Reminder: American Officials Lie About War

“Don’t trust liars—especially about matters of war and peace,” writes Vox‘s Matthew Yglesias. “Today’s a day,” The Atlantic‘s David Frum posits, “when the most untruthful administration in US history will wish its statements could be believed.”

It is appropriate, necessary, yet insufficient to remember that government lying is bad, that government lying about war is particularly bad, and that Donald Trump is one of the most bizarrely promiscuous liars ever seen in American political life. Insufficient, because laying the blame on one particular administration, or even one major political party, too often becomes a de facto credulousness about the war-related veracity of other administrations.

The truth, which literally hurts, is that every administration lies about war, particularly (though not only) about its reasons for initiating deadly force. It was literally only last month that The Washington Post‘s “Afghanistan Papers” project detailed how America’s longest war has been a nearly two-decade festival of deadly bullshit. How many times are we going to accept on-the-record U.S. military quotes like “Every data point was altered to present the best picture possible”?

Too many times, I’m afraid. We enable the machinery of our own bamboozlement with our often partisan-based trust in the protectors of the flag.

Readers with long memories will surely note that David Frum wrote President George W. Bush’s infamous “Axis of Evil” State of the Union Address in January 2002, linking Iran, North Korea, and especially Iraq in a rhetorical if not quite actual network of bad-guy regimes threatening to do the U.S. harm. “I was to provide a justification for war,” Frum recalled in his memoir. The justification was…misleading.

It was also damaging in a way that relates directly to this week’s escalation with Iran. Ryan Crocker, then the deputy chief of the U.S. embassy in Kabul, met the next day with a lead Iranian government official, who said (according to Crocker’s memory, as recounted in a must-read 2013 New Yorker profile of Qasem Soleimani), “You completely damaged me….Suleimani is in a tearing rage. He feels compromised.” More, from The New Yorker‘s Dexter Filkins:

The negotiator told Crocker that, at great political risk, Suleimani had been contemplating a complete reëvaluation of the United States, saying, “Maybe it’s time to rethink our relationship with the Americans.” The Axis of Evil speech brought the meetings to an end. Reformers inside the government, who had advocated a rapprochement with the United States, were put on the defensive. Recalling that time, Crocker shook his head. “We were just that close,” he said. “One word in one speech changed history.”

You don’t have to accept that alternate history to understand that war propaganda can have all sorts of unforeseen consequences, as can the wars themselves. That may seem obvious to the point of tautology, but people accept this stuff again and again.

Like under our previous president. “We knew,” Barack Obama said on March 28, 2011, “that…if we waited one more day, Benghazi, a city nearly the size of Charlotte, could suffer a massacre that would have reverberated across the region and stained the conscience of the world. It was not in our national interest to let that happen. I refused to let that happen….Some nations may be able to turn a blind eye to atrocities in other countries. The United States of America is different. And as president, I refused to wait for the images of slaughter and mass graves before taking action.”

We know now that the congressionally unauthorized, U.S.-led regime-change war in Libya was not, as former Secretary of State Hillary Clinton repeatedly bragged on the presidential campaign trail, “smart power at its best.” It was one of the major causes of Middle Eastern instability and misery over the past decade. But what we’ve forgotten, because our political discourse is cripplingly trivial, is that Obama’s bar-lowering justication was hysterical.

“This policy,” concluded a detailed and damning post-facto report by the British House of Commons, “was not informed by accurate intelligence. In particular, the [allies] failed to identify that the threat to civilians was overstated and that the rebels included a significant Islamist element. By the summer of 2011, the limited intervention to protect civilians had drifted into an opportunist policy of regime change. That policy was not underpinned by a strategy to support and shape post-Gaddafi Libya. The result was political and economic collapse, inter-militia and inter-tribal warfare, humanitarian and migrant crises, widespread human rights violations, the spread of Gaddafi regime weapons across the region and the growth of ISIL in North Africa.”

Western intelligence agencies, the report found, “could not verify the actual threat to civilians posed by the Gaddafi regime [and] selectively took elements of Muammar Gaddafi’s rhetoric at face value….[S]trategy was founded on erroneous assumptions and an incomplete understanding of the evidence.”

American administrations going to war routinely exaggerate threats, Hitlerize enemies, euphemize foreign casualties, and bend tales of U.S. heroism beyond all human recognition, as any spelunkings down the rabbit holes of Jessica Lynch and Pat Tillman will reveal. The world has never seen an arsenal as powerful as ours, and Lord Acton had a point about that power stuff.

The purpose of bringing up past treacheries is not to sink into an enervating nihilism, or intellectually facile whataboutism, or even what the kids now sneer at as “both-sidesism.” America is not Iran; Trump is not Obama; a drone strike is not the Iraq War.

But the fog of war, the temptations of power, the quickening heartbeat of fight-or-flight patriotism—these are, or at least should be, advertisements for human fallibility, for our stubborn inability to recognize certain patterns, particularly in the way each of us thinks. And it should make us more reluctant to give the commanders more authority.

Instead, too many people turn off their brains once the battle bugle calls. “Decisive shock therapy to revive the American spirit would surely come with a U.S. invasion of Iraq,” current White House economic advisor Larry Kudlow wrote for National Review in 2002. “The world will be righted in this life-and-death struggle to preserve our values and our civilization.” Or not.

As I tried to argue in one of those 9/11 anniversary columns some years ago, “If we are humble in the face of facts, and mindful of the unforeseen consequences that come with every grand plan, we might be more cautious about bending a sprawling nation’s resources and will in one direction or another.” That process necessarily begins by recognizing the limits of our own knowledge.

So no, don’t trust Donald Trump. Or Mike Pompeo. Or Mitch McConnell. And for God’s sake please don’t trust David Frum or Matthew Yglesias or Matt Welch either. America will continue being a bull in a china shop for as long as the body politic has more heft than humility. Those audacious enough to wield that awesome power, or to influence the wielding of it, will only begin to earn respect when they acknowledge the mountain of their own lies.

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The Libertarian Movement Needs a Kick in the Pants

In a provocative yet thoughtful manifesto, economist Tyler Cowen, a major figure in libertarian circles, offers a harsh assessment of his ideological confreres:

Having tracked the libertarian “movement” for much of my life, I believe it is now pretty much hollowed out, at least in terms of flow. One branch split off into Ron Paul-ism and less savory alt right directions, and another, more establishment branch remains out there in force but not really commanding new adherents.  For one thing, it doesn’t seem that old-style libertarianism can solve or even very well address a number of major problems, most significantly climate change. For another, smart people are on the internet, and the internet seems to encourage synthetic and eclectic views, at least among the smart and curious. Unlike the mass culture of the 1970s, it does not tend to breed “capital L Libertarianism.” On top of all that, the out-migration from narrowly libertarian views has been severe, most of all from educated women.

As an antidote, Cowen champions what he calls “State Capacity Libertarianism,” which holds that a large, growing government does not necessarily come at the expense of fundamental individual rights, pluralism, and the sort of economic growth that leads to continuously improved living standards. Most contemporary libertarians, he avers, believe that big government and freedom are fundamentally incompatible, to which he basically answers, Look upon Denmark and despair: “Denmark should in fact have a smaller government, but it is still one of the freer and more secure places in the world, at least for Danish citizens albeit not for everybody.”

In many ways, Cowen’s post condenses his recent book Stubborn Attachments, in which he argues politics should be organized around respect for individual rights and limited government; policies that encourage long-term, sustainable economic growth; and an acknowledgement that some problems (particularly climate change) need to be addressed at the state rather than individual level. You can listen to a podcast I did with him here or read a condensed interview with him here. It’s an excellent book that will challenge readers of all ideological persuasions. There’s a ton to disagree with in it, but it’s a bold, contrarian challenge to conventional libertarian attitudes, especially the idea that growth in government necessarily diminishes living standards.

I don’t intend this post as a point-by-point critique of Cowen’s manifesto, whose spirit is on-target but whose specifics are fundamentally mistaken. I think he’s right that the internet and the broader diffusion of knowledge encourages ideological eclecticism and the creation of something like mass personalization when it comes to ideology. But this doesn’t just work against “capital L Libertarianism.” It affects all ideological movements, and it helps explain why the divisions within groups all over the political spectrum (including the Democratic and Republican parties) are becoming ever sharper and harsher. Everywhere around us, coalitions are becoming more tenuous and smaller. (This is not a bad thing, by the way, any more than the creation of new Christian sects in 17th-century England was a bad thing.) Nancy Pelosi’s sharpest critics aren’t from across the aisle but on her own side of it. Such a flowering of niches is itself libertarian.

Cowen is also misguided in his call for increasing the size, scope, and spending of government. “Our governments cannot address climate change, much improve K-12 education, fix traffic congestion,” he writes, attributing such outcomes to “failures of state capacity”—both in terms of what the state can dictate and in terms of what it can spend. This is rather imprecise. Whatever your beliefs and preferences might be on a given issue, the scale (and cost) of addressing, say, climate change is massive compared to delivering basic education, and with the latter at least, there’s no reason to believe that more state control or dollars will create positive outcomes. More fundamentally, Cowen conflates libertarianism with political and partisan identities, affiliations, and outcomes. I think a better way is to define libertarian less as a noun or even a fixed, rigid political philosophy and more as an adjective or “an outlook that privileges things such as autonomy, open-mindedness, pluralism, tolerance, innovation, and voluntary cooperation over forced participation in as many parts of life as possible.” I’d argue that the libertarian movement is far more effective and appealing when it is cast in pre-political and certainly pre-partisan terms.

Be all that as it may, I agree that the libertarian movement is stalled in some profound ways. A strong sense of forward momentum—what Cowen calls flow—among self-described libertarians has definitely gone missing in the past few years, especially when it comes to national politics (despite the strongest showing ever by a Libertarian presidential nominee in 2016). From the 1990s up through a good chunk of the ’00s, there was a general sense that libertarian attitudes, ideas, and policies were, if not ascendant, at least gaining mindshare, a reality that both energized libertarians and worried folks on the right and left. In late 2008, during the depths of the financial crisis and a massive growth of the federal government, Matt Welch and I announced the beginning of the “Libertarian Moment.” This, we said, was

an early rough draft version of the libertarian philosopher Robert Nozick’s glimmering “utopia of utopias.” Due to exponential advances in technology, broad-based increases in wealth, the ongoing networking of the world via trade and culture, and the decline of both state and private institutions of repression, never before has it been easier for more individuals to chart their own course and steer their lives by the stars as they see the sky.

Our polemic, later expanded into the book The Declaration of Independents, was as much aspirational as descriptive, but it captured a sense that even as Washington was about to embark on a phenomenal growth spurt—continued and expanded by the Obama administration in all sorts of ways, from the creation of new entitlements to increases in regulation to expansions of surveillance—many aspects of our lives were improving. As conservatives and liberals went dark and apocalyptic in the face of the economic crisis and stalled-out wars and called for ever greater control over how we live and do business, libertarians brought an optimism, openness, and confidence about the future that suggested a different way forward. By the middle of 2014, The New York Times was even asking on the cover of its weekly magazine, “Has the ‘Libertarian Moment Finally Arrived?

That question was loudly answered in the negative as the bizarre 2016 presidential season got underway and Donald Trump appeared on the horizon like Thanos, blocking out the sun and destroying all that lay before him. By early 2016, George Will was looking upon the race between Trump and Hillary Clinton and declaring that we were in fact not in a libertarian moment but an authoritarian one, regardless of which of those monsters ended up in the White House. In front of 2,000 people gathered for the Students for Liberty’s annual international conference, Will told Matt and me:

[Donald Trump] believes that government we have today is not big enough and that particularly the concentration of power not just in Washington but Washington power in the executive branch has not gone far enough….Today, 67 percent of the federal budget is transfer payments….The sky is dark with money going back and forth between client groups served by an administrative state that exists to do very little else but regulate the private sector and distribute income. Where’s the libertarian moment fit in here?

With the 2020 election season kicking into high gear, apocalypticism on all sides will only become more intense than it already is. Presidential campaigns especially engender the short-term, elections-are-everything partisan thinking that typically gets in the way of selling libertarian ideas, attitudes, and policies.

Cowen is, I think, mostly right that the libertarian movement is not “really commanding new adherents,” including among “educated women.” He might add ethnic and racial minorities, too, who have never been particularly strongly represented in the libertarian movement. And, increasingly, younger Americans, who are as likely to have a positive view of socialism as they are of capitalism.

Of course, as I write this, I can think of all sorts of ways that libertarian ideas, policies, and organizations actually speak directly to groups not traditionally thought of libertarian (I recently gave $100 to Feminists for Liberty, a group that bills itself as “anti-sexism & anti-statism, pro-markets & pro-choice.”) School choice, drug legalization, criminal justice reform, marriage equality, ending occupational licensing, liberalizing immigration, questioning military intervention, defending free expression—so much of what defines libertarian thinking has a natural constituency among audiences that we have yet to engage as successfully as we should. That sort of outreach, along with constant consideration of how libertarian ideas fit into an ever-changing world, is of course what Reason does on a daily basis.

All of us within the broadly defined libertarian movement need to do better. And in that sense at least, Cowen’s manifesto is a welcome spur to redoubling efforts.

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Congress Should Debate War, Not Mindlessly Cheer for It

Things are moving quickly in the aftermath of yesterday’s surprise assassination of Qassim Suleimani, the longtime leader of Iran’s Revolutionary Guard and key figure in the Iranian regime.

The Pentagon has approved plans to send 3,000 more troops to the region. But the debate over the next steps must now shift to Congress, as the Constitution demands. Sen. Tim Kaine (D–Va.) has announced plans to introduce a war powers resolution in the Senate, forcing a debate over whether the U.S. should go to war with Iran or place limits on Trump’s ability to engage in hostilities.

Unfortunately, some members of Congress have failed so far to live up to the expectations that come with their office. The constitutional role of elected officials is not to cheerlead a major escalation of a nearly 17-year-old conflict; it is to consider what is in the best interest of the American people. But many GOP lawmakers preferred to cheerlead, often comparing Suleimani’s assassination to the killings of terrorist leaders like Osama bin Laden.

This is dangerously faulty logic. Whatever you think of extrajudicial killings of nonstate terrorists, what the United States did Thursday night is an entirely different matter. Terror cells and militias can sometimes be weakened or even destroyed by taking out top leaders. Soleimani is a high-ranking official within the Iranian military, which is not going to collapse because he’s been eliminated.

As for assassinating “evil bastard[s] who murdered Americans”: If you do that without regard for circumstances or consequences, you aren’t pursuing a doctrine that will promote peace or security. It can as easily encourage more attacks against Americans.

Some Democrats haven’t been great on these issues either. Consider Sen. Chris Murphy (D–Conn.), who rushed to Twitter moments after the news of Suleimani’s death broke to ask some big questions: “did America just assassinate, without any congressional authorization, the second most powerful person in Iran, knowingly setting off a potential massive regional war?” Those are, indeed, exactly the types of questions a member of Congress should be grappling with today and in the days to come. But Murphy loses considerable credit because he had, just days earlier, criticized the Trump administration for failing to respond with more force after the U.S. embassy in Baghdad came under attack from an Iranian-backed militia.

It’s certainly fair for any member of Congress (or any American) to criticize the president’s actions, but “Whatever Trump is doing, I want the opposite” is neither a thoughtful nor a useful attempt at fixing America’s flawed foreign policy.

Just as neither party has a monopoly on stupid reactions to Suleimani’s killing, the serious responses have been transpartisan as well:

While it is tempting to view the domestic political reactions to Suleimani’s assassination as a typical partisan game, something more important is also happening here. The executive branch has had free reign—under presidents from both major parties—to engage in a destructive, ill-concieved “War on Terror” that has destabilized the Middle East and caused massive human suffering. Since 9/11, more than 500,000 people have been killed in conflicts across the Middle East and Central Asia, and most of them weren’t terrorists.

Now the United States has committed an act of war against yet another country. The threat of open warfare with Iran is now greater than at any time in recent history. The risk now facing Americans—military personnel and civilians—in Iraq and elsewhere is real, as the State Department made clear this morning when it advised all Americans in Iraq to get the hell out as soon as possible. And we may see yet more erosion of Congress’ ability to control when the country goes to war. Any politician using Thursday’s attack merely to score political points should not be taken seriously.

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Mark Your Calendar: Next Week The Fed’s Liquidity Drain Begins

Mark Your Calendar: Next Week The Fed’s Liquidity Drain Begins

What goes up, must come down, at least in theory.

Ever since the start of October when the Fed launched QE4 – or as some still call it “Not QE” – in response to the Sept repo crisis, figuring out the market has been pretty simple: if the Fed’s balance sheet goes up so does the S&P500, and vice versa.

The good news for traders is that for the past three months, the Fed’s balance sheet rose 11 of 12 weeks, and declined just 1 of 12, and magically, the S&P did just that as well.

However, now that the year-end repo scare is history at least until the April 15 tax date and certainly the next year end, it’s time for the Fed to start shrinking its balance sheet, mostly by allowing existing term repo operations to expire without being rolled over. Conveniently, the FOMC Minutes released moments ago provided the Fed’s own big picture take on when the massive liquidity injection since mid-September, which expanded the Fed’s balance sheet by $415BN in three and a half months…

… with the Fed pointing out its “expectations to gradually transition away from active repo operations [in 2020] as Treasury bill purchases supply a larger base of reserves” and specifically, “the calendar of repo operations starting in mid-January could reflect a  gradual reduction in active repo operations.

None of this is new, and it has almost become conventional wisdom that when the Fed starts draining liquidity, the market impact will be the polar opposite of what happened when it was injecting liquidity: i.e., stocks will drop.

So with the Fed highlighting mid-January as the period when the liquidity injection goes into reverse, here is some more details on just which dates will be critical: as Curvature’s Scott Skyrm points out, these will be the days when the Fed’s term repos maturing over the next few weeks, supposedly without being rolled into further term repos, or as he puts it, “during January, it will be interesting to see how the market reacts to the term RP ops maturing:”

  • $25 billion leaves the market on Monday,
  • $28.8 billion on Tuesday,
  • $18 billion next Friday, etc.

Said otherwise, just next week the Fed will drain nearly $72 billion in liquidity if term repos aren’t rolled.

Of course, perhaps “interesting” is not the right word, because it is clear that if liquidity is drained without a matching injection, the market reaction will be anything but favorable. That said, the Fed still has more term Repo ops scheduled to correspond with those term roll-off dates, with at least three more term RP ops of up to $35 billion scheduled in January. Whether or not banks decide to use these to roll existing maturing term repos will determine if the liquidity cliff starts hitting next week, or 3-4 weeks later. Finally, it will also depend on whether the Fed decides that it had overinjected the market with liquidity, and if it announces even more scheduled term repos in February and onward.

For now, however, here is a visual calendar of when some of the key December term repos mature over the next few days:


Tyler Durden

Fri, 01/03/2020 – 14:54

via ZeroHedge News https://ift.tt/35h63py Tyler Durden

American Oil Workers In Iraq Exiting Country At US Government Request

American Oil Workers In Iraq Exiting Country At US Government Request

Hours after the US drone attack which killed IRGC Quds Force General Qasem Suleimani, the US State Department issued an emergency alert urging all American citizens currently in Iraq to depart the country “immediately” due to “heightened tensions” in the region.

While urging Americans to take the earliest flights out of the country, it also informed citizens they must stay away from the US Embassy in Iraq, after earlier this week the Green Zone compound was stormed by pro-Iranian protesters and the outer walls set on fire. The US Embassy in Baghdad has already suspended all public consular activities.

Some European countries have also begun issuing travel alerts for their citizens in Iraq, with the French government informing people to avoid any public or large gatherings, and to stay “prudent and discreet” while also avoiding taking photographs in public venues. 

Additionally, foreign oil workers have begun departing Iraq, with Iraq’s Oil Ministry confirming early Friday that “a number of employees with US citizenship” working for oil companies in the south are readying to depart the country “in response to the request of their government.”

“The ministry asserts that the conditions are normal in oil fields throughout Iraq. Production and export were not affected,” the statement added, underscoring that the request for Americans to evacuate oil fields did not come from Baghdad authorities, but from Washington.

File image of Rumaila oil refinery near the city of Basra in Iraq, via the AP/WSJ.

And more broadly, the State Department had already updated its travel advisory in the wake of Tuesday’s embassy protests.

Its updated advisory for the region reads, “Numerous terrorist and insurgent groups are active in Iraq and regularly attack both Iraqi security forces and civilians,” according to the posting.


Tyler Durden

Fri, 01/03/2020 – 14:35

via ZeroHedge News https://ift.tt/37wZ79f Tyler Durden

Congress Should Debate War, Not Mindlessly Cheer for It

Things are moving quickly in the aftermath of yesterday’s surprise assassination of Qassim Suleimani, the longtime leader of Iran’s Revolutionary Guard and key figure in the Iranian regime.

The Pentagon has approved plans to send 3,000 more troops to the region. But the debate over the next steps must now shift to Congress, as the Constitution demands. Sen. Tim Kaine (D–Va.) has announced plans to introduce a war powers resolution in the Senate, forcing a debate over whether the U.S. should go to war with Iran or place limits on Trump’s ability to engage in hostilities.

Unfortunately, some members of Congress have failed so far to live up to the expectations that come with their office. The constitutional role of elected officials is not to cheerlead a major escalation of a nearly 17-year-old conflict; it is to consider what is in the best interest of the American people. But many GOP lawmakers preferred to cheerlead, often comparing Suleimani’s assassination to the killings of terrorist leaders like Osama bin Laden.

This is dangerously faulty logic. Whatever you think of extrajudicial killings of nonstate terrorists, what the United States did Thursday night is an entirely different matter. Terror cells and militias can sometimes be weakened or even destroyed by taking out top leaders. Soleimani is a high-ranking official within the Iranian military, which is not going to collapse because he’s been eliminated.

As for assassinating “evil bastard[s] who murdered Americans”: If you do that without regard for circumstances or consequences, you aren’t pursuing a doctrine that will promote peace or security. It can as easily encourage more attacks against Americans.

Some Democrats haven’t been great on these issues either. Consider Sen. Chris Murphy (D–Conn.), who rushed to Twitter moments after the news of Suleimani’s death broke to ask some big questions: “did America just assassinate, without any congressional authorization, the second most powerful person in Iran, knowingly setting off a potential massive regional war?” Those are, indeed, exactly the types of questions a member of Congress should be grappling with today and in the days to come. But Murphy loses considerable credit because he had, just days earlier, criticized the Trump administration for failing to respond with more force after the U.S. embassy in Baghdad came under attack from an Iranian-backed militia.

It’s certainly fair for any member of Congress (or any American) to criticize the president’s actions, but “Whatever Trump is doing, I want the opposite” is neither a thoughtful nor a useful attempt at fixing America’s flawed foreign policy.

Just as neither party has a monopoly on stupid reactions to Suleimani’s killing, the serious responses have been transpartisan as well:

While it is tempting to view the domestic political reactions to Suleimani’s assassination as a typical partisan game, something more important is also happening here. The executive branch has had free reign—under presidents from both major parties—to engage in a destructive, ill-concieved “War on Terror” that has destabilized the Middle East and caused massive human suffering. Since 9/11, more than 500,000 people have been killed in conflicts across the Middle East and Central Asia, and most of them weren’t terrorists.

Now the United States has committed an act of war against yet another country. The threat of open warfare with Iran is now greater than at any time in recent history. The risk now facing Americans—military personnel and civilians—in Iraq and elsewhere is real, as the State Department made clear this morning when it advised all Americans in Iraq to get the hell out as soon as possible. And we may see yet more erosion of Congress’ ability to control when the country goes to war. Any politician using Thursday’s attack merely to score political points should not be taken seriously.

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To See How Our Last ‘War on Terror’ Went Awry, Watch The Report

“You have to make this work! It’s only legal if it works!” yells a CIA functionary overseeing the torture of prisoners in overseas black sites.

She’s yelling at the two smarmy psychologists who came to the CIA to design and encourage the use of “enhanced interrogation techniques”—torture—on the men the CIA had secreted away after the September 11 attacks. The psychologists had insisted these measures would result in the CIA learning new actionable intelligence to help keep Americans safe from new terror attacks. It wasn’t working.

It seems unlikely that an actual CIA leader would yell something so on-the-nose, but this is The Report, a Hollywood attempt to dramatize not just the CIA torture that took place under President George W. Bush but the concealment of these tactics (from Congress and Bush himself), the fight by the Senate Intelligence Committee to investigate what happened, and ultimately the Obama administration’s failure to hold anybody to account for some truly terrible behavior.

The name of the movie is actually The Torture Report, but the word “torture” is cleverly redacted to indicate the secrecy level. The torture is not redacted from the movie, though; all of it (including waterboarding and a forced enema) is re-enacted in vivid flashbacks. The protagonist—investigator Daniel Jones, portrayed by Adam Driver—attempts to determine what happened at these CIA sites, why, and what laws might have been broken in the process.

The investigation itself (which was supported at first by almost the entire Senate Intelligence Committee only to see it become a partisan battleground during Obama’s presidency) represents only half the movie. The other half is the massive struggle to try to get any of the information into the hands of the public. We see how the CIA attempted to block its release and even engaged in illegal surveillance against the Senate staff, then accused the staffers of hacking into the computer system of America’s spy agency.

The movie’s available now on Amazon Prime. It’s a good time to watch it, given the American drone strike that just took out Iranian military leader Qassim Suleimani. As information about the torture became public knowledge, the government’s defenders insisted that this unauthorized and brutal behavior helped protect Americans and provided valuable actionable intelligence. But Jones’ investigation showed that the torture failed to provide the CIA with any intelligence it didn’t already have or was able to access by other means, a conclusion that was also reached by the CIA itself in an internal report (known as the Panetta Report after former CIA Director Leon Panetta). The investigation showed that many of the detainees the CIA tortured shouldn’t have been taken in the first place and didn’t even have useful information to share.

In hindsight, we can see that none of this helped stabilize the Middle East in any substantial way. We are most certainly not safer as a country as a result of the CIA’s torture methods. One lesson of The Report is that people in positions of power have a vested interest in telling us that whatever brutal actions they back will help keep America safe, even if that’s not really true.

And to be clear here, this is not a #Resistance movie. While The Report accurately portrays Senate Democrats as leaders who kept the investigation going, it also makes clear that the Obama administration is one of the forces working against them. Ted Levine plays former CIA Director John Brennan as a cocky and obnoxious jerk who seems interested only in protecting the CIA from criticism. Brennan, who tried to get Jones fired and possibly even charged with a crime, is unmistakably presented as a villain; his current critiques of the Trump administration do not shield him from criticism.

The film’s handling of Sen. Dianne Feinstein (D–Calif.), by a no-nonsense Annette Bening, is also interesting. The Report does not shy away from Feinstein’s authoritarian streak. She declares at one point in the movie that she believes whistleblower Edward Snowden is a traitor, and she later mentions her support for Obama’s secret drone warfare (newly relevant after Thursday’s assassination). Nobody challenges her views, unfortunately, but the movie also pivots from giving her the big anti-torture speech at the end to showing an actual clip of deceased Sen. John McCain (R–Ariz.) giving a speech on the Senate floor opposing the use of torture by the CIA.

The Report ends on the dour real-world reminder that there’s been no real punishment of the people involved in the decision to torture detainees—or even for the CIA staff who illegally snooped on Jones’ work. The current director of the CIA, Gina Haspel, oversaw one of the black sites in Thailand where waterboarding occurred. Brennan is now a television news regular as an intelligence analyst and expert. Advisors who push the country in harsh and violent directions rarely pay a price when they’re wrong. Keep that in mind as these same voices insist that whatever violence the Trump administration has in mind for Iran will make our country and the Middle East safer.

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To See How Our Last ‘War on Terror’ Went Awry, Watch The Report

“You have to make this work! It’s only legal if it works!” yells a CIA functionary overseeing the torture of prisoners in overseas black sites.

She’s yelling at the two smarmy psychologists who came to the CIA to design and encourage the use of “enhanced interrogation techniques”—torture—on the men the CIA had secreted away after the September 11 attacks. The psychologists had insisted these measures would result in the CIA learning new actionable intelligence to help keep Americans safe from new terror attacks. It wasn’t working.

It seems unlikely that an actual CIA leader would yell something so on-the-nose, but this is The Report, a Hollywood attempt to dramatize not just the CIA torture that took place under President George W. Bush but the concealment of these tactics (from Congress and Bush himself), the fight by the Senate Intelligence Committee to investigate what happened, and ultimately the Obama administration’s failure to hold anybody to account for some truly terrible behavior.

The name of the movie is actually The Torture Report, but the word “torture” is cleverly redacted to indicate the secrecy level. The torture is not redacted from the movie, though; all of it (including waterboarding and a forced enema) is re-enacted in vivid flashbacks. The protagonist—investigator Daniel Jones, portrayed by Adam Driver—attempts to determine what happened at these CIA sites, why, and what laws might have been broken in the process.

The investigation itself (which was supported at first by almost the entire Senate Intelligence Committee only to see it become a partisan battleground during Obama’s presidency) represents only half the movie. The other half is the massive struggle to try to get any of the information into the hands of the public. We see how the CIA attempted to block its release and even engaged in illegal surveillance against the Senate staff, then accused the staffers of hacking into the computer system of America’s spy agency.

The movie’s available now on Amazon Prime. It’s a good time to watch it, given the American drone strike that just took out Iranian military leader Qassim Suleimani. As information about the torture became public knowledge, the government’s defenders insisted that this unauthorized and brutal behavior helped protect Americans and provided valuable actionable intelligence. But Jones’ investigation showed that the torture failed to provide the CIA with any intelligence it didn’t already have or was able to access by other means, a conclusion that was also reached by the CIA itself in an internal report (known as the Panetta Report after former CIA Director Leon Panetta). The investigation showed that many of the detainees the CIA tortured shouldn’t have been taken in the first place and didn’t even have useful information to share.

In hindsight, we can see that none of this helped stabilize the Middle East in any substantial way. We are most certainly not safer as a country as a result of the CIA’s torture methods. One lesson of The Report is that people in positions of power have a vested interest in telling us that whatever brutal actions they back will help keep America safe, even if that’s not really true.

And to be clear here, this is not a #Resistance movie. While The Report accurately portrays Senate Democrats as leaders who kept the investigation going, it also makes clear that the Obama administration is one of the forces working against them. Ted Levine plays former CIA Director John Brennan as a cocky and obnoxious jerk who seems interested only in protecting the CIA from criticism. Brennan, who tried to get Jones fired and possibly even charged with a crime, is unmistakably presented as a villain; his current critiques of the Trump administration do not shield him from criticism.

The film’s handling of Sen. Dianne Feinstein (D–Calif.), by a no-nonsense Annette Bening, is also interesting. The Report does not shy away from Feinstein’s authoritarian streak. She declares at one point in the movie that she believes whistleblower Edward Snowden is a traitor, and she later mentions her support for Obama’s secret drone warfare (newly relevant after Thursday’s assassination). Nobody challenges her views, unfortunately, but the movie also pivots from giving her the big anti-torture speech at the end to showing an actual clip of deceased Sen. John McCain (R–Ariz.) giving a speech on the Senate floor opposing the use of torture by the CIA.

The Report ends on the dour real-world reminder that there’s been no real punishment of the people involved in the decision to torture detainees—or even for the CIA staff who illegally snooped on Jones’ work. The current director of the CIA, Gina Haspel, oversaw one of the black sites in Thailand where waterboarding occurred. Brennan is now a television news regular as an intelligence analyst and expert. Advisors who push the country in harsh and violent directions rarely pay a price when they’re wrong. Keep that in mind as these same voices insist that whatever violence the Trump administration has in mind for Iran will make our country and the Middle East safer.

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Mauldin: The Fed Is Creating A Monster Bubble

Mauldin: The Fed Is Creating A Monster Bubble

Authored by John Mauldin via MauldinEconomics.com,

Ignoring problems rarely solves them. You need to deal with them – not just the effects, but the underlying causes, or else they usually get worse.

In the developed world and especially the US, and even in China, our economic challenges are rapidly approaching that point. Things that would have been easily fixed a decade ago, or even five years ago, will soon be unsolvable by conventional means.

Central bankers are the ones to blame. In a sense, they are far more powerful and dangerous than the elected ones.

Hint: It’s nowhere good. And when you combine it with the fiscal shenanigans, it’s far worse.

Fixing Their Own Mistakes

Central banks weren’t always as responsibly irresponsible.

Walter Bagehot, one of the early editors of The Economist, wrote what came to be called Bagehot’s Dictum for central banks: As the lender of last resort, during a financial or liquidity crisis, the central bank should lend freely, at a high interest rate, on good securities.

The Federal Reserve came about as a theoretical antidote to even-worse occasional panics and bank failures. Clearly, it had a spotty record through 1945, as there were many mistakes made in the ‘20s and especially the ‘30s. The loose monetary policy coupled with fiscal incontinence of the ‘70s gave us an inflationary crisis.

Paul Volcker’s recent passing (RIP) reminds us of perhaps the Fed’s finest hour, stamping out the inflation that threatened the livelihood of millions. However, Volcker had to do that only because of past mistakes.

History’s Loosest Monetary Policy

Beginning with Greenspan, we have now had 30+ years of ever-looser monetary policy accompanied by lower rates. This created a series of asset bubbles whose demises wreaked economic havoc.

Artificially low rates created the housing bubble, exacerbated by regulatory failure and reinforced by a morally bankrupt financial system. And with the system completely aflame, we asked the arsonist to put out the fire.

Yes, we did indeed need the Federal Reserve to provide liquidity during the initial crisis. But after that, the Fed kept rates too low for too long, reinforcing the wealth and income disparities and creating new bubbles we will have to deal with in the not-too-distant future.

This wasn’t a “beautiful deleveraging” as you call it. It was the ugly creation of bubbles and misallocation of capital. The Fed shouldn’t have blown these bubbles in the first place.

On the Way to Crisis

The simple conceit that 12 men and women sitting around the table can decide the most important price in the world (short-term interest rates) better than the market itself is beginning to wear thin.

Keeping rates too low for too long in the current cycle brought massive capital misallocation. It resulted in the financialization of a significant part of the business world, in the US and elsewhere.

The rules now reward management, not for generating revenue, but to drive up the price of the share price, thus making their options and stock grants more valuable.

Coordinated monetary policy is the problem, not the solution. And while I have little hope for change in that regard, I have no hope that monetary policy will rescue us from the next crisis.

Let me amplify that last line: Not only is there no hope monetary policy will save us from the next crisis, it will help cause the next crisis. The process has already begun.

*  *  *

I predict an unprecedented crisis that will lead to the biggest wipeout of wealth in history. And most investors are completely unaware of the pressure building right now. Learn more here.


Tyler Durden

Fri, 01/03/2020 – 14:16

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FOMC Minutes Give Timeline Of Fed “Transitioning Away” From Repo Liquidity Bailout

FOMC Minutes Give Timeline Of Fed “Transitioning Away” From Repo Liquidity Bailout

Since statement and press conference on Dec 11th, where Powell reiterated that The Fed would be on hold unless something yuuge “material reassessment in the outlook” happened, gold is the best performing asset-class (outpacing stocks) as the dollar has been the laggard…

Source: Bloomberg

And while it has been volatile, expectations for Fed actions (implied by the market) in 2020 are now slightly more dovish than before the Fed meeting…once again pricing in at least one rate-cut this year…

Source: Bloomberg

Thirteen of 17 officials forecast rates would be unchanged through the 2020 U.S. presidential election year, according to updated economic projections issued at the time, with four penciling in a quarter-point increase.

Of course, the big issue that The Fed was quietly panicking about was the repo crisis, which they have extinguished (for now) thanks to hundreds of billions of dollars puked across the ‘turn’ to ensure the holes are filled. As we noted previously, the price of year-end stability was $414 billion… $256 billion in repo injections ($211.4 term and $44.3 in overnight) and $157.5 bn in Bill purchases.

Source: Bloomberg

All of which has lifted stocks globally…

Source: Bloomberg

And as a reminder, The Fed has begun – for all intent and purpose – monetizing US debt.

*  *  *

So what exactly are investors looking for in the Minutes that could spook markets? Not much in the traditional sense:

“There is a satisfaction of where they are with monetary policy but there’s uncertainty about the repo market and how it is working,” said Diane Swonk, chief economist with Grant Thornton in Chicago.

“The Fed is trying to keep the market liquid. Their comfort with the repo market is much less clear-cut. It does feel like a work in progress.”

But money-market participants are anxiously awaiting any signals that The Fed might give on its longer-run operational plans (as Fed’s Evans hinted earlier today at a standing repo facility – bailout fund – going forward).

“Any views on repo markets outlined in the minutes should probably be adjusted for the year-end results, which on net have likely bolstered the Fed’s confidence that they have regained control of repo markets,” NatWest strategists led by Blake Gwinn say in Friday note

Information on the Fed’s longer-run operational plans or even their “perceived role in stabilizing funding rates or tolerance for volatility,” would be welcomed, they said. NatWest expects the central bank to start pulling back on their direct repo involvement in early 2020, and to start tapering their reserve-adding bill purchases in 2Q

And so the highlights from the Minutes include:

  • *FED: RATES LIKELY APPROPRIATE FOR A TIME ABSENT MATERIAL CHANGE

  • *FED: MANY SAW RISKS SOMEWHAT TO DOWNSIDE, SOME RISKS HAD EASED

But…

  • *FED: EXPECT TO TRANSITION AWAY FROM ACTIVE REPO OPS MID-JAN

That is not what the market was hoping for.

*  *  *

Full FOMC Minutes below…


Tyler Durden

Fri, 01/03/2020 – 14:03

via ZeroHedge News https://ift.tt/39LJ75o Tyler Durden