear that Turkey can take this role yet, even if it wished to.

5: The Births of Asher and Mira

I was given two new grandchildren this year. For me, this must be listed as one of the five major events of 2014. I am aware that it is less significant to others, but I not only want to announce them, I also want to point out an important truth. The tree of life continues to grow new branches inexorably, even in the face of history, adversity and suffering. The broad forces of history and geopolitics shape our lives, but we live our lives in the small things. As much as I care about the other four matters — and I do — I care much more for the birth and lives of Asher and Mira and my other grandchild, Ari.

Life is experience in the context of history. It is lived in intimate contact with things that history would not notice and that geopolitics would not see as significant. “There are more things … than are dreamt of in your philosophy,” Hamlet said to his friend Horatio. Indeed, and their names are Asher, Mira and Ari. This must not be forgotten.

Have a happy New Year’s, and may God grant you peace and joy in your lives, in spite of the hand of history and geopolitics.

Follow us: @stratfor on Twitter | Stratfor on Facebook

The Top Five Events in 2014 is republished with permission of Stratfor.”

And my take on these:

1. I’ve been saying for as long as I’ve been writing this blog (actually longer) that Europe is dying. Since I have many UK readers, this is the background as to why I would likely support UKIP, out here in the colonies is a vast reservoir of liking, sympathy, and yes love for Mummy, most of us would very much like it if you were to regain your heritage and come grow with us. It worked well for the Tudors, and I think it would work even better for us all today. As Winston Churchill said, “The same language, the same hymns, and, more or less, the same ideals.”  As William Wordsworth said in 1807,

We must be free or die, who speak the tongue

That Shakespeare spoke, the faith and morals held.

Your elites have had their fling with the Europeans again, it’s time to come home, where you are loved and appreciated. Freedom matters, guys, too many of our people are buried around the world not to remember our heritage.

2. Russia has bitten off far more than it can chew, I think and will choke. What happens then is anyone’s guess. It a lot like 1979 all over again but Russia is a lot less stable than the USSR was, and a lot more uninhibited. You’ve noted I’m sure that the petroleum glut has reduced Russia’s GDP by up to 50%, and American production in government fields is still down by about 17% from its peak. If we drill on government lands and Saudi Arabia, who wants to hurt Iran, keeps producing, what happens? I don’t know and I doubt anyone really does.

3. We’re not in particularly good shape ourselves, but compared to the rest of the world, US, UK, Canada and the rest of Oceania, are pulling away, although not as fast as we did in the nineteenth century. I don’t know enough in this field to offer predictions but, again we’re “better together”, as we heard a lot of last year. If we can bring India along, we have a world beater started.

4. I don’t think the Sykes-Picot world will be coming back, we’ best be thinking about what happens next. And remember that Middle Eastern oil is becoming less important by the week. What happens when the Saudi’s go broke?

5. And finally, Congratulation to Mr. Friedman and his family. He’s right, whatever happens life goes on.

Capitalism and Public Words

I ran across a couple of TED talks yesterday that I want to share with you. Like you, I tend to find bias in most of them, or at least a different bias than mine. :-) But these are very good.

First is The Killer Apps of Prosperity

Makes all the sense in the world doesn’t he?

And then we’ll learn about Snollygosters

And these are both enjoyable and informative, I think.

Having solved all other problems, Obama to fix your dishwasher

Seal of the United States Department of Energy.

Seal of the United States Department of Energy. (Photo credit: Wikipedia)

Well, guys, Apparently, our appliances still aren’t efficient enough. Of, course you know, and so do I that every time the government mandates things for your own good, the aforesaid things get worse. How many times do you flush your new super efficient toilet? Yep, so do we all. How many time do we have to flush a low flow toilet before it uses more water than the old one? 2 maybe 3.

You know of course that washers and dryers made in the 60s and 70s will last forever, you probably also know that new ones won’t, a couple of years is it. Why? because they are efficient. Sounds counterintuitive, but really, it’s not. You make things efficient by making them just barely good enough. Very little margin involved, just enough water on average, just enough motor, don’t use 16 gauge metal when 22 gauge will work, and so on. You make long term dependability by over engineering things- making them better than they absolutely have to be. You can’t have both, and you can’t choose anymore either.

From Hot Air

I guess he really was multitasking out on the golf course. The President’s team has been hard at work behind the scenes, coming up with a strategy … well, maybe we should say plan, to address the nation’s many challenges.

Spurred by President Obama’s climate action plan, the Department of Energy is pumping out new standards for refrigerators, dishwashers, air conditioners, ceiling fans, furnaces, boilers, water heaters, lamps and many more appliances.

The administration says the standards will not only help the planet but also stimulate the economy by saving consumers money on their energy bills that they can spend elsewhere.

After what we’ve been through with energy regulations, you’d think the administration would be at least a little hesitant to leap in for another grab at that brass ring. I mean, won’t a sudden raft of new requirements for the products everyone has to purchase have some, er… unintended consequences? William Teach seems to have been thinking along the same lines.

While the rules may save a bit of energy (and there is nothing wrong with that, though it should be the consumer choice, not Government Mandate), it will also drive up the cost of the appliances/devices, which will harm the lower and middle classes.

Having solved all other problems, Obama to fix your dishwasher « Hot Air.

The Theory and Practice of Freedom

Today would have been Milton Friedman’s 102d birthday. He was perhaps the least dismal practitioner of the dismal science. Why? because he believed in freedom, not slavery or dependence on anything but yourself.

Watching him over the years, in his erudite and good-humored presentations has shaped much of my economic world view. And so to celebrate a great man’s birthday, let’s share some of that.

I suspect you will be surprised how germane to today it seems. Enjoy!

On the rights of workers

On Energy

On Money and Inflation

And finally, and maybe most importantly

What is America?



Dodging Bullets

While dodging bullets is not a recommended practice, it is considered far superior to not dodging bullets. What is he talking about?, I hear. This, apparently we got lucky last month, and missed getting hit by a good sized Coronal Mass Ejection (CME). NASA seems to think that if it had happened a week earlier, it would have made a direct hit. Could be, it has before.

Back in 1859, there was the Carrington Event, a series of powerful CMEs that were powerful enough to set off telegraph instruments all over the world, even causing them to spark and set some telegraph offices on fire. It also caused the Northern Lights as far south as Tahiti. Now the thing is, in 1859 the telegraph was about as high tech as it got, and electric/electronics technology is the most susceptible to plasma events; steam locomotives don’t care, computer controlled diesel -electric ones do.

And that’s why it matters now. In 1859 we could afford to rebuild an occasional telegraph office. Now our entire world is tied up in it. Let’s think about this a bit. The backbone of the internet may, repeat may, be somewhat resistant, given that it is fiber optic, but most of us have metallic links, either telephonic, or cable to that backbone. Satellites depend, the plasma may take them apart, (I can see a couple of ways, but don’ know enough in the field).

But the biggie here is the power grid. If you are old enough, you may remember the New York Blackout in 1965. Here is a bit from Wikipedia about it

The cause of the failure was human error that happened days before the blackout. Maintenance personnel incorrectly set a protective relay on one of the transmission lines between the Niagara generating station Sir Adam Beck Station No. 2 in Queenston, Ontario. The safety relay, which was to trip if the current exceeded the capacity of the transmission line, was set too low.

As was common on a cold November evening, power for heating, lighting and cooking was pushing the electrical system to near its peak capacity. Transmission lines heading into Southern Ontario were heavily loaded. At 5:16 p.m. Eastern Time a small surge of power coming from the Robert Moses generating plant in Lewiston, New York caused the improperly set relay to trip at far below the line’s rated capacity, disabling a main power line heading into Southern Ontario. Instantly, the power that was flowing on the tripped line transferred to the other lines, causing them to become overloaded. Their protective relays, which are designed to protect the line from overload, tripped, isolating Beck Station from all of Southern Ontario.

With no place else to go, the excess power from Beck Station then switched direction and headed east over the interconnected lines into New York State, overloading them as well and isolating the power generated in the Niagara region from the rest of the interconnected grid. The Beck generators, with no outlet for their power, were automatically shut down to prevent damage. The Robert Moses Niagara Power Plant continued to generate power, which supplied Niagara Mohawk Power Corporation customers in the metropolitan areas

But the thing is the grid in 1965 was a mechanical beast, it could cascade tripping out like it did, but men had to go around and reset many of those devices, find enough power to flash generators and sundry other tasks, that’s why it took as long as it did to get everybody back on. […]

But now, we have the super-duper computerized grid, that we can control all those protective devices from our power control centers. It is an incredible accomplishment, but nothing is perfect. I suspect that a plasma event will set up surges in these lines that will trip out overload devices, over much more territory than the northeast, because we are much more connected now. If that’s all it does, it’ll take a bit but our power will be back in a few hours or days, no big deal.

But power lines collect stray energy like nothing else, men have been killed by a lightning strike on a line a hundred miles away. What happens if that plasma event get into electronics that control the grid, or for that matter the office you work at, your house, our world really. What then? All those computers installed in your appliances are built in computer controlled factories. The food you eat comes to you on railroads and in trucks. Both are controlled by computers. So are our cars. they are all more, or less liable to damage from a surge. And a CME is the great grand-father of surges.

How long do you think it will to replace all this stuff to the level of say 1980? I’d say it will be measured in years, not months. I would also say that if you are not prepared both mentally and at least to some extent physically, you likely will not see it.

You know, we have talked about EMP attacks occasionally, this is an EMP attack on the entire world.

Or not. No one really knows.

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