Nationalism & Its Discontents: A Deep Rumination On The Meaning Of Trump

Submitted by Justin Raimondo via AntiWar.com,

At the end of the cold war, a cadre of neoconservative intellectuals surveyed the debris of the fallen Soviet colossus and boldly proclaimed “the end of history.” The West, said Francis Fukuyama, writing in The National Interest, had won not only the cold war but also the war of ideas –   for all time. We were inevitably embarked on a pathway to a “universal homogenous state,” and although the pageant of History (always capitalized!) would continue to “unfold” along a rather bumpy road, in the end it would prove to be a highway to US hegemony over the entire earth. In a symposium commenting on Fukuyama’s thesis, the ever-practical Charles Krauthammer nevertheless insisted that it would be necessary for the United States to hurry History along by force of arms. In a subsequent polemic in Foreign Affairs, he argued that we ought to take advantage of “the unipolar moment” to “integrate” the US, Japan, and Europe into a “super-sovereign” global empire united by a “new universalism” – which, he averred, “is not as outrageous as it sounds.”

Blinded by hubris, enthralled by the possibilities of unlimited power, the neocons – and their liberal internationalist doppelgangers on the other side of the political spectrum – didn’t see the nationalist backlash coming.

That rebuke was prefigured by a stinging rebuttal from the pen of Patrick J. Buchanan in the pages of The National Interest, who wrote that Krauthammer’s vision was “un-American,” pure and simple. In Buchanan’s view, this militarized universalism was nothing less than treason. Invoking the Founders, he wrote that this globalist fantasy failed “the fundamental test of any foreign policy: Americans will not die for it.” A nation’s purpose, he added, cannot be ascertained “by consulting ideologies, but by reviewing its history, by searching the hearts of its people.” So what, if not the “benevolent global hegemony” dreamt of by the neocons, would and should Americans fight for? Buchanan’s answer was to quote these stanzas from Lord Macaulay:

“And how can man die better
That facing fearful odds,
For the ashes of his fathers,
And the temples of his gods?”

Buchanan’s answer to Krauthammer’s globalism was a foreign policy of “enlightened nationalism”: “total withdrawal of US troops from Europe,” and a rejection of the idea – nowhere authorized in the Constitution – that the President and/or Congress has the power to sacrifice its sons on the altar of some crazed crusade for “global democracy.” Prophesizing the declaration of President George W. Bush some fifteen years later that we would seek to “end evil” in the world, Buchanan raised the banner of non-interventionism in the pre-9/11 world: that is, in a country that was primed to hear his message.

He took that message to the Republican party, and the country, in three campaigns for the White House, all the while warning that the “unipolar world” dreamed of by Krauthammer and his fellow neocons was a dangerous fantasy, and that the rising tide of nationalism, from Beijing to Biloxi, would make short work of it. A multi-polar world was on the horizon, and the best we could hope for was to adapt to the new reality by tending to our own garden, which had – after a long global struggle with the (alleged) Soviet threat – by this time become choked with weeds and in need of emergency care.

The same nationalist tides that were sweeping the post-cold war world in Europe and Asia were roiling the waters in America, but they took on a different shape and coloration in the wake of the 9/11 attacks. Whereas Buchananism was inward-looking, anti-interventionist, and anti-globalist, the ultra-nationalism utilized by the neocons to mobilize the American people behind a crusade to transform the Middle East was and is aggressive, militaristic, and explicitly hegemonist – a bid to create the “unipolar world” of Krauthammer’s Napoleonic imagination.

This interrupted and in effect reversed the natural tendency to return to normalcy after the decades-long cold war struggle, and at a huge price in blood and treasure. And yet eventually the pendulum swung back again, as exhaustion – both emotional and financial – set in. America elected a President who vowed to end the wars, and deal with our festering home front crisis: that promise, however was not kept, and Barack Obama will leave office with the US once again in the middle of at least three wars, and with a hand in several others on their periphery. Yet the nationalist impulse – which is, in part, an “isolationist” impulse – is stronger than ever, laying just beneath the surface of the American political landscape, waiting for someone to pick up its banner.

That someone turned out to be Donald Trump.

I have many disagreements with Trump, but unlike his many enemies on the left and especially on the right I understand that his nationalism contains elements that are  useful, instructive, and even admirable. Unlike Buchanan, he is certainly no intellectual, but then again the last intellectual to inhabit the White House – Woodrow Wilson – was an unambiguous disaster for the cause of peace and liberty, and so I don’t hold that against The Donald. There is surely a demagogic element to his astonishing rise, which his opponents – particularly those on the right – make much of. The recent jeremiad against him launched by the neocons over at National Review was filled with comparisons to Mussolini, Juan Peron, Hitler (of course!), and even Andrew Dice Clay, this latter barb a direct appeal to the smug snobbery that characterizes our urban elites. “He’s “vulgar,” he’s “rude,” etc. etc., and those were some of the gentler ways they characterized him personally.

Yet demagoguery didn’t bother them when it was deployed by George W. Bush as he marched us off to a disastrous war – a war Trump opposed, and continues to denounce today – and implied that his critics were in league with America’s enemies. “You’re either with us or you’re with the terrorists” – remember that one? Do you recall how Bush’s partisans over at National Review tried to tar conservative and libertarian opponents of the Iraq war – including this writer – as having “turned their backs on their country”? Demagoguery in the service of mass murder is fine with them: it’s only when their own methods are turned against them that the War Party starts to get religion.

Yes, Trump rose to prominence initially on the strength of his anti-immigration and protectionist stance – views he holds in common with his predecessor, Buchanan – but this doesn’t account for the hysterical opposition to his candidacy coming from the neoconservatives. National Review has been a veritable fount of anti-Muslim propaganda, with the writings of Andrew McCarthy, Mark Steyn, Kevin Williamson, and a host of others all polemicizing against the idea that terrorism is primarily due to US actions abroad and holding that the roots of Bin Ladenism lie in the nature of Islam per se. Given the logic of their longstanding position, how can they object to Trump’s proposal to temporarily ban Muslim immigration? Yet there they were, breaking Godwin’s Law and claiming that we’d be facing an American Kristallnacht if Trump gets in the White House. What chutzpah!

No, the real motive behind the neoconservative holy war against Trump is rooted in his foreign policy positions, which the neocons rightly view as a direct threat to their internationalist project. Chris Matthews is on to their game: please watch his confrontation with a neocon journalist below.

Discussing the special we-hate-Trump issue of National Review, Matthews cornered poor NR writer Eliana Johnson, who was reduced to stuttering incoherence as he hammered her on what he rightly perceived as the overarching point of unity in “that crowd” on the Trump question: “that’s why they don’t like Trump, because he’s the only guy on the right wing who said [the Iraq war was] a stupid war.” When Johnson denied this, he demanded to know who among the long list of anti-Trump “intellectuals” wasn’t a war-hawk. “Can you answer me?” he persisted. “Who is not a hawk in that group?”

 She couldn’t come up with one (although she might have stopped him by mentioning David Boaz, of the Cato Institute).

Boaz’s brief polemic, by the way, didn’t mention foreign policy: he confined his critique to references to Mussolini, George Wallace, and other comparisons seemingly ripped from the pages of Salon.com. Yet other contributors made no secret of the source of their animus. Neocon Mona Charen was appalled by Trump’s suggestion that “we let Russia fight ISIS.” Trump is “oblivious” to the “global jihad,” fumed Andrew McCarthy, angered by Trump’s vow to “stay out of the [Syrian] fray (leaving it in Vladimir Putin’s nefarious hands).” Bill Kristol was one of the signers, a man whose key role in ginning up the Iraq war is well-known to my readers.

A recent piece in Politico was more explicit about the danger Trump poses to the internationalist-interventionist consensus that reigns supreme in the Washington Beltway:

“One of the most common misconceptions about Donald Trump is that he is opportunistic and makes up his views as he goes along. But a careful reading of some of Trump’s statements over three decades shows that he has a remarkably coherent and consistent worldview, one that is unlikely to change much if he’s elected president. It is also a worldview that makes a great leap backward in history, embracing antiquated notions of power that haven’t been prevalent since prior to World War II.

 

“It is easy to poke fun at many of Trump’s foreign-policy notions – the promises to “take” Iraq’s oil, to extract a kind of imperial ‘tribute’ from U.S. military allies like South Korea, his eagerness to emulate the Great Wall of China along the border with Mexico, and his embrace of old-style strongmen like Vladimir Putin. But many of these views would have found favor in pre-World War II – and even, in some cases, 19th century – America.

 

”In sum, Trump believes that America gets a raw deal from the liberal international order it helped to create and has led since World War II. He has three key arguments that he returns to time and again over the past 30 years. He is deeply unhappy with America’s military alliances and feels the United States is overcommitted around the world. He feels that America is disadvantaged by the global economy. And he is sympathetic to authoritarian strongmen. Trump seeks nothing less than ending the U.S.-led liberal order and freeing America from its international commitments.”

All this is heresy in the circles in which the author – Thomas Wright, director of the Project on International Order and Strategy at The Brookings Institution – travels. Brookings is in hock to the Gulf emirate of Qatar to the tune of $14.8 million, according to the New York Times. This accounts for Wright’s discomfort with The Donald’s view of America’s expensive and often tragic commitments to defending other nations “that would be wiped off the face of the earth if not for us,” as the former real estate mogul puts it.

Wright’s characterization of Trump’s attitude toward Putin as an “embrace” is a typical ploy by the War Party, which always portrays a non-belligerent stance as a love affair: what Trump actually said, however, is that “I could get along with Putin” – a definite no-no in Washington, where the new cold war is raging on both sides of the aisle. Contrast this with the position taken by most of the other GOP candidates, such as Christie, Rubio, and Bush, who proudly proclaim they’d confront Russian planes in the skies over Syria, risking World War III.

Examining Trump’s foreign policy pronouncements over the years – the GOP frontrunner wonders why we are stationing 28,000 troops in South Korea, complains that we’re defending Japan while they slap tariffs on our products, and says we have no business stationing tens of thousands of soldiers in Europe, which can damn well take care of itself – Wright trots out the hate figures interventionists love to excoriate. Trump is like Robert A. Taft, who didn’t want us to join NATO: he’s like Charles Lindbergh, a leader of the anti-interventionist America First Committee, a particular hate-figure of the interventionist-neocon foreign policy Establishment. And, of course, Trump is an “isolationist,” because he’s sick of coddling our shiftless “allies” while they rip us off and laugh at us behind our back, all the while huddling under the protective wingspan of the American eagle.

All of this is no doubt reassuring to Wright’s Qatari paymasters, who have a lot to lose if Trump should win the White House and present them with a bill for services rendered. But in reading Wright’s list of Trumpist foreign policy heresies, one can’t help but think that the average American would agree with each and every one of The Donald’s complaints about the profligate paternalism involved in maintaining this precious “international order” Wright would have us enforce for free. He maintains that “those alliances also work to America’s benefit by providing it with prepositioned forces and regional stability. It would actually cost more to station troops in the United States and have to deploy them overseas in a crisis.” But his rationale is a classic example of circular reasoning: he assumes it is our sacred duty to intervene everywhere. A “crisis,” for him, is the possibility that the Emir of Qatar will lose his throne, or that the Saudis will one day be confronted with the consequences of their inveterate barbarism. Ordinary Americans – i.e. Trump supporters – would consider that turn of events a comeuppance waiting to happen.

“Tax these wealthy nations,” says Trump, “not America” – a prospect that no doubt horrifies Wright and his foreign sponsors, but delights Americans to no end. Which is precisely why Trumpian nationalism has such resonance this election season.

In Wright’s view, Trump is not only unduly rude to our alleged “friends,” he is far too friendly to our alleged enemies, i.e. Russia and China. Wright admits, parenthetically, that these two pose no threat to the American homeland, but rather to “the US-led order,” i.e. the albatross of our global empire, where – as the Old Right writer Garet Garrett put it – “everything goes out and nothing comes in.”

As is routine for our war propagandists, Wright accuses Trump of having a soft spot for authoritarian leaders. Since Trump doesn’t want to threaten Putin and the Chinese with regime-change, this must mean he admires – and even wants to emulate – their domestic policies. It’s an absurd position to take, and, not coincidentally, the very same illogic that led to the Iraq war. “He’s killing his own people,” went the refrain about Saddam Hussein – and if you didn’t favor regime-change in Iraq, that must mean you approved of Saddam’s dictatorship. We can see where that line “reasoning” led, but Wright and his fellow policy wonks haven’t learned that lesson even if the American people have.

Wright gleefully cites Putin’s comments on Trump:

“He says he wants to move on to a new, more substantial relationship, a deeper relationship with Russia, how can we not welcome that? Of course we welcome that.”

This horrifies Wright, but what is wrong with getting along with the leader of the Russian state – a person who has at his command thousands of nuclear weapons and has often expressed wonderment at Washington’s rebuke of every attempt at rapprochement? With the threat of a new arms race looming large and a new cold war on the horizon, the biggest danger to international peace is our deteriorating relations with Russia. Trump realizes this: Wright, not so much. And the American people are behind Trump in this: asked by pollsters if we should get involved in a dispute with Russia over Ukraine, the overwhelming answer was a resounding “No!”

“It’s not hard to imagine these two men sitting down to cut a deal,” says Wright, but surely cutting a deal to reduce the nuclear arsenals of both nations and resume cooperation in tracking down “loose nukes” floating around the former Soviet Union is a good thing. Except it isn’t a good thing as far as our new Cold Warriors are concerned. Wright derides Putin and Trump for holding an “antiquated” view of world politics, but what could be more antiquated than launching another cold war with Russia – a quarter century after the fall of the Soviet Union?

As for China, Wright is at his wit’s end because Trump seems unconcerned with “its attempts to blunt US power projection capabilities or its repression at home.” And yet “power projection” is just another word for military aggression, which is bound to provoke a response from the highly nationalistic Chinese. Are we supposed to go to war over the Spratly Islands and a collection of artificial atolls in the South China Sea – thousands of  miles away from American shores? Seriously? Wright pretends to be concerned about China’s repressive domestic policies, but threatening behavior on our part will only empower the sclerotic leaders of the Chinese Communist Party and strengthen their position domestically. Wright fails to understand the power of rising nationalism abroad, just as he disdains its manifestations here in America.

It’s almost funny how Wright portrays the threat to his treasured “US-led order”:

“There will be massive uncertainty around America’s commitments. Would Trump defend the Baltics? Would he defend the Senkaku Islands? Or Saudi Arabia? Some nations will give in to China, Russia and Iran. Others, like Japan, will push back, perhaps by acquiring nuclear weapons. Trump may well see such uncertainty as a positive. Putting everything in play would give him great leverage. But by undoing the work of Truman and his secretary of state, Dean Acheson, it would be the end of the American era.”

The idea that Putin is raring to gobble up the Baltics is one of the cold warriors’ talking points, but it is absurd on its face: does he really think Putin is dumb enough to replicate the US invasion of Iraq in a European setting? Don’t make me laugh. Crimea wanted union with Russia, and that’s what the Crimeans got: given the way Ukraine is being governed, who can blame them? But it is sheer fiction to imagine that Putin wants to recreate the Warsaw Pact: he is playing defense to NATO’s game of offense.

As for the Senkaku Islands – what in the name of all that’s holy is the US interest in defending these useless atolls? Are we supposed to go to war with China over these five uninhabited specks – which are also claimed by Taiwan, our ally? Let’s take a national poll over that burning question: I can guarantee you the answer in advance.

“To understand Trump, in the end, we have to go back to Taft and Lindbergh,” avers Wright, and in this he is absolutely correct. It’s a pity some of my libertarian friends fail to see this, but they are blinded by cultural factors and held captive by political correctness: immigration matters more to them than foreign policy. What they don’t understand is that the question of war and peace is the central issue of modern times. They fail to appreciate the foreign policy paradigm shift represented by Trump’s political success. However, Wright does understand it, along with his neoconservative comrades over at National Review and the Weekly Standard.

For Wright, Trump is Taft and Lindbergh all rolled up into one:

“The difference is that, unlike Trump, Taft was not outside the mainstream of his time. Many people believed America was safe and that it did not matter who ran Europe. Also, unlike Trump, Taft was boring and struggled to break through the noise in several nomination battles. The more bombastic and controversial figure was Lindbergh, the man who became a household name as the first person to fly across the Atlantic. Lindbergh led a national movement that was divisive, xenophobic and sympathetic to Nazi Germany.”

Of course, the America First antiwar movement, which opposed US entry into the European war, reflected the overwhelming majority sentiment of the American people, who opposed intervention before Pearl Harbor. So what Wright is saying is that most Americans in the year 1940 were “sympathetic to Nazi Germany.” This was the line of the Communist Party at the time, which – along with the Party’s liberal-left fellow-travelers – was eager to see us get into the war in order to save Stalin’s bacon. That this nonsense is now gospel among the foreign policy mavens who inhabit the corridors of power in Washington should tell us everything we need to know about what’s wrong in the Imperial City.

What scares Wright – and the Establishment of both parties – is that Trump is changing what it means to be “mainstream.” When Lindsey Graham, who wants to invade Syria, Iraq, Iran, and Ukraine – for a start – gets less than 1 percent in the polls, and Trump gets 40 percent, the War Party panics. As well they should. I for one take enormous pleasure in imbibing the naked fear Wright and his fellow warmongering wonks exude as the triumph of Trump approaches. Here is Wright, shaking in his boots:

“The Republican primary of 2016 is shaping up to be the most important party primary since 1940. Lindbergh did not run, of course. But Taft was in with a strong chance. Only the fact that the field was badly divided created an unexpected opening for Wendell Willkie, an internationalist, to emerge as the nominee at the convention. Some of Roosevelt’s advisers were so relieved at Willkie’s nomination that they advised their boss he no longer had to run for an unprecedented – and controversial – third term.”

Ah, but this time there will be no Wilkie – imposed by the Eastern Establishment after Taft’s delegates were disqualified by party bosses – to save the internationalists from the fate they so richly deserve. And that’s what has Wright in a panic:

“The reason we must revisit 1940 is that Republicans have struggled to find a new north star after Iraq. Except for Rand Paul – whose own brand of libertarian isolationism, unlike Trump’s, didn’t sit well with voters – the establishment candidates were not sure whether they still supported Bush 43’s strategy or opposed it. Most tried to muddle through with a critique of President Barack Obama. Marco Rubio stuck to the ambitious Bush 43 approach but found a declining market. Some, like Ted Cruz, tried to deal with the shift in sentiment by cozying up to pro-American dictators and abandoning support for democracy promotion. Cruz even used the isolationist term America First to describe his foreign policy. But Cruz seems to have thought little and said even less about America’s global role outside the Middle East. Ironically for someone with the reputation of being exceptionally smart, he lacks Trump’s detail and substance.”

Poor Wright! The combined poll numbers of the two top candidates for the GOP presidential nomination – one of whom is hated by the neocons, and the other who has openly attacked the neocons – equal over half of Republican primary voters. And the most consistently “isolationist” of the top two is the frontrunner, with his poll numbers rising with every effort to dislodge him. You’ll pardon me if I indulge the temptation to chortle in print: I haven’t had this much fun since Buchanan toppled King George off his pedestal in New Hampshire and declared war on the “New World Order.”

“It is in this vacuum that the long-dormant Taftian foreign policy has made an unexpected comeback in the hands of Trump,” says Wright, in despair. “What happens next is anybody’s guess.”

What’s an internationalist to do when the rising tide of American nationalism washes over his foreign-subsidized sandcastle? Cry? Write long articles for Politico? Perhaps both.

I have to say, however, that Trump is hardly the consistent “isolationist” Wright portrays in his piece. He is flighty, and therefore unpredictable. Although his views on trade limn (somewhat) those of the late Chalmers Johnson, who saw the American empire as a tradeoff between Washington and its overseas clients – we would lift trade barriers if they allowed us to station troops on their soil – Trump lacks Johnson’s intellectual solidity, to say the least. Slapping tariffs on Chinese goods would start a trade war that would be disastrous for us, and the world. In short, I don’t give one iota of political support to Trump because he is simply not to be trusted. If he overcomes the odds and does win the White House, “what happens next is anybody’s guess,” as Wright puts it.

Yet Trump’s personal shortcomings are beside the point. The lesson to be taken from this episode is the centrality of foreign policy in the political life of our country. The doggedness with which the internationalists are attacking Trump, the nature of their criticisms, and the viciousness of their tactics is an indication of how hard it will be to dislodge them – just as Trump’s popularity shows how eager Americans are to hear someone tell them that we don’t have to continue being the policeman of the world, and that we’re paying through the nose for something that doesn’t benefit us in the least (although it does benefit outfits like the Brookings Institution, which takes in millions from its foreign sponsors). No matter how inconsistent and even obnoxious Trump may be – and his crazy plan to deport millions of undocumented immigrants is certainly a noxious fantasy that will never happen no matter who is elected – it would be a mistake to dismiss him as a random anomaly, or as a “fascist” demagogue as some of the more brainless libertarians have done.

The meaning of Trumpism is that Americans want to rid themselves of the burden of empire: Wright is right about that. Trump’s rise augurs a seismic shift in the foreign policy debate in this country, marking the end of the interventionist consensus that dominates both parties. And it certainly means the final defeat and humiliation of the neoconservatives, who are busy spewing vitriol at him and his “plebeian” supporters. And that alone is worth whatever price we have to pay for the triumph of Trump. For the neocons are the very core of the War Party: their demise as a politically effective force inside the GOP is an event that every person who wants a more peaceful world has been longing for and should celebrate.

When the Republican-controlled Congress in the Clinton era threatened to pull the funding from Bill Clinton’s war in the former Yugoslavia, Bill Kristol threatened to walk out of the GOP. Today, as Trump appears to be the likely Republican presidential nominee, Kristol is threatening to start his own party. Which strikes me as a brilliant ploy: let him run Lindsey Graham as the candidate of the aptly-named War Party – and when America’s foremost warmonger does worse than he did in the primaries, let the chickenhawk-in-chief contemplate the majesty of cosmic justice.


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25 Years Of Fed Fueled M&A – The Enabling Of A Banking Oligopoly

The “Big Four” retail banks in the United States collectively hold 45% of all customer bank deposits for a total of $4.6 trillion.

The fifth biggest retail bank, U.S. Bancorp, is nothing to sneeze at, either. It’s got 3,151 banking offices and employs 65,000 people. However, it still pales in comparison with the Big Four, holding only a mere $271 billion in deposits.

Today’s visualization from VisualCapitalist.com's Jeff Desjardins, looks at consolidation in the banking industry over the course of two decades. Between 1990 and 2010, eventually 37 banks would become JP Morgan Chase, Bank of America, Wells Fargo, and Citigroup.

 

Courtesy of: Visual Capitalist

 

Of particular importance to note is the frequency of consolidation during the 2008 Financial Crisis, when the Big Four were able to gobble up weaker competitors that were overexposed to subprime mortgages. Washington Mutual, Bear Stearns, Countrywide Financial, Merrill Lynch, and Wachovia were all acquired during this time under great duress.

The Big Four is not likely to be challenged anytime soon. In fact, the Federal Reserve has noted in a 2014 paper that the number of new bank charters has basically dropped to zero.

New bank charters

From 2009 to 2013, only seven new banks were formed.

“This dramatic reduction in new bank charters could be a concern for policymakers, if as some suggest, the decline has been caused by increased regulatory burden imposed in response to the financial crisis,” the authors of the Federal Reserve paper write.

Competition from small banks has dried up as a result. A study by George Mason University found that over the last 15 years, the amount of small banks in the country has decreased by -28%.

Number of large vs. small banks over 15 years

Big banks, on the other hand, are doing relatively quite well. There are now 33% more big banks today than there were in 2000.


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Walmart, Other Corporations Are Donating Water Bottles to Flint: Guess Who Can’t Stand That

FlintHeartless, profit-driven corporations like Walmart, Coca-Cola, Pepsi Co., and Nestle have pledged to donate millions of water bottles to the people of Flint, Michigan. Meanwhile, government officials are still pointing figures and trying to figure out which state or local agency screwed up and allowed city residents to consume toxic water for months.

According to The Atlantic’s David Graham (emphasis mine):

That these firms are stepping up to deliver water is good news for Flint’s schools and citizens in the immediate term. But a one-time infusion of gallons of fresh water doesn’t do much to address the systemic failures of government that led to the water crisis in the first place. By making four for-profit corporations into a de facto public utility, the gift might actually risk making things worse in the long run.

Wait, what? How could the gift be a bad thing? Graham elaborates:

Walmart, Coca-Cola, Nestlé, and Pepsi aren’t just charitable organizations that might have their own ideologies. They’re for-profit companies. And by providing water to the public schools for the remainder of the year, the four companies have effectively supplanted the local water authorities and made themselves an indispensable public utility, but without any amount of public regulation or local accountability. Many people in Flint may want government to work better, but with sufficient donations, they may find that the private sector has supplanted many of government’s functions altogether.

Let me get this straight: when corporations put profits first, they are accused of undermining social institutions with their greed—when they unquestionable put people first… they are also accused of undermining social institutions!

In any case, it’s worth asking whether the private sector supplanting government functions is actually a bad thing. Despite what liberals like Dana Milbank and Katrina vanden Heuvel think, privatization and austerity are not the causes of the Flint water crisis: government mismanagement, regulatory failure, and Keynesiasn fiscal stimulus are. If the private sector can deliver affordable, clean water to Flint, why shouldn’t people prefer it? Is government-managed delivery of public goods really an absolute moral necessity, even if the government is bad at delivering said public goods?

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Ammon Bundy Reportedly Arrested; Shots Allegedly Fired

Details are still sketchy, but given the that the news cycle is once again all about Donald Trump, it’s worth putting out now so it doesn’t get lost. From CNN:

Federal authorities arrested Ammon Bundy, the leader of a group of protesters occupying a federal wildlife refuge in Oregon, during a traffic stop Tuesday, a law enforcement official told CNN.

Up to eight of Bundy’s followers were detained, the source said.

Shots were fired after authorities made the stop, according to the source. It’s not clear who fired first.

A nearby hospital is on lockdown and a helicopter was deployed out to the scene, but it’s still not clear whether anybody was actually shot, hence the passive voice.

Previous Reason coverage about the situation in Oregon here

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The Luxury Housing Bubble Pops

Submitted by Mike Krieger via Liberty Blitzkrieg blog,

It appears the music may have finally stopped for one of the world’s largest luxury real estate bubbles: London.

 

It’s well known that foreign oligarchs love London real estate as a means to launder funds, typically “earned” by soaking their host countries dry via corruption and fraud. This has caused absurd and irrational spikes in high-end residential real estate in the English capital, as well as a flood of new construction.

 

With emerging markets now completely collapsing, the seemingly endless flood of foreign money is drying up, and with it, London real estate.

 

So has the London real estate bubble popped? Probably.

 

– From the September 9, 2015 article: Luxury London Home Sales Plunge 26% – Has this Mega Real Estate Bubble Finally Burst?

The first real signs that the global luxury home price bubble had popped emerged last fall in the world’s capital of oligarch money laundering: London.

Since then, we have seen weakness in high end Manhattan real estate, but the trend has now spread and is starting to make itself apparent all over the place.

Yesterday’s Bloomberg article titled,The Surge in U.S. Mansion Prices Is Now Over, is really interesting. Here are a few choice excerpts:

The six-bedroom mansion in the shadow of Southern California’s Sierra Madre Mountains has lime trees and a swimming pool, tennis courts and a sauna — the kind of place that would have sold quickly just a year ago, according to real estate agent Kanney Zhang.

 

Not now.

 

Zhang is shopping it for a discounted $3.68 million, but nobody’s biting. Her clients, a couple from China, are getting anxious. They’re the kind of well-heeled international investors who fueled a four-year luxury real estate boom that helped pull America out of its worst housing slump since the 1930s. Now the couple is reeling from the selloff in the Chinese stock market and looking to raise cash to shore up finances.

 

Prices for the top 5 percent of U.S. real estate transactions remained flat in 2015 while all other houses gained 4.9 percent, according to data from Redfin Corp., a real estate brokerage and data provider.

Pretty powerful chart:

Screen Shot 2016-01-26 at 10.29.34 AM

In the Los Angeles suburb of Arcadia, where Zhang is struggling to sell the six-bedroom home, dozens of aging ranch houses were demolished to make way for 38 mansions built with Chinese buyers in mind. They have manicured lawns and wok kitchens and are priced as high as $12 million. Many of them sit empty because the prices are out of the range of most domestic buyers, said Re/Max broker Rudy Kusuma, who blames a crackdown by the Chinese on large sums leaving the country.

Arcadia…where have we heard that before. Oh yeah: Welcome to Arcadia – The California Suburb Where Wealthy Chinese Criminals are Building Mansions to Stash Cash

The stronger dollar is driving South American buyers away from the 23,000 condos in the pipeline for Miami’s downtown area, said Peter Zalewski, owner of South Florida development tracker CraneSpotters.com. Buyers signed about one-fourth fewer pre-construction contracts last year than in 2014, according to Anthony M. Graziano, senior managing director at Integra Realty Resources Inc., which tracks condo data for the Miami Downtown Development Authority.

 

In nearby Sunny Isles, Florida, faraway currency fluctuations are endangering the sale of a $3.7 million condominium. A Colombian woman who put down a 50 percent deposit is fretting over how she’ll cover the other half over the next year, said her agent, Mauricio Rojas. The Colombian peso, dragged down by the commodity slump, has lost about 30 percent of its value since she signed the contract in December 2014.

 

In Houston, the plunge in oil prices to a 12-year low is killing the luxury boom. Sales for homes priced at $500,000 or more dropped 17 percent in December from a year earlier, according to the Houston Association of Realtors.

 

Manhattan resale prices for the top 20 percent of the market peaked in February and have fallen every month since, according to an analysis through October by listings website StreetEasy.

I covered the emerging weakness in Manhattan a couple of weeks ago.

See: Manhattan Luxury Real Estate Peaked Last February – Prices Now Down 8 Months in a Row.

The economic turmoil, along with new regulations, slowed demand around the world. In London, the market weakened after the government increased a stamp-duty sales tax and Russians and Chinese buyers began pulling back. Luxury prices in London rose only 1 percent last year after jumping 5.1 percent in 2014, according to Knight Frank research.

Here are three previously published  articles on London:

Tens of Thousands of Properties to Be “Dumped” on London Real Estate Market by 2017

Luxury London Real Estate Prices Plunge 11.5% Year-Over-Year

Luxury London Home Sales Plunge 26% – Has this Mega Real Estate Bubble Finally Burst?

Considering the global luxury real estate market is one of the most inflated asset bubbles on earth, current weakness could pretty quickly turn into a crash.


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US, China Stocks Tumble After Industrial Profits Plunge

Dow futures are down 100 points and Chinese stocks are pressing new 14-month lows, extending last night’s carnage after Chinese Industrial Profits tumbled. With a dismal 4.7% drop year-over-year, led by a near 60% collapse in the mining industry, early strength (after some jawboning from Abe) gave way to fresh lows and US equity futures are also responding. Offshore Yuan refuses to drop since Xinhua wrote a 3rd hit piece against George Soros and his “speculative snap profits.”

 

 

This year is just getting uglier…

 

Offshore Yuan has been interfered with twice now in the last 24 hours as Xinhua unleahes its 3rd hit piece against George Soros and his speculative ilk…

So why do speculators make claims that run counter to reality? Analysts said it is because either the short-sellers haven’t done their homework or that they are intentionally trying to create panic to snap profits.   

However, it seems the selling pressure is persisting no matter how hard they try to hold it…

US equity futures are also under pressure as early oil weakness coupled with AAPL’s plunge after hours was not helped by China weakness…


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36 WTF Quotes From The Davos Bubble Chamber

As the deaf, dumb, and blind kids of the world's elite gathered in Davos to mutually masturbate over their own success, and generously drop some breadcrumbs of hope for the rest of the world, The World Economic Forum unleashed the followingg 36 quotes to sum it all up

Session: The Global Economic Outlook

Session: The Future of Growth: Technology-Driven, Human-Centred

Session: The Transformation of Tomorrow

Session: The Canadian Opportunity

Session: A New Climate For Doing Business

Facebook Live Chat: Questions to John Green From Davos

Session: Press Conference with the Co-Chairs of the Annual Meeting 2016

Session: The Digital Transformation of Industries

Session: The Digital Transformation of Industries

Session: Press Conference with the Co-Chairs of the Annual Meeting 2016

Session: The Transformation of Finance

Session: The 21st-Century Dream

Session: The Future of Europe

Session: Where is the Chinese Economy Heading?

Session: Reuniting Cyprus

Session: Reuniting Cyprus

Session: The Future of Europe

Session: Britain in the World

Session: Special Conversation with Benjamin Netanyahu

Session: The New Climate and Development Imperative

Session: The New Climate and Development Imperative

Session: How to Reboot the Global Economy?

Session: What If: Robots Go to War?

Session: The New Climate and Development Imperative

Session: Where Is the Chinese Economy Heading?

Session: The Canadian Opportunity

Session: Progress towards Parity

 

Session: An Insight, An Idea with Kevin Spacey

Blog: Emma Watson in Davos

Session: Securing the Middle East and North Africa

Session: Europe at a Tipping Point

Session: Special Address with John F. Kerry

Session: What If: Your Brain Confesses?

Session: The Global Security Outlook

 

*  *  *

So in summary: rose-colored glasses, better times ahead, inequality, women, internet of things, and volatility is good (as is greed).


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Capital Controls Are Coming

Submitted by Nick Giambruno via CaseyResearch.com,

The carnage always comes by surprise, often on an otherwise ordinary Saturday morning…

The government declares a surprise bank holiday. It shuts all the banks. It imposes capital controls to stop citizens from taking their money out of the country. Cash-sniffing dogs, which make drug-sniffing dogs look friendly, show up at airports.

At that point, the government is free to help itself to as much of the country’s wealth as it wants. It’s an all-you-can-steal buffet.

This story has recently played out in Greece, Cyprus, Argentina, and Iceland. And those are only a few recent examples. It’s happened in scores of other countries throughout history. And I think it’s inevitable in the U.S.

I believe the U.S. dollar will lose its role as the world’s premier reserve currency. When that happens, capital controls are sure to follow.

This is why it’s crucial to your financial future to understand what capital controls are, how they are used, and what you can do to protect yourself.

Why Governments Impose Capital Controls

Think of the government as a thief trying to steal your wallet as you (understandably) try to run away. With capital controls, the thief is trying to block all the exits so you can’t reach safe ground.

A government only uses capital controls when it’s desperate…when it can no longer borrow, inflate the currency, tax, or steal money in one of the “normal” ways.

In most cases, governments use capital controls in severe crises. Think financial and banking collapses, wars, or chronic economic problems. In other cases, they’re just a way to control people. It’s much more difficult to leave a country when you can’t take your money with you.

Regardless of the initial catalyst, capital controls help a government trap money within its borders. This way, it has more money to confiscate.

As strange as it sounds, capital controls are often politically popular. For one, they are a way for a government to convince people it’s “doing something.” The average person loves that.

Two, a government can usually convince people that moving money offshore or investing in foreign assets is only for rich tax evaders or the unpatriotic. If freedom and private property matter to you at all, you know that’s obviously false.

How It Happens

For the unprepared, it’s like a mugging…

To be effective, capital controls have to be a surprise. Alerting people in advance would defeat the purpose. Weekends and holidays are the perfect time to catch people off guard.

Here are the four most common forms of capital controls:

1. “Official” Currency Exchange Rates

The government’s official rate for converting foreign currency to local currency is always less favorable than the black market rate (more accurately called the free market rate).

 

This applies to official prices for gold, too.

 

Getting the more favorable black market rate usually involves informal transactions on the street. Of course, this is technically illegal.

 

However, should you follow the law and exchange money at the official rate, it amounts to a wealth transfer from you to the government. The wealth transfer equals the difference between the free market rate and the official rate. It’s a form of implicit taxation.

 

2. Explicit Taxation

A government might impose explicit taxes to discourage you from buying foreign investments, foreign currencies, or gold. India tried this a few years ago by imposing a 10% tax on gold imports.

 

Another tactic is taxing money transfers out of the country…say 20% on any amount transferred to a foreign account. In this case, you could still move your money, but it would cost you.

Governments want you to hold your wealth inside the country and in the local currency. Ultimately, this makes it easier for them to tax, confiscate, or devalue with inflation.

 

3. Restrictions and Regulations

A government might restrict how much foreign currency or gold you can own, import, or export. It might require you to get permission to take a certain amount of money out of the country. The cap is often only a couple thousand dollars.

 

4. Outright Prohibition

This is the most severe form of capital control. Sometimes a government explicitly prohibits the ownership of foreign currencies, foreign bank accounts, foreign assets, or gold, or the moving of any form of wealth outside the country.

Capital Controls in the U.S.

The U.S. government has used capital controls before. In 1933, through Executive Order 6102, President Roosevelt forced Americans to exchange their gold for U.S. dollars. It’s no surprise that the official government exchange rate was unfavorable. The U.S. government continued to prohibit private ownership of gold bullion until 1974.

Today, with no conceivable end to the U.S. government’s runaway spending, sky-high debt, and careless money printing, I think it’s only a matter of time until the government decides capital controls are the “solution.” There’s no doubt statist economists like Paul Krugman would cheer it. All it would take is the stroke of the president’s pen on a new executive order.

Whatever the catalyst, it’s critical to prepare while there’s still time.

What Could Happen if You’re Too Late

Capital controls are almost always a prelude to something worse. It might be a currency devaluation, a so-called “stability levy,” or a bail-in.

Whatever the government and mainstream media call it, capital controls are a way to trap your money so it is easier to steal. Anything they don’t steal immediately, they box in for future thefts.

What You Can Do About It

The solution is simple.

Place some of your savings outside your home country by setting up a foreign bank account.

That way, no one can easily confiscate, freeze, or devalue your savings at the drop of a hat. A foreign bank account will help ensure that you have access to your money when you need it the most.

Despite what you may hear, obtaining a foreign bank account is completely legal. It’s not about tax evasion or other illegal activities. It’s simply about legally diversifying your political risk by putting your liquid savings in sound, well-capitalized institutions.

It’s becoming harder and harder to open a foreign bank account. Soon, it could be impossible. It’s important to act sooner rather than later – even if you don’t plan to use the account immediately.

Even without capital controls, it still makes sense to move some of your savings to a foreign bank where it can be kept safe.

Be sure to check out our comprehensive video on foreign bank accounts, where we share our favorite banks and jurisdictions. The video includes crucial information on the few jurisdictions that still accept American clients and allow them to open accounts remotely with small minimums.

 

 


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The Best Performing ‘Currency’ Of The 21st Century Is…

Since the beginning of the 21st Century, as people awoke to Y2K that did not end the world, there has been one 'currency' that has outperformed all its peers in terms of preserving wealth and maintaining purchasing power…

The barbarous relic…

 

Source: Sharelynx


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Rand Paul: In The Final Pre-Iowa Debate, and Optimistic About Iowa

It’s official: Sen. Rand Paul (R-Ky.) has qualified by his rising poll numbers to appear in this Thursday’s Fox-sponsored Republican presidential candidate debate, the last before the first votes of election 2016 are cast in Iowa on Feb. 1.

While Paul is in, frontrunner Donald Trump is saying today that, because he feels Fox isn’t treating him fairly, he will be out.

Paul hosted a telephone press conference this afternoon in which he talked about the debate and other things. Some highlights:

• Naturally, he still thinks he can do very well in Iowa. When the news he’d made the Fox debate was official, Paul says, in his Des Moines campaign office “100 young men and women making phone calls were jumping up and down and screaming, excited.” He brags his operation has made around 750,000 calls for him so far, and he’s got over 1,000 precinct chairman (who help gin up local get out the vote and speak for his candidacy at Iowa’s strangely intimate caucus meetings where votes occur).

He is also bouyed by the idea that some polls show up to 39 percent still undecided, leaving everything way more up in the air, he believes, than straight poll reporting would indicate. Current dominant polls, he argues, are based on belief in a turnout nearly three times higher than typical, leading him to question their accuracy.

Paul also pointed out in answer to a question from me about how he expects to do with evangelicals—widely credited with causing the huge and unexpected Rick Santorum surge in 2012 that took him from zero to hero over the course of just about a week—that “one interesting thing, when most polling asks who you voted for in 2012, the last Des Moines Register poll did recently, had five percent estimated Ron Paul vote.”

Since Ron Paul actually got nearly 22 percent in 2012, it could be that the “Paul vote” is being grossly underpolled. While Rand Paul treated the evangelical question as seemingly less important, he did say he thinks that because “I’m a big defender of religious liberty, conservative personally, I think we have a great chance of getting our share of the evangelical” vote.

Regarding getting back into the main debate, Paul says he always knew he was a top-tier candidate, and that his winning his way back shows the wisdom of his refusal to let himself be framed as an also-ran in the undercard debate last time. In the end, the bulk of his hopes for Iowa do rely on the young: “We are on the upswing with most polls in Iowa and that’s a good place to be; we’re rising at just the right time and we see if we motivate the youth vote, not counted in polling, we could be in for a surprise in Iowa.”

• Paul believes he has a great chance to distinguish himself on the debate stage Thursday as the only true conservative. “The most important thing is I’m the only fiscal conservative on stage” because you “can’t be conservative if you are liberal with military spending” and that he’s the only one for holding the line on both military and domestic spending.

He pokes at fellow candidates and senators Marco Rubio (Fla.) and Ted Cruz (Texas) for supporting $200 billion in military spending hikes with no offsets. Paul posits there could be as much as $100 billion in pure waste in current military spending, and “very few voices are talking about that.” He believes that positioning himself as the only fiscal conservative on stage can work for him. 

• Paul thinks fellow senator Ted Cruz is a crummy liberty candidate, and is confident that that wing of the Party still belongs to him. Cruz, Paul says, will ultimately face the “authenticity” dilemma with the liberty Republican wing. “They are big supporters of Audit the Fed” and Cruz failed to show up for that vote. Cruz’s response to Rubio in an earlier debate about wanting the National Security Agency to collect “100 percent of our cell phone data—most in the liberty movement are not interested in government collecting any cell phone data much less 100 percent.” Paul thinks Cruz has equivocated too much on ethanol, being anti-mandate but willing to let it continue for a while longer. Paul thinks that current polling regarding the gap between him and Cruz (and Trump) might be “way off, not 5 percent off, but 10-15 percent.

• Paul is not worried about his just-announced Senate race challenge from Lexington Mayor Jim Gray and doesn’t think that suddenly having competition for that re-election race means he has to give less attention to the presidential. He’s satisfied he’s held up his end as a senator for the people of Kentucky even while running for president, noting that he’s in D.C. even as he spoke to us and “will be here to vote tomorrow” before leaving on a late flight tomorrow.

“People of Kentucky elected me because I’m conservative, I work hard on balancing the budget, I turned back $2 million from my own office budget to help the Treasury and give back to the taxpayer.” Paul believes that it’s good for Kentucky and its interests to have their senator be a live and active voice in the national presidential campaign.

• He’s concerned, vis a vis D.C. and its carry laws, that if a Charlie Hebdo type terror event happens in D.C., that the citizenry won’t necessarily be prepared for effective armed self defense, noting that even police often call for citizens to, if they see ongoing public gun chaos, to try to “take down” the bad guys. “Until we can make violence go away,” something he hopes for but knows is unlikely, “we need to figure how to defend ourselves.”

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