Category: zerohedge

In an unprecedented move that possibly foreshadows similar charges from the US DOJ – and lots of headaches for the “recently retired” Lloyd Blankfein – the Malaysian attorney general has filed criminal charges against Goldman Sachs – targeting two of the investment bank’s Asian subsidiaries and two former Goldman bankers who have already been charged by the US (former Southeast Asia head Tim Leissner and banker Roger Ng), accusing the investment bank of violating the country’s securities laws by lying in bond agreements for three deals that raised $6.5 billion for 1MDB, a Malaysian sovereign wealth fund formed under former Prime Minister Najib Razak that US authorities believe was looted for upwards of $4 billion by corrupt bankers and officials.

While authorities in Singapore, Switzerland and elsewhere had already filed criminal charges against various banks involved with the scandal last year, the first charges against Goldman and its employees over their involvement in the scandal materialized two months ago when the DOJ indicted Leissner and Ng.

Shortly after the indictments, media reports revealed that senior Goldman executives – most notably, former CEO Lloyd Blankfein – were involved with the transactions. Blankfein attended at least three meetings with either Razak or disgraced Malaysian financier Jho Low, the allegedly corrupt financier who was also indicted by Malaysian authorities on Monday, even inviting Low to a private sit down at Goldman’s 200 West Street headquarters. While pursuing the deal, Goldman employees – including Blankfein – brushed aside concerns raised by the bank’s compliance department, and allowed Low to function as an unofficial intermediary between the bank and the Malaysian government, despite the bank’s compliance department warning that Low was not to be trusted. The DOJ is also reportedly looking into the role of other senior Goldman bankers.

The charges followed reports over the weekend claiming that former senior Goldman employees believe 1MDB could tarnish Blankfein’s legacy for reviving the bank’s reputation following a massive 2010 settlement for abuses related to its sales of mortgage bonds before the financial crisis. Commenting on the 1MDB deals, one executive said “something doesn’t smell right” and questioned how they managed to get past compliance.

“We believe these charges are misdirected, will vigorously defend them and look forward to the opportunity to present our case. The firm continues to cooperate with all authorities investigating these matters,” Goldman said in a statement to the Wall Street Journal.

In a statement to the Financial Times, Tommy Thomas, Malaysia’s attorney-general, alleged in a statement that Goldman received $600 million in fees for its role, a total that was “several times higher than the prevailing market rates and industry norms.” Malaysia is demanding that Goldman forfeit all of the fees it was paid by the Malaysian government (which were paid at a higher-than-market rate to reflect certain “risks” related to the deal), as well as additional punitive money. While the DOJ has alleged that some $4.5 billion was stolen from 1MDB, Malaysian authorities are targeting $2.7 billion.

“Malaysia considers the allegations in the charges against the accused to be grave violations of our securities laws, and to reflect their severity, prosecutors will seek criminal fines against the accused well in excess of the $2.7 billion misappropriated from the bonds proceeds and $600 million in fees received by Goldman Sachs, and custodial sentences against each of the individual accused: the maximum term of imprisonment being 10 years,” the attorney general’s statement said.

Malaysia’s indictment alleged that statements in Goldman’s bond-sale documents were “false and misleading,” and that the Goldman employees who were involved personally profited and benefited from the deals.

Malaysia said the offering circulars and private placement memorandum issued by Goldman for the three bonds contained statements which were “false, misleading, or from which there were material omissions” because they said proceeds of the bonds would be used for legitimate purposes.

“Offering circulars and private placement memorandum are serious documents, intended to be relied on, and, in fact, were relied on, by purchasers of the bonds,” it said..

Malaysia said the accused structured the bond issues for “ostensibly legitimate purposes when they knew that the proceeds thereof would be misappropriated and fraudulently diverted”.

“In addition to personally receiving part of the misappropriated bond funds, those employees and directors of Goldman Sachs received large bonuses and enhanced career prospects at Goldman Sachs and in the investment banking industry generally,” the attorney-general’s office alleged.

Already the 1MDB controversy has inspired some Goldman clients to cut ties with the bank, particularly among the sovereign wealth fund set, which the bank had targeted as a “key growth area.” One Abu Dhabi fund has sued Goldman over unspecified damages related to 1MDB.

Goldman executives who have so far evaded prosecution now have another reason to be anxious, because even if they avoid scrutiny by the DOJ, the US does have an extradition treaty with Malaysia.

This holiday season, 1MDB has truly become the gift that keeps on giving for Blankfein.

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Via The Strategic Culture Foundation,

Well, what d’you know, regular as clockwork, Russia is being blamed – again – for “sowing social division” in Western states. This time, it’s the ongoing nationwide public protests in France against economic austerity which some Western media outlets have claimed are being “amplified” by Russian influence.

One of the media outlets carrying such claims is British newspaper, the Times of London. Last month, this same supposedly serious paper published claims that a popular Russian cartoon series, Masha and The Bear, was trying to “subvert” Western children with “pro-Russia” sentiments. After that ridiculous piece of garbage journalism, what credibility has the Times got to now push claims that Russia is behind the social protests engulfing France? Exactly, enough said.

France has been roiled by nearly five weeks of anti-government demonstrations, popularly referred to as the Yellow Vest movement. Protesters are planning to stage rallies in the capital Paris and other major cities this weekend for the fifth consecutive week. Clashes with riot police and burning vehicles in the Champs Élysées and other iconic public venues across France certainly speak to the gravity of the social anger being expressed by millions of French people.

The French public are incensed by mounting economic hardship under the government of President Emmanuel Macron, the former investment banker who wants to gut workers’ rights and social benefits under the euphemism of “reforms”. That’s after he and his wife recently redecorated the gilded Élysée Palace with ornate furnishings, wallpaper and carpets to the tune of €600,000. Many French workers are struggling to even heat their homes, such is prevalence of poverty.

This week, Macron made a nationwide televised address from this same gilded palace in which he appealed for calm and stated that the authorities would belatedly make concessions in an attempt to alleviate anger over tax and other economic issues that the French public say have hit them hard with deprivation.

Nevertheless, many French citizens say that Macron’s concessions are not nearly enough to appease their grievances. They have vowed to continue protesting, despite a terror incident this week in the eastern city of Strasbourg in which a gunman apparently killed three people. French authorities have urged protests to be called off in the aftermath of the tight security situation. The protesters have so far refused to call off their nationwide demonstrations.

It seems significant that as the Macron government is increasing its pressure on protests to subside – no doubt out of alarm that the authorities are losing control over the populace – then this week the media are lately reporting on claims that Russia is “amplifying” the unrest.

Jean-Yves Le Drian, the foreign minister, told French media that his government was launching a probe into allegations of Russian incitement of the Yellow Vest movement. It seems like a cynical distraction to undermine the legitimacy of public fury.

What are the allegations of Russian interference based on? Apparently, the Times of London and other Western media outlets reported that “Russian-linked” social media posts are commenting on the protests. So too, it is claimed, Russian news media have devoted undue coverage to the French demonstrations.

So, let’s get this straight.

Russian social media users and Russian news media are to blame for “amplifying” French unrest because they happen to report or discuss such unrest. The logic is absurd. No doubt millions of people in countries around the world as well as their news media are commenting on these momentous events in Europe. Just because Russians are doing that, then this is cited as “evidence” of Russian interference. What underlies that ludicrous conclusion is the most fatuous prejudice of Russophobia.

Western states are living in denial. Deep social problems from poverty under their failed economic policies and from disenfranchisement under failed political governance are inherent causes. Yet in spite of the systemic failure, Russia is cast as the scapegoat, rather than looking inward at the inherent causes.

We saw this in the US after the election of maverick outsider Donald Trump as president and with Britain’s Brexit referendum to leave the European Union. Those events were the result of discontent within those societies with regard to the status quo. Rather than dealing with their inherent social, economic and political problems, certain elements within the ruling class in the US and Britain sought to explain away the failing by pointing the blame on Russia.

The same tawdry thinking is being invoked with regard to the French protests.

Admittedly, however, the tedious narrative of blaming Russia is wearing thin, and so the latest claims about Russia stirring up the French are not being too widely played in Western media, no doubt because of a realization even by the Western media that such claims are idiotic. Again, after the Masha and the Bear farcical “report”, the Russian “red-baiting” in Western media has lost any potency it may once have had.

Western states are indeed confronting huge challenges from their own populaces. Poverty, social injustice, unemployment, crumbling public services, rampant alienation from state institutions, disgust with criminal militarism, among other grievances, are all motivating popular discontent and anger. The French protests are symptomatic of an international revolt against injustice of a failing capitalist order.

Western ruling establishments are only stoking even more popular uprising by refusing to take the societal malaise seriously. They are postponing a day of reckoning which will come sooner or later with greater force. Blaming Russia is part of their futile charade to postpone the day of reckoning. Telling French people they are being manipulated by Kremlin agents is laughable, contemptible and fueling the calamity of political collapse. Out of collapse, it may be hoped that some progressive, democratic new polity might emerge.

In an absurdist twist of the Marie Antoinette fable, French and Western authorities are saying, “The people want bread – but the Russians are telling them they should eat cake”. The travesty of their own elitist irrelevance is what’s making Western societies revolt against their establishments.

via RSS https://ift.tt/2EB9PkX Tyler Durden

For almost two years now, Bridgewater Associates Founder Ray Dalio has been telling anyone who will listen that the rise of anti-establishment populist parties presents a greater threat to markets than the ebbing of monetary stimulus and burgeoning national debt. And in an interview with CNN”s Fareed Zakaria that’s set to air on Sunday, Dalio is finally bringing his “1937 thesis” out of the realm of the financial press and to the attention of the broader public.

And in an excerpt from the interview published by Bloomberg on Saturday, Dalio cited one of his favorite charts, the “populism index”, once again demonstrating his elitist disdain for the “common man” while conflating their political ascendancy in the modern era with the violence and xenophobia of regimes like Hitler’s Third Reich.

“We created a conflict gauge – various ways of measuring different conflicts – and the conflict gauge now is the highest, really, since the war years,” Dalio said in an interview with CNN’s Fareed Zakaria that will air on Sunday. “There is more polarity, more conflict internally, of a sort.”

As a reminder, Dalio defines populism as…

Power to the common man…

…Through the tactic of attacking the establishment, the elites, and the powerful…

…Brought about by wealth and opportunity gaps, xenophobia, and people being fed up with government not working effectively, which leads to:

…The  emergence  of  the  strong  leader  to  serve  the  common  man  and  make  the  system  run  more  efficiently…

…Protectionism…

..Nationalism…

…Militarism…

…Greater conflict, and…

…Greater attempts to influence or control the media.

Here’s a snapshot of his developed populism index (which doesn’t include the populists’ advance in Austria, Hungary, Germany and elsewhere that have occurred over the past 18 months).  Since then, Bridgewater’s analysis puts the gauge at its highest level in 70 years.

It also doesn’t reflect the stunning victory of Jair Bolsonaro in Brazil and Mexico’s leftist/populist Manuel Andres Lopez Obrador.

“If you look at Brazil, if you look at Mexico and if you look in many countries right now, worldwide, you see that there is more political extremism,” Dalio said, according to a transcript provided by the network. “It’s a negative for the economy.”

So what’s the solution? According to Dalio, it’s “making sure capitalism works for everyone.” Here’s more on that from an interview Dalio gave back in September.

Dalio: Because I think the parallels are really important to understand. Okay. 1929 to ’32 and 2008 to 2009, we have a debt crisis. And interest rates hit zero. Both of those cases, interest rates hit zero. Only two times this century. There’s only one thing to do next. And that is to print money and buy financial assets. So in both of those cases, that’s what the central bank did, and they pushed asset prices up. As a result we had an expansion, we had the markets rising. And we particularly had an increase in the wealth gap. Because if you owned financial assets, you got richer. And if you didn’t, you didn’t. And so what today we have is a wealth gap that’s the largest since that period. The top 0.1 of the 1% of the population’s net worth is equal to the bottom 90% combined. You have to go back to 1935-40. As a result we have populism, okay. Populism is the disenchanted – capitalism not working for the majority of people. So we have that particular gap. So we have a political gap, a social gap in terms of the economics, and we’re coming into the phase where we’re beginning the tightening cycle. 1937, we begin a tightening cycle. We begin a tightening cycle at this point. No tightening cycle ever works out perfectly. That’s why we have recessions. We can’t get it perfectly. So as we’re going into this particular cycle, we have to start to think, “well, what will the next downturn be like?” we’re nine years into this. As you have a downturn, I believe that there’s a political and social implication to that related to populism. And less effective monetary policy. There’s less effective monetary policy because so far there are two types of monetary policy used: lowering interest rates, we can’t lower interest rates, and the second is quantitative easing. And it’s maximized its effect. So I think the next downturn is going to be a different type of downturn. I think pension problems, health care problems in terms of obligations that are not funded that are not debt —

Put another way: All of these ignorant proles who voted for Trump need to wise up and get an education! (this despite the fact that a majority of white men in the US with college degrees voted for Trump).

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Authored by Daniel Lacalle,

The main reason why the ECB quantitative easing program has failed is that it started from a wrong diagnosis of the eurozone’s problem. That the European problem was a demand and liquidity issue, not due to years of excess.

The ECB had been receiving tremendous pressure from banks and governments to implement a similar program to the US’ quantitative easing, forgetting that the eurozone had been under a chain of government stimuli since 2009 and that the problem of the euro-zone was not liquidity, but an interventionist model.

The day that the ECB launched its quantitative easing program, excess liquidity stood at 125 billion euro. Since then it has ballooned to 1.8 trillion euro.

“Only” after 2.6 trillion euro purchase program and ultra-low rates:

1. Eurozone PMIs are atrocious. The euro-zone index falls from 52.7 in November to 51.3 in December, well below the consensus forecast of 52.8. More importantly, France’s PMI plummeted from 54.2 in November to a 34-month low of 49.3.

2. Unemployment in the euro-zone, at 8%, is double that of the US and comparable economies. Youth unemployment rate remains at 15%.

3. Economic surprise has plummeted as the ECB balance sheet reached 41% of GDP (vs 21% of the Fed).

4. More than 900 billion euro of non-performing loans remain in the banking system, which keeps a trillion euro timebomb in its balance sheets (read). A figure that represents 5.1% of total loans compared to 1.5% in the US or Japan.

5. Deficit spending is rising. Government debt to GDP has risen to 86.8%.

6. The number of zombie companies -those that cannot pay interest expenses with operating profits- has soared to more than 9% of all large quoted firms, according to the BIS.

7. Sovereign states have saved around one trillion euro in interest expenses, but have spent all those savings. Today, almost no eurozone country can absorb a modest rise in interest rates, and Italy, Spain, France, Portugal, Slovenia, and others are demanding more spending and more deficits.

8. There is no real secondary market demand for eurozone sovereign bonds at these yields. At the peak of its quantitative easing program, the Federal Reserve was never the sole buyer of Treasuries. There was always a relative secondary market. In the Eurozone, the ECB has been 7 seven times the net issuances of sovereigns. No investor is likely to buy eurozone sovereign bonds at these yields once the ECB steps down.

9. Eurozone growth and inflation estimates have been revised down again in December. Industrial production has fallen sharply.

10. Trichet, the ECB’s predecessor to Mario Draghi, had lowered interest rates from 5% to 1%, injected billions into the economy, buying sovereign bonds in 2011.

What has the ECB been successful at?

• Keeping the euro alive. Not a small success, by the way. The risk of break-up has been contained but not eliminated.

• Maintaining government spending at low rates. However, at the expense of savers and salaries.

• Generating a sense of euphoria in financial markets, with high yield and sovereign bonds soaring.

• Wages in the euro-zone have increased below inflation since QE launched and into the third quarter of 2018. In fact, low inflation has been the biggest unintended success of the ECB. It could have been worse.

• The biggest “success” of the ECB has been the massive bailout of governments at the expense of savers.

(Courtesy Pictet)

We also have to agree that Mario Draghi has been reminding governments that they needed to implement structural reforms, use the period of low rates to deleverage and repeating constantly that monetary policy will not work without reforms. No one listened. It was party time, and cheap money attracts bad decisions.

A Never-Ending Government Stimulus

With public spending averaging over 46% of GDP, an annual deficit of over 1.7% on average, and 86% debt, talking about austerity is like eating a box of cakes and calling it “diet”.

The tax burden in this period has been raised throughout the EU (with honorable exceptions, such as Ireland) with an average tax wedge of 45% for workers and 40% on companies.

The United States, at the peak of the crisis, spent 43% of GDP (the EU, 50%) and dropped it to 34%, and that with 21% of the budget in 2009 dedicated to defense.

The EU has been a Keynesian stimulus machine before, through and after the crisis.

1) A massive stimulus in 2008 in a “growth and employment plan”. A stimulus of 1.5% of GDP to create “millions of jobs in infrastructure, civil works, interconnections and strategic sectors”. 4.5 million jobs were destroyed and the deficit nearly doubled.

Between 2001 and 2008, money supply in the euro-zone doubled.

2) Two massive sovereign bond repurchase programs with Trichet as ECB President, interest rates down from 4.25% to 1% since 2008. Poor Trichet. Trichet purchased more than 115 billion euros in sovereign bonds.

3) An additional mega stimulus from the ECB, in addition to the TLTRO liquidity programs with Draghi, which has taken sovereign bonds to the lowest yields in history and purchased almost 20% of the total debt of some major states.

The problem of the European Union has never been a lack of stimuli, but an excess of them.

As government expenditure and unproductive investments multiplied, overcapacity remains at levels of 20% and the constant errors of interventionism leave the euro-zone after the biggest monetary experiment in its history with the same high tax wedge and obstacles to the productive sectors.

The end of the ECB QE leaves the euro-zone in a weaker position than it was in 2011. Because fiscal space has been exhausted and the ECB, with its balance sheet at 41% of the euro-zone GDP and ultra-low interest rates, has also exhausted its monetary tools.

The end of QE does not just show the failure of the ECB’s policy. It highlights the failure of governments’ economic policies.

Governments should implement growth-oriented reforms lowering taxes and attracting capital. Many will not. Most will likely decide, again, that they need to spend more. Fail, repeat.

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After police arrested dozens of demonstrators who tried to storm the Hungarian Parliament in Budapest earlier this week, the country’s ruling Fidesz Party has blamed socialist lawmakers and liberal billionaire George Soros – whose “Open Society Foundation” was recently driven out of the country by a series of laws penalizing foreign interlopers in Hungarian politics – for stoking civil unrest in response to reforms to labor laws and the country’s judiciary that were recently passed by parliament.

Since the laws passed Parliament on Tuesday despite opposition lawmakers’ attempts to stymie the vote with harassment tactics (one lawmaker even blocked the speaker’s podium in an attempt to stop the vote), police in Budapest have struggled to repel large crowds of demonstrators. Some of the protesters have even put on masks despite organizers of the demonstration asking participants not to cover their face.

Police responded to the increasingly violent demonstration with tear gas and defensive tactics after being pelted with eggs, beer cans, and sound grenades, leaving five officers injured. According to News Wars, Socialist Party leader Bertalan Toth is facing fines after trolling Prime Minister Viktor Orban on the floor of parliament. Toth told reporters that he organized the protest action.

MUST WATCH: As the National Assembly of Hungary descends into chaos, opposition MP Bence Tordai rolls up on PM Orban and trolls him to his face. This is unprecedented. Orban is visibly uncomfortable. He was not counting on this. #Hungary pic.twitter.com/C8XCKN9A6G

— Benjamin Novak (@b_novak) December 12, 2018

Fidesz said in a statement that the opposition “made clowns of themselves” by “colluding” with Soros in a desperate attempt to stop the vote.

“The opposition, in a hopeless position, made clowns of themselves in Parliament, acting aggressively and colluding with the Soros organizations that organized violent street protests,” Fidesz said in a statement. “The point of the labor code amendment is to ensure that those who want to work and earn more don’t face bureaucratic obstacles.”

The more controversial of the two laws passed has been nicknamed the “Slave Law” by those who oppose it. It allows employers to circumvent unions and make deals with employees to work up to 400 hours of overtime a year. Another law created a new federal court to handle cases related to business and employment.

Judges on that court will be selected by the country’s Justice Minister, which has elicited criticism that Fidesz is trying to subvert the country’s justice system to cement its “authoritarian” rule. However, Fidesz remains incredibly popular in Hungary, and won an overwhelming parliamentary victory in elections earlier this year.

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Authored by Ann Garrison via ConsortiumNews.com,

Hungarian scholar George Szamuely tells Ann Garrison that he sees a 70 percent chance of combat between NATO and Russia following the incident in the Kerch Strait and that it is being fueled by Russia-gate.

An Interview with George Szamuely

George Szamuely is a Hungarian-born scholar and Senior Research Fellow at London’s Global Policy Institute. He lives in New York City. I spoke to him about escalating hostilities on Russia’s Ukrainian and Black Sea borders and about Exercise Trident Juncture, NATO’s massive military exercise on Russian borders which ended just as the latest hostilities began.

Ann Garrison: George, the hostilities between Ukraine, NATO, and Russia continue to escalate in the Sea of Azov, the Kerch Strait, and the Black Sea. What do you think the latest odds of a shooting war between NATO and Russia are, if one hasn’t started by the time this is published?

George Szamuely: Several weeks ago, when we first talked about this, I said 60 percent. Now I’d say, maybe 70 percent. The problem is that Trump seems determined to be the anti-Obama. Obama, in Trump’s telling, “allowed” Russia to take Crimea and to “invade” Ukraine. Therefore, it will be up to Trump to reverse this. Just as he, Trump, reversed Obama’s policy on Iran by walking away from the Joint Comprehensive Plan of Action, otherwise known as the Iran nuclear deal. So expect ever-increasing US involvement in Ukraine.

AG: NATO’s Supreme Commander US General Curtis M. Scaparrotti is reported to have been on the phone with Ukrainian President Petro Poroshenko “offering his full support.” Thoughts on that?

GS: There has been a proxy war within Ukraine since 2014, with NATO backing Poroshenko’s Ukrainian government and Russia backing the dissidents and armed separatists who speak Russian and identify as Russian in Ukraine’s southeastern Donbass region. But in the Kerch Strait the hostilities are between Russia and Ukraine, with NATO behind Ukraine.

A shooting war will begin if it escalates to where NATO soldiers shoot and kill Russian soldiers or vice versa. Whoever shoots first, the other side will feel compelled to respond, and then there’ll be a war between Russia and NATO or Russia and a NATO nation.

We don’t know whether NATO would feel compelled to respond as one if Russians fired on soldiers of individual NATO nations – most likely UK soldiers since the UK is sending more of its Special Forces and already has the largest NATO military presence in Ukraine. Russia could defeat the UK, but if the US gets involved, all bets are off.

Szamuely: U.S. ready to fight to last Brit.

AG: It’s hard to imagine that the US would allow Russia to defeat the UK.

GS: It is, but on the other hand, the US is the US and the UK is the UK. The United States might well be ready to fight to the last Brit, much as the United States is definitely ready to fight to the last Ukrainian. There are already 300 US paratroopers in Ukraine training Ukrainians, but the British would be well advised that words of encouragement from Washington don’t necessarily translate into US willingness to go to war.

AG: The US Congress passed a law that US troops can’t serve under any foreign command, so that would require US command.

GS: Yes, and without that, any British military defeat could be blamed on traditional British military incompetence rather than US weakness or foolish braggadocio.

AG: This latest dustup between the Russian and Ukrainian navies took place in the Kerch Strait. I had to study several maps to understand this, but basically neither Russian nor Ukrainian vessels, military or commercial, can get to or from the Sea of Azov and the Black Sea without passing through the Kerch Strait. That doesn’t mean that neither could get to the Black Sea, because both have Black Sea borders, but they couldn’t get from ports in the Sea of Azov to the Black Sea and back.

And neither Ukraine nor Russia can get from the Black Sea to Western European waters without passing through the Bosporous and Dardanelles Straits in Turkey to the Aegean and Mediterranean Seas, and then further to the Atlantic Ocean through the Strait of Gibraltar, which is bordered on one side by Spain and the British territory of Gibraltar, and on the other by Morocco and the Spanish territory Ceuta. So there are many geo-strategic choke points where Russian ships, naval or commercial, could be stopped by NATO nations or their allies, and Ukraine has already asked Turkey to stop them from passing through the Bosporus Strait. Thoughts on that?

GS: Well, of course Ukraine can ask for anything it likes. There’s no way in the world Turkey would try to stop Russian ships going through the Bosporus Strait. That would be a violation of the 1936 Montreux Convention and an act of war on the part of Turkey. It isn’t going to happen. As for the Kerch Strait, it is Russian territorial water. Ukraine is free to use it and has been doing so without incident since 2014. The only thing the Russians insist on is that any ship going through the strait use a Russian pilot. During the recent incident, the Ukrainian tug refused to use a Russian pilot. The Russians became suspicious, fearing that the Ukrainians were engaged in a sabotage mission to blow up the newly constructed bridge across the strait. You’ll remember that an American columnist not so long ago urged the Ukrainian authorities to blow up the bridge. That’s why the Russians accuse Kiev of staging a provocation.

AG: There’s a longstanding back channel between the White House and the Kremlin, as satirized in Dr. Strangelove. Anti-Trump fanatics keep claiming this is new and traitorous, but it’s long established. Obama and Putin used it to keep Russian and US soldiers from firing on one another instead of the jihadists both claimed to be fighting in Syria. Kennedy and Khrushchev used it to keep the Bay of Pigs crisis from escalating into a nuclear war. Shouldn’t Trump and Putin be talking on that back channel now, no matter how much it upsets CNN and MSNBC?

GS: Well, of course, they should. The danger is that in this atmosphere of anti-Russian hysteria such channels for dialogue may not be kept open. As a result, crises could escalate beyond the point at which either side could back down without losing face. What’s terrifying is that so many US politicians and press now describe any kind of negotiation, dialogue, or threat-management as treasonous collusion by Donald Trump.

Remember Trump’s first bombing in Syria in April 2017. Before he launched that attack, Trump administration officials gave advance warning to the Russians to enable them to get any Russian aircraft out of harm’s way. This perfectly sensible action on the part of the administration—leave aside the illegality and stupidity of the attack—was greeted by Hillary Clinton and the MSNBC crowd as evidence that the whole operation was cooked up by Trump and Putin to take attention off Russia-gate. It’s nuts.

AG: Most of us have heard Russia and NATO’s conflicting accounts of why the Russian Navy seized several Ukrainian vessels in the Sea of Azov. What’s your interpretation of what happened?

Poroshenko: Provocation with elections near?

GS: As I said, I think the Russians had every right to be suspicious of the intent of the Ukrainian vessels. The Ukrainians know that these are Russian territorial waters. They know that the only way to go through the Kerch Strait is by making use of a Russian pilot. They refused to allow the Russians to pilot the ships through the strait. Whatever the Ukrainians’ ultimate intent was—whether it was to carry out an act of sabotage, to provoke the Russians into overreaction and then to demand help from NATO, or simply to go through the strait without a Russian pilot in order to enable President Poroshenko to proclaim the strait as non-Russian—whatever Kiev’s intent was, the Russians were entitled to respond. The force the Russians used was hardly excessive. In similar circumstances, the US would have destroyed all of the ships and killed everyone on board. Recall, incidentally, Israel has seized Gaza flotilla boats and arrested everyone on board. In 2010, the Israeli Navy shot nine activists dead during a flotilla boat seizure, and wounded one who died after four years in a coma.

AG: Don’t the US, Ukraine, and the UN Security Council refuse to recognize the Kerch Strait as Russian territory, and insist that Russia’s claim to it violates various maritime treaties? I know the UNSC refuses to recognize the Golan Heights as Israeli territory, not that that does Syria any good.

GS: According to the 2003 agreement, Russia and Ukraine agreed to consider the strait as well as the Sea of Azov as shared territorial waters. From 2014 on, Russia considered the strait as Russian waters, though it’s made no attempt to hamper Ukrainian shipping. The Azov Sea is still shared by Russia and Ukraine. During the recent incident, the Ukrainian Navy acted provocatively, deliberately challenging the Russians. As for what the UNSC accepts, how would NATO respond if Serbia entered Kosovo on some pretext or other?

AG: OK, now let’s go back to NATO’s Exercise Trident Juncture, a massive military exercise on Russia’s Scandinavian and Arctic borders that concluded on November 24, one day before the Kerch Strait incident. The first phase was deployment, from August to October. The second phase was war games from October 25th to November 7th. The war games were based on the premise that Russia had invaded Scandinavia by ground, air, and sea. They included 50,000 participants from 31 NATO and partner countries, 250 aircraft, 65 naval vessels, and up to 10,000 tanks and other ground vehicles, and I hate to think about how much fossil fuel they burned.

The final phase was a command post exercise to make sure that, should NATO forces ever face a real Russian invasion of Scandinavia, their response could be safely coordinated in Norway and in Italy, far from the war zone.

So George, do Scandinavians have reason to worry that Russia might invade any of their respective nations?

GS: Not at all. This is ridiculous. It was the largest military exercise since the end of the Cold War, and why? Why did they do this? Russia isn’t threatening Scandinavia, but it’s more likely that it will if NATO continues conducting war games on its borders. Right now tension between East and West is escalating so fast that a single event could be like a match that triggers an explosion, and then there’ll be a war.

Stranger than Strangelove.

AG: There was a recent Russian exercise, or joint Russian and Chinese exercise, based on the premise that the US had invaded Korea, right?

GS: Right. But it wasn’t anywhere near Europe, so it wasn’t threatening the Europeans. It took place in eastern Siberia, so it shouldn’t have caused panic in NATO countries. It shouldn’t have caused panic in the US either, because the Pacific Ocean separates the US and the Korean Peninsula.

What’s striking about Trident Juncture is that it involved Sweden and Finland, both of whom are traditionally neutral. They were neutral during the Cold War, not joining any alliances. Finlandization came to mean a foreign policy that in no way challenged or antagonized the USSR. So now here’s Finland rolling back that policy and joining NATO in this massive military exercise to stop nonexistent Russian aggression.

AG: Has Russia ever attempted to seize territory outside its own borders since the end of the Cold War?

GS: No. Russia never attempted to seize territory outside its own borders. The case cited by the West is Crimea, but that was really an outstanding issue that should have been addressed during the dissolution of the Soviet Union. Boris Yeltsin, the drunken, incompetent stooge that the US installed, just neglected it.

The Russian-speaking and Russian-identified people of Crimea were unhappy about Ukraine claiming sovereignty over them. They had been an autonomous republic within the USSR, and after its dissolution, they still retained their constitutional autonomy. That’s what gave them the right to hold a referendum to join the Russia Federation in 2014.

If the West is involved in an uprising, as in Ukraine, it recognizes the “independence” of the government it puts in power. It won’t recognize the constitutional autonomy of Crimea, which predated the 2014 Ukrainian revolution or illegal armed coup, whichever you call it, because it wasn’t part of their plan.

AG: The NATO nations and their allies say that Russia invaded and occupied Crimea, violating Ukrainian sovereignty according to international law. Democracy Now’s Amy Goodman referred to the “illegal annexation” of Crimea at least three times after the Kerch Strait incident. How do you explain the presence of Russian soldiers in Crimea prior to the referendum?

GS: They didn’t invade and occupy Crimea. Their forces were there legally, according to a 25-year lease agreement between Russia and Ukraine.

Crimea had been a part of Russia for more than 200 years. For most of the time, during the USSR era, it was an autonomous republic within the Russian Federation. In 1954, Khrushchev transferred some degree of sovereignty over the Crimean Republic to Ukraine. I’m not entirely sure why he did that, but the issue wasn’t that important then because Ukraine, Russia and Crimea were all part of the USSR.

Khrushchev didn’t envisage an independent Ukraine walking off with such a prize piece of real estate. Crimea is not only a huge tourist destination, it is also the site of Russia’s primary naval base on the Black Sea in Sevastopol. Yeltsin failed to address the problem in 1991. Since then, every time Crimeans talked about holding a referendum on their future, Kiev threatened to use force to stop them. Kiev would have used force again in 2014 if the Russians in the Port of Sevastopol had not left their Crimean base and made their presence known.

AG: The US, aka NATO, has an empire of military bases all over the world, and troops right up against Russia’s borders as in Exercise Trident Juncture. Does Russia have anything remotely like it?

NATO practices war with Russia. Exercise Trident Juncture.
(Master-Corporal Jonathan Barrette, Canadian Forces Combat Camera)

GS: No. Russia does not have military bases outside its borders, which are now more or less as they were in 1939, when the USSR was surrounded by hostile states that were more than happy to join Hitler. So it’s ridiculous to tell Russia, “Don’t worry about our troops and war games all over your borders because we don’t really mean any harm.” Washington is calling Russia an existential enemy, and the UK is promising to stand shoulder to shoulder with its NATO allies and partners against “Russian aggression,” which is really Russian defense. So now we have an explosive situation on the Ukrainian and Russian borders that could easily turn into a shooting war.

AG: I read some US/NATO complaints that Russia was conducting exercises on its own side of the border. And last week NATO accused the Russian military of jamming its signals during its rehearsal for a war on Russia’s borders.

GS: Yes, that’s what the US considers Russian aggression, even though its troops and bases are all over the world and all over Russia’s borders.

AG: Competition between US and Russian energy corporations is one of the main undercurrents to all this. The US State Department even said that Europe should abandon the Nord Stream-2 gas pipeline project with Russia because of the Kerch Strait incident, but that received a cool response, particularly from Angela Merkel. What are your thoughts about that?

GS: Well, obviously, the Trump administration is determined to push the Europeans to give up on natural gas from Russia and to opt, instead, for US liquefied natural gas (LNG). The problem is that LNG shipped across the Atlantic is much more expensive than natural gas piped to Europe from Russia. So it’s clearly not in the interests of the Europeans to have a bigger energy bill. Look what’s happening in France. Ordinary people are not making so much money that they can afford to shell out more for energy, particularly when there is no need to do so. Some countries such as Poland are so imbued with hostility toward Russia that they’re willing to pay more for gas just to hurt Russia, but Germany won’t go down this path.

AG: Anything else you’d like to say for now?

GS: Yes, I think it’s amazing that this many years after the Cold War we’ve reached a point where there’s almost no public criticism of a policy that has led to the US abandoning a major arms control agreement, namely the Intermediate-Range Nuclear Forces (INF) Treaty signed in 1987.

There’s almost no public criticism of the US getting involved in an armed confrontation on Russia’s doorstep, in Ukraine, Syria, Iran, or conceivably even Scandinavia. There’s almost no public criticism of roping formerly neutral European powers like Sweden and Finland into NATO military exercises.

Given the fact that the New Strategic Arms Reduction Treaty that went into effect in 2011 will expire in 2021, and given that there’s nothing on the horizon to take its place, this is an extraordinarily perilous point in time.

And much of this has to be blamed on the liberals. The liberals have embraced an anti-Russian agenda. The kind of liberal view that prevailed during the Cold War was that we should at least pursue arms control agreements. We might not like the Communists, but we need treaties to prevent a nuclear war. Now there’s no such caution. Any belligerence towards Russia is now good and justified. There’s next to no pushback against getting into a war with Russia, even though it could go nuclear.

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Overall, arms sales increased in 2017, with total global sales nearing 400 billion dollars, marking a 2.5 percent increase from last year and the third year of continued growth for the industry.

But, as Statista’s Sarah Feldman points out, U.S. arms companies still produce the most weapons worldwide.

You will find more infographics at Statista

About 57 percent of weapons produced last year came from the United States, according to the Stockholm Peace Research Institute SIPRI.

Russia comes in second, with year-over-year growth in arms production. In 2017, Russia provided the world with 10 percent of arms sales, closely followed by The UK.

Only major arms companies were included in this study. China was excluded due to insufficient data.

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Authored by Jeremiah Johnson (nom de plume of a retired Green Beret of the United States Army Special Forces) via SHTFplan.com,

There are many serious issues to address, relevant to current events. Just to skim some of what has happened most recently, the Dow Jones (although a “lagging” indicator) has been extremely volatile within the past month, appearing to be headed toward a loss for the year overall. Spending is down, and the “bubble” of pseudo-consumer confidence prior to Thanksgiving seems to have dissipated.

The main focus: the unrest that is swiftly crossing national borders has a common denominator in France, and now in Belgium and the Netherlands. That common denominator is that of the populace being fed up with the amount of taxation, coupled with the politicos pushing illegal Muslim aliens into nations that have been predominantly Christian for almost a thousand years.

In countries such as Germany, Sweden, and Norway (whose ancestors were not known for playing “softball,” i.e. the Saxons and Vikings, respectively) we have been witness to rapes and beatings perpetrated by Muslim illegal aliens with the governments either looking the other way or encouraging it. Soros and those of his ilk in the EU have been pushing this “forced integration” of an invasion of illegals with a huge ethnic and religious gap between them and the host nations.

The controllers (oligarchs and politicos) are pushing these (numerically speaking) armies of aliens into previously stable nations…for several express purposes:

1. The denigration of the nations’ borders, language, religion, family structure, and culture

2. To reduce the nations’ original populace to a state of abandoning their nationalities and nationalism

3. To place these aliens into a position where they will weaken the economies of the nations (by being forced onto the dole) and also utilizing their numbers for support when it comes time to “vote” in these nations.

We have been witnessing an internal conquest fomented upon each of these European nations more effective than any invasion with military resources. The controllers are “injecting” these aliens into the populations and allowing their destructive natures and habits (completely at odds with the host nation) to destroy those countries….from within.

On December 7, 2018, Zero Hedge published a piece entitled Viral Video Of French Students Lined Up Execution-Style Sparks Outrage; Protesters Want Macron’s “Scalp” that really bears looking at. The cops there are way out of hand. The most interesting part of the article, however, may be the interview that was conducted with a Parisian cab driver, and his stance in that interview summarizes the rage and betrayal felt by the French people. Here’s a piece of it for you, and the article highlighted some words in the excerpt…and I’m leaving them that way, as they are worth reading and keeping in mind:

One angry Paris taxi driver called for Macron’s “scalp” in a half-hour monologue, according to Bloomberg.

“We’re going out there to fight,” he said, adding: “I want Macron’s scalp, I’m not afraid of anything. I have nothing to lose. You have to risk your life or you don’t get anything from these people.”

And why does the cab driver feel this way about Macron? Read this other part, showing it is not “blind rage” for no reason:

For people like the taxi driver, there’s no limit when it comes to removing the youngest French leader since Napoleon who, as the country’s economy minister between 2014 and 2016, deregulated the taxi business and was a strong supporter of car-booking apps.

“He ruined us, he broke our business,” the taxi driver said. “He wants everything new, digital, the new world, and he did it all without thinking of the cost for us. Replace everyone, have everything young, new? Yeah, well that’s not how you do things. Now it’s payback time.”

Reminds me of Jesse Ventura’s words in the movie “Predator,” but you see the point: after they push you into a corner, you have to come out swinging. We are facing a similar situation in this country. The President has been holding his own, and it appears with the Mueller witch hunt and the Democrat Party gathering torches and pitchforks, the offensive is going to take a new direction. In January, the House (now Democrat-controlled) is back in control of defense expenditures, and that is going to place actions that the President is taking (troops on the border to halt the illegal alien “caravan of love,” and to build a wall) in danger of being halted and/or defunded.

Another article came out on December 3, 2018, entitled German biker gangs are standing up for their country’s women by beating the hell out of the Muslim ‘refugees’ in the[ir] midst who keep assaulting them, by ludinfo24.com.

Here is an excerpt:

Days after the sexual assaults on German women in Cologne city came to light, local gangs are uniting in a “manhunt” of foreigners.  And just this weekend, two Pakistanis and a Syrian man were injured in attacks by gangs of people in Cologne, German police said. On New Year’s Eve, Cologne was the scene of dozens of assaults on women, a number that has grown into hundreds as more and women have come forward to register complaints. Local newspaper Express reported that the attackers were members of rocker and hooligan gangs who via Facebook arranged to meet in downtown Cologne to start a “manhunt” of foreigners.

You can plainly see the fawning media over there is no different than ours…as it labeled the bikers as “members of rocker and hooligan gangs.” Hooligans, eh? So, if they are “hooligans” for stepping up to the plate and defending their women, then what are the Polizei for permitting these crimes to occur against the women?

What they are: conspirators, who are complicit with the crimes committed by the controlling politico-oligarchy…the crimes of not protecting the German citizens from these Muslim invaders. Here’s the picture posted by ludinfo24.com with the article:

Look closely at the photograph. These guys are (even with the masks you can see it) pretty clean cut, dressed cleanly and normally…and they’re not “soy boys” by any stretch of the imagination. The prediction? German bikers 1, Arabs 0, plain and simple….and as it should be. It is a beautiful thing to see them stand up for their women…since their rights have been flushed into the toilet, or swept under a prayer rug or magic carpet.

When law enforcement fails to enforce the law and protect citizens from illegal aliens…then it is no longer law enforcement….it is an armed tyrannical enforcer of a dictatorship….voted into office legally, but pursuing actions that are not approved by the populace. Just as Marbury vs. Madison pointed out under our system, if something is onerous to the Constitution, then it is not to be considered lawful in any way, shape, or form. That also includes [mis]representatives who circumvent the will of the people by using the power of their position.

They were elected legally, but to represent the will of the people, not to accomplish the “fundamental transformations” of countries in stark contradiction to their constitutions, charters, and laws, and to the detriment and/or physical harm of their citizenry.

In previous articles I outlined 3 measures the globalists will take to collapse the systems and usher in a totalitarian global government (in order): A pandemic (fostered or artificially-created), an EMP event, or a Nuclear war.

You are seeing the final methods being used as a precursor to those three actions: the collapsing of the economies, the inculcation of the complete surveillance state, and the dissolution of the nations through internal subterfuge as has been outlined within this article.

One of the advantages that the European nations have in dealing with confronting their governments is ethnic homogeneity. This leads to a single-minded purpose, in which they will not settle for anything less than the capitulation of the government, and at a bare minimum, forcing the resignation of the leadership. Look at Merkel: not going to run for office again. Now look at Macron, one step from being shown the door by the angry mobs. They called out almost 90,000 police to deal with these riots in France, only to find that a great number of the police are siding with the populace!

Look at what is happening in the United States. Look at the crimes ranging from rape to murder that are being inflicted upon American citizens who live on our southern borders. Hungary has set up barbed wire and machine gun positions to keep out the illegals. We, on the other hand, send the National Guard…to do what? Play “Yahtzee” or “Scrabble” with the illegals? Best 3 out of 5 wins?

It is an invasion, plain and simple. The controllers originally intended for the U.S. to be where South Africa is now…with the reins of power taken away from white South Africans…and soon for them to be completely vilified and driven off of their land…and worse. It hasn’t happened that way here yet, but they have been pushing the destruction of the country through forced “immigration” for decades. Remember that President Reagan gave amnesty to a million illegals. Such actions are not monopolized by the Democrats and Obama. The former President they just buried was the one who created NAFTA….Clinton merely signed it into law.

In order for a nation to continue, it needs to maintain all of the elements that made it a nation. Those elements can be found within the borders, language, religions, and culture of its people. When the laws that are made within a nation to protect its citizens and maintain it are flagrantly disobeyed or circumvented by its politicians, courts, and legislators, it is time for that nation to return to the grass roots and exercise their rights. Just because a government is of and by the people doesn’t mean that it is “for” the people.

The instabilities we are seeing are a precursor of things to come, and the Parisian cab driver was correct… in order to change an evil, sometimes you have to be willing to risk everything you have. Let’s close with a quote from our recently-departed former President, George H.W. Bush that may stem the flow of the single tear coursing down the cheek in mourning:

“Sarah, if the American people ever find out what we have done, they would chase us down the street and lynch us.” – President George H.W. Bush to Sarah McLendon, Journalist, in 1992 Press Corps Interview, when he was asked about Iraq-gate and Iran Contra              

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Perhaps still seeking to justify imposing martial law over broad swathes of his country, and attempting to keep international pressure and media focus on a narrative of “Russian aggression,” Ukrainian President Petro Poroshenko denounced what he called the high “threat of Russian invasion” during a press conference on Sunday, according to Bloomberg. 

Though what some analysts expected would be a rapid flair up of tit-for-tat incidents following the late November Kerch Strait seizure of three Ukrainian vessels and their crew by the Russian Navy has gone somewhat quiet, with no further major incident to follow, Poroshenko has continued to signal to the West that Russia could invade at any moment. 

“The lion’s share of Russian troops remain” along the Russian border with Ukraine, Poroshenko told journalists at a press conference in the capital, Kiev. “Unfortunately, less than 10 percent were withdrawn,” he said, and added: “As of now, the threat of Russian troops invading remains. We have to be ready for this, we won’t allow a repeat of 2014.”

Poroshenko, who declared martial law on Nov. 26, citing at the time possible imminent “full-scale war with Russia” and Russian tank and troop build-up, on Sunday noted that he will end martial law on Dec. 26 and the temporarily suspended presidential campaign will kick off should there be no Russian invasion. He also previously banned all Russian males ages 16-60 from entering Ukraine as part of implementation of 30 days of martial law over ten provinces, though it’s unclear if this policy will be rescinded. 

During his remarks, the Ukrainian president said his country should push to join NATO and the EU within the next five years, per Bloomberg:

While declining to announce whether he will seek a second term in the office, Poroshenko said that Ukraine should achieve peace, overcome the consequences of its economic crisis and to meet criteria to join the EU and the North Atlantic Treaty Organization during next five years.

But concerning both his retaining power and his ongoing “threat exaggeration” — there’s even widespread domestic acknowledgement that the two are clearly linked.

According to The Globe and Mail:

While Mr. Poroshenko’s domestic rivals accuse him of exaggerating the threat in order to boost his own flagging political fortunes — polls suggest Mr. Poroshenko is on track to lose his job in a March election — military experts say there are reasons to take the Ukrainian president’s warning seriously.

As we observed previously, while European officials have urged both sides to exercise restraint, the incident shows just how easily Russia and the West could be drawn into a military conflict over Ukraine.

Certainly Poroshenko’s words appear designed to telegraph just such an outcome, which would keep him in power as a war-time president, hasten more and massive western military support and aid, and quicken his country’s entry into NATO — the latter which is already treating Ukraine as a de facto strategic outpost. 

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Authored by Mark Hendrickson via The Mises Institute,

The New York Times obituary opened with a simple recitation of facts:

“Zhores A. Medvedev, the Soviet biologist, writer and dissident who was declared insane, confined to a mental institution and stripped of his citizenship in the 1970s after attacking a Stalinist pseudoscience, died … in London.”

Zhores Medvedev, his twin brother Roy (still alive at 93), the physicist Andrei Sakharov, and the Nobel Prize-winning novelist Aleksandr Solzhenitsyn were leading dissidents. They courageously put their lives on the line to smuggle manuscripts out of the Soviet Union. They wanted the wider world to learn the truth about the “the workers’ paradise” that so many Western intellectuals (some deluded, others having gone over to the dark side) praised.

A generation of Americans has been born since the Soviet Union, the USSR that President Ronald Reagan boldly labeled “the evil empire,” ceased to exist.

They have little to no concept of how ferociously the USSR’s communist tyranny suppressed dissent. As the Times obit of Dr. Medvedev illustrates, one Soviet technique of oppression was to declare that political dissidents were insane. They were then incarcerated in psychiatric hospitals where they were tormented and tortured. Some were used as human guinea pigs for dangerous experiments. (Shades of Hitler’s buddy, Dr. Mengele.) Some even succumbed to the not-so-tender ministrations of those “hospitals.”

I recall one particular example of the disgusting abuse of human beings in Soviet psychiatric hospitals. Vladimir Bukovsky, who will turn 76 later this month, spent a dozen years being shuffled between Soviet jails, labor camps, and psychiatric hospitals. One of the “therapies” administered in a psychiatric hospital was putting a cord into Bukovsky’s mouth, then threading it from his throat up through his nasal passages, and then drawing it out through one of his nostrils. (Maybe the cord went in the opposite direction; I’ve never been interested in memorizing torture techniques.) Alas, this communist “treatment” did not “cure” Bukovsky of his rational (NOT irrational) abhorrence of tyranny and brutality.

The warped thought process that led to the perversion and weaponization of psychiatry in the Soviet Union can be traced back to communist icon and thought leader Karl Marx. Marx propounded a spurious doctrine known as “polylogism” to justify stifling dissent. According to Marx, different classes of people had different structures in their minds. Thus, Marx declared the bourgeoisie to be mentally defective because they were inherently unable to comprehend Marx’s (allegedly) revelatory and progressive theories. Since they were, in a sense, insane, there was no valid reason for communists to “waste time” arguing with them. On the contrary, communists were justified in not only ignoring or suppressing bourgeois ideas, but in liquidating the entire bourgeois class.

The practice of categorizing one’s enemies as “insane” became a ready tool of suppression in the Soviet state founded by Lenin and developed under Stalin. The USSR’s infamous secret police energetically wielded quack psychiatry as a club with which to destroy political dissidents. If you want more information about how the Soviets kidnapped and misused psychiatry, here is a link to a document that describes what American agents of the USSR were taught about psycho-political techniques in the late 1930s. (The provenance of the booklet is murky, and Soviet apologists have long tried to discredit it, but in light of numerous psychiatric abuses known to have been committed with the approval of the USSR’s rulers, the content of the book is highly plausible.)

The incarceration of Zhores Medvedev in psychiatric hospitals in the 1970s was a monstrous injustice. His “crime” was having exposed the bizarre pseudoscience of Lysenkoism that Stalin had embraced in the 1950s. Lysenko’s quack theories led to deadly crop failures and widespread starvation. Nevertheless, Stalin backed him by executing scientists who dared to disagree with Lysenko. Millions of innocents lost their lives because “truth” in the Soviet Union wasn’t scientific, but political.

Another vivid example of the destructive consequences of politicizing truth is related in Solzhenitsyn’s exposé of Soviet labor camps, The Gulag Archipelago. Certain Soviet officials decided to increase the steel shipped to a certain area. When the planners issued orders for trains to carry double the steel to the designated destination, conscientious engineers informed them that it couldn’t be done. They pointed out that the existing train tracks could not support such great weights. The politicians had the engineers executed as “saboteurs” for opposing “the plan.” What followed was predictable: The loads were doubled, the tracks gave out, and the designated area ended up getting less steel, not more.

This episode shows where the true insanity was in the USSR. The central planners believed that constructing their ideal country was simply a matter of will.

Alas, reality doesn’t conform to the whims or will of any human being, but the arrogance of central planners remains stubbornly impervious to that inescapable fact of life. Instead, as the havoc wrought by Soviet central economic planners repeatedly demonstrated, the communist central planners refused to abandon their insufferable self-delusion and mystical belief in the power of their own will to alter reality. This was the true insanity, compounded by the error of persecuting competent scientists like Zhores Medvedev.

Sadly, the practice of branding political opponents as “insane” is not confined to the now-defunct Soviet state. In 1981, when I was completing my master’s thesis on Solzhenitsyn, I telephoned an American college professor of history to ask whether he recalled if Solzhenitsyn had been granted honorary U.S. citizenship. (He hadn’t. President Ford didn’t want to offend the Soviet leadership.) The reply to my question was this: “Aleksandr Solzhenitsyn belongs in an insane asylum.” The virus of Marx’s polylogism is, unfortunately, alive and well in American academia.

As for Zhores Medvedev, may he now rest in peace and receive his reward for his integrity and courage.

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