The Big Contraction – An Interview With James Howard Kunstler

Authored by Erico Matias Tavares via Sinclair & Co.,

James Howard Kunstler is an American author, social critic, public speaker and blogger. His thinking gained prominence after the publication of his book The Geography of Nowhere (1994), a history of American suburbia and urban development “because [he] believe[s] a lot of people share [his] feelings about the tragic landscape of highway strips, parking lots, housing tracts, mega-malls, junked cities and ravaged countryside that makes up the everyday environment where most Americans live and work.” This was followed by The Long Emergency (2005) and most recently Too Much Magic (2012), both non-fictional books. Starting with World Made by Hand in 2008, he has written a series of science fiction novels about such a culture in the future.

 

Mr. Kunstler has lectured at Harvard, Yale, Columbia, Princeton, Dartmouth, Cornell, MIT, RPI, the University of Virginia and many other colleges, and he has appeared before many professional organizations such as the AIA, the APA and the National Trust for Historic Preservation.

E Tavares: Thank you for being with us today. You have been writing about worsening societal issues, what you call “entropy in action”, for many years. Broadly speaking, why do you think the US is in so much trouble?

JH Kunstler: We’ve been sowing the seeds for our predicament since the end of World War II. You might even call this process “The Victory Disease.” In practical terms it represents sets of poor decisions with accelerating bad consequences. For instance, the collective decision to suburbanize the nation. This was not a conspiracy. It was consistent with my new theory of history, which is Things happen because they seem like a good idea at the time.

In 1952 we had plenty of oil and the ability to make a lot of cars, which were fun, fun, fun! And we turned our war production expertise into the mass production of single family houses built on cheap land outside the cities. But the result now is that we’re stuck in a living arrangement with no future, the greatest misallocation of resources in the history of the world.

Another bad choice was to offshore most of our industry. Seemed like a good idea at the time; now you have a citizenry broadly impoverished, immiserated, and politically inflamed.

Of course, one must also consider the possibility that industrial society was a historic interlude with a beginning, middle, and end, and that we are closer to the end of the story than the middle. It was, after all, a pure product of the fossil fuel bonanza, which is also coming to an end (with no plausible replacement in view.) I don’t view all this as the end of the world, or of civilization, per se, but we’re certainly in for a big re-set of the terms for remaining civilized.

I’ve tried to outline where this is all going in my four-book series of the “World Made By Hand” novels, set in the near future. If we’re lucky, we can fall back to sets of less complex social and economic arrangements, but it’s unclear whether we will land back in something like the mid-nineteenth century, or go full-bore medieval, or worse. One thing we can be sure of: the situation we face is one of comprehensive discontinuity — a lot of things just stop, beginning with financial arrangements and long-distance supply lines of resources and finished goods.

Then it depends whether we can respond by reorganizing life locally in this nation at a finer scale — if it even remains a unified nation. Anyway, implicit in this kind of discontinuity is the possibility for disorder. We don’t know how that will go, and how we come through it depends on the degree of disorder.

ET: Fair points, but one remarkable feature of Western civilization has been its resilience. In less than a decade the US has been able not only to reverse the historical decline in domestic crude oil production but also come up with natural gas as an expansive new source of energy. It now exports both of these commodities. Ditto for food production, where it can afford the luxury of using 40% of its corn production as car fuel. Doesn’t all this contradict what you had postulated in “The Long Emergency” back in 2005?

JHK: We flatter ourselves a bit to harp on our “resilience.” More realistically, history is an emergent process and societies are emergent phenomena which necessarily respond to the circumstances that reality presents. Sh*t happens and sh*t unhappens and then re-happens differently. The oil situation is grossly misunderstood by the public, including you, as implicit in the question you have just put to me.

We are not exporting any meaningful quantities of oil or natural gas. In fact we’re still importing nearly 8 million barrels of oil a day. The shale oil “miracle” has largely been a manifestation of low interest lending into an industry that can’t pay back its loans, even as it produces like mad at a loss. You can look at it as a simple equation: oil over $75 a barrel crushes economies and oil under $75 a barrel crushes oil companies. To date, American oil companies have not made a red cent off the shale oil “miracle.”

It seemed like a good idea at the time, and it kept a lot of people busy for a while, but it was essentially a stunt that is not paying for itself and it has a short horizon. The public only sees lower gasoline prices at the pump; they have no idea how low prices are wrecking the oil industry. The result of all this will be an incrementally smaller global oil industry and fewer customers for its products — without anything to replace it.

The crux of the matter is the falling Energy Return on Investment (EROI). In the 1950s you got 100 barrels of Texas crude for every equivalent barrel of energy you sunk into the project. That’s 100 to 1. Shale oil gives you about 5 to 1. Tar sands are a little worse. The worldwide average EROI these days is 17 to 1 (including Arabian oil, deep water, etc.). We can’t run all the systems of our “advanced” society at those ratios, and that is why we have been running up the debt so dramatically — borrowing from the future to cover the cost of living as we do.

And that is exactly why we are heading into financial clusterf*ck as it becomes increasingly evident that the debt will never be paid back. This will wreck the banking system, and that will force everything else to change, including the dynamic of how we produce and distribute food. So, no, none of what I am saying here contradicts my 2005 book, “The Long Emergency”, though it has played out with some strange twists in the story.

ET: Another theme you talked about in that book is that in order to cope with looming energy and food crises Americans would have to eventually live in smaller-scale, localized and semi-agrarian communities. All part of a process you call the Big Contraction.

However, a McKinsey Global Institute research paper from 2012 predicts quite the opposite for most of the world in the coming years, as depicted in the graph above. Indeed, growing urbanization has been one of the major trends so far in the 21st century. What do they see here that you don’t?

JHK: McKinsey’s prescience may be on a level with what the CIA failed to see in the 1990 collapse of the Soviet Union. Everybody and his mother is predicting that our cities will only get bigger and bigger. I will impudently state that they are all mistaken. Our cities have attained a scale which cannot be sustained, given the capital and resource scarcities we face immediately ahead. This is what they don’t see: the fragility of the fossil fuel supply system (and everything that depends on it) and its relation to money and capital formation.

McKinsey and its compadres are dumb extrapolationists — they look at what’s been going on and they say we’ll only get more of it in a bigger package. These people are the “intellectual-yet-idiots” that Nassim Nicholas Taleb identifies so shrewdly.

For one thing, the successful places in the years ahead will be those places with a meaningful relationship to food production. I believe the action in US will shift to the now-derelict small towns and small cities, especially places around the extensive inland waterway system and the Great Lakes. The giant metroplexes, so-called, will contract, probably in a messy way that includes great losses of notional real estate value and battles between various ethnic groups as to who gets to inhabit the districts with remaining value (e.g. close to the waterfront).

This contraction has already occurred in many cities of the heartland — Detroit, St. Louis, Milwaukee, Cleveland, etc. In contrast, booming New York, Boston, San Francisco and Dallas are purely products of the financialization of economy, and disorder in the banking system will hit them very hard. The suburbs around these places are next to go. Their destiny is either slums, salvage, or ruins.

ET: One aspect that we find fascinatingly provocative in your work is your description of modern urban landscapes, and how instead of being welcoming social spaces they now cause anxiety, even repulsion. What have modern architects missed in relation to their predecessors? Is that in any way related to the cultural revolution of the 1960s, which profoundly impacted much of the Western world?

JHK: The architects are a dysfunctional sub-culture in themselves. Suffice it to say they are hand-maidens of the corporate racketeers and victims of a particularly virulent form of techno-narcissism that infects our culture of wishful thinking and solipsism.

But the condition of the landscape is a product of much more than architects. The suburban project comes to us courtesy of banking, the automobile and trucking interests, national chain retail, municipal planning officials (who know nothing of urban design), traffic engineers, and many other ultra-specialists who populate this matrix of racketeering. They have produced an everyday environment that is positively punishing to human neurology. It makes people sad, lonely, confused, angry, anxious, and despondent. They didn’t do it on purpose. It was just the blowback from their methods, customs, and practices. The zoning ordinances crafted and refined over a hundred years now mandate a suburban sprawl outcome in most American places.

Look, life is tragic. As I began to say in this interview, societies can make some pretty poor choices. Our choice to live in a drive-in utopia was a terrible blunder and now we’re stuck with the consequences. Notice that the outcome on the European landscape is still rather different. They will have plenty of problems in The Long Emergency, but at least they did not destroy their old city centres, and when the time for contraction comes, as it will, they have something of great value to contract back into.

ET: You talk about a “population overshoot” relating to demographic explosions in Africa and the Middle East that you claim cannot be sustained by the existing resources of those regions. Why do you say that?

JHK: Much of this region is desert wasteland. The populations of the “nations” in it (many boundaries drawn arbitrarily by the victors of World War One) have exploded numerically. The region can’t feed nor water itself. Nor employ its exploded population. It is purely a product of fossil fuel pseudo-prosperity. It went this way for less than a century and then it will be over.

For the moment these populations (especially the young men) are exploding in political violence. Categorically, “normal” life will not continue as it has. We’re already seeing the gross disintegration of whole societies. It will accelerate.

ET: The graph above shows youth employment (15-24 year olds) per quarter as a percentage of the same youth group for selected groups and countries. A contraction is quite evident here, especially post the 2008 financial crisis. Prospects certainly do not seem as rosy for them compared to prior generations. Do you agree?

JHK: Some things are very plainly self-evident. The relationships between energy flows, energy costs, capital formation, and productive enterprise are unravelling, and with that the economic roles for people to play, i.e. jobs.

The result is no further economic “growth” or expansion of productive activities. The “action” has shifted to financial racketeering which, being wholly dishonest and non-productive, will only go on so long. The dynamic here is already leading to political turmoil, which will get worse. It may end up as historically earthshaking as the Fall of the Roman Empire.

I’ve predicted that Japan will be the first advanced nation to “go medieval.” They had a lovely culture of high artistry in the pre-modern Edo period. They’ll be lucky to get back to something like that. (I think they miss it, and that Modernity has been a great Punishment upon them.)

ET: One region of the developed world that certainly seems primed for a Big Contraction is Europe. While it remains a food powerhouse, its domestic fossil fuel reserves are dwindling fast. Populations in many countries are rapidly getting old and there aren’t enough babies to pay for burgeoning welfare costs. And to add even more anxiety, those massive migration flows from Africa and the Middle East will likely end up there, causing further social strains, possibly even conflict. What do you make of all this?

JHK: It’s pretty clear that Europe is in for very hard times. They’ve kept the whole thing going on the EU / ECB debt game, and for a while they attempted to compensate for their demographic problems with immigration, but that, too, has gotten badly out-of-hand. I would go so far to say that Western Europe will try to expel its nonconforming Muslim population in the years ahead. It will be like Spain’s expulsion of the Moors all over again, only more widespread and bloodier.

That said, Modernity as we’ve known it is over in Europe. No more fossil fuels and no more New World to export surplus populations to. It’s an ugly set-up. They’ve been to that Dark Age movie before.

ET: Based on our own experience we very much sympathize with one way, perhaps the only way, you propose for the West to cope with all these serious challenges. And that is the revival of our small communities, centered on Nature and agriculture, as depicted in the picture above. How do you see this process unfolding? It seems that many people are still not thinking in that direction. 

JHK: As I said, societies are emergent phenomena. We have resisted the call to deliberately make changes because it was easier to keep the rackets running so the changes will be made for us, so to speak. Reality has mandates of its own. When it’s no longer easier to behave recklessly, we’ll behave differently.

Look, in 1917 it’s unlikely anyone would have predicted the near death of America’s small towns and inner cities. These days, few see the reversal of that at hand. Industrial agriculture is just one of the rackets out there that will not be able to continue. For one thing, that method of agriculture requires massive debt financing, and on that basis alone it will fail, not to mention the whole issue of fossil fuel based fertilizers and herbicides and the decline of soil quality.

When industrial agriculture wobbles, the system will have to revert to smaller farms that work differently and serve more local regional customers. I believe that will prompt the revival of our small town economies. The cities' unhappy fate will be to cope with the extinguished office-based rackets of our time: Too Big To Fail banking, insurance, real estate, medicine, social services, etc.

ET: Lastly, why should we trust a guy with a moustache who makes his own clothes and bakes his own cookies?

JHK: Well, that was just a gag, after all. I cook pretty well, but i don’t make my own clothes. I shaved off the moustache last fall.

Nobody has to "trust me.” I’m just putting it “out there” for your consideration. Then we’ll stand by to see how it really shakes out.

ET: Thank you very much for your insights. We very much recommend your books to anyone wanting to deepen their understanding of what we just discussed. All the best

JHK: Thank you.

via http://ift.tt/2oI7ZCK Tyler Durden

Intel Official Behind “Unmasking” Of Trump Associates Is “Very Senior, Very Well Known”

Day after day, various media outlets, well really mostly the NYT and WaPo, have delivered Trump-administration-incriminating, Russia-link-related tape bombs sourced via leaks (in the hope of keeping the narrative alive and "resisting."). It now turns out, according to FXN report, that the US official who "unmasked" the names of multiple private citizens affiliated with the Trump team is someone "very well known, very high up, very senior in the intelligence world."

As Malia Zimmerman and Adam Housley report, intelligence and House sources with direct knowledge of the disclosure of classified names (yes, yet another "unnamed source") said that House Intelligence Committee Chairman Devin Nunes, now knows who is responsible – and that person is not in the FBI (i.e. it is not James Comey)

Housley said his sources were motivated to come forward by a New York Times report yesterday which reportedly outed two people who helped Nunes access information during a meeting in the Old Executive Office Building. However, Housley’s sources claim the two people who helped Nunes "navigate" to the information were not his sources. In fact, Nunes had been aware of the information since January (long before Trump's 'wiretap' tweet) but had been unable to view the documents themselves because of "stonewalling" by the agencies in question.

For a private citizen to be “unmasked,” or named, in an intelligence report is extremely rare. Typically, the American is a suspect in a crime, is in danger or has to be named to explain the context of the report.

“The main issue in this case, is not only the unmasking of these names of private citizens, but the spreading of these names for political purposes that have nothing to do with national security or an investigation into Russia’s interference in the U.S. election,” a congressional source close to the investigation told Fox News.

The White House, meanwhile, is urging Nunes and his colleagues to keep pursuing what improper surveillance and leaks may have occurred before Trump took office. They’ve been emboldened in the wake of March 2 comments from former Obama administration official Evelyn Farkas, who on MSNBC suggested her former colleagues tried to gather material on Trump team contacts with Russia.

White House Press Secretary Sean Spicer said Friday her comments and other reports raise “serious” concerns about whether there was an “organized and widespread effort by the Obama administration to use and leak highly sensitive intelligence information for political purposes.”

“Dr. Farkas’ admissions alone are devastating,” he said.

Clearly this confirms what Evelyn Farakas said, accidentally implicated the Obama White House in the surveillance of Trump's campaign staff:

The Trump folks, if they found out how we knew what we knew about the Trump staff dealing with Russians, that they would try to compromise those sources and methods, meaning we would not longer have access to that intelligence.

Furthermore, Farkas effectively corroborated a New York Times article from early March which cited "Former American officials" as their anonymous source regarding efforts to leak this surveillance on the Trump team to Democrats across Washington DC.

* * *

In addition, citizens affiliated with Trump’s team who were unmasked were not associated with any intelligence about Russia or other foreign intelligence, sources confirmed. The initial unmasking led to other surveillance, which led to other private citizens being wrongly unmasked, sources said.

"Unmasking is not unprecedented, but unmasking for political purposes … specifically of Trump transition team members … is highly suspect and questionable,” according to an intelligence source. “Opposition by some in the intelligence agencies who were very connected to the Obama and Clinton teams was strong. After Trump was elected, they decided they were going to ruin his presidency by picking them off one by one."

* * *

So if the source isn't Comey, has anyone seen Jim Clapper recently? The answer should emerge soon, meanwhile the ridiculous game with very high stakes of spy vs spy, or in this case source vs source, continues.

The report summarized below in video format:

via http://ift.tt/2oqQVSv Tyler Durden

Tillerson Blasts Russia For “Ukraine Aggression” As Germany Slams Trump’s “Unrealistic” NATO Demands

Secretary of State Rex Tillerson tried to reassure America’s nervous European counterparts over Washington’s commitment to NATO on Friday but it didn’t quite work out as expected when he pressed them again to spend more on defense, triggering a sharp rebuke from Germany.

“As President Trump has made clear, it is no longer sustainable for the U.S. to maintain a disproportionate share of NATO’s defense expenditures,” Tillerson said at a meeting of allied foreign ministers in Brussels.

Repeating what Trump told Angela Merkel during her US visit (when the US president reportedly handed the Chancellor an invoice for $375 billion for “overdue” NATO defense expenses) Tillerson said he wants member states of the North Atlantic Treaty Organization to agree at their summit in May to increase such spending by the end of the year or to make concrete plans to reach? 2% of gross domestic product by 2024—a target the Germans have contested.

What set off NATO ally anger however was Tillerson’s suggestion that the U.S. would prefer to micromanage the process, and wants to see annual milestones that would ensure the defense investment pledge? is implemented by the 2024 deadline, the WSJ reported.


NATO Foreign Ministers take part in a meeting at the Alliance’s headquarters

in Brussels, Belgium March 31, 2017. REUTERS/Yves Herman

Germany’s Foreign Minister Sigmar Gabriel was particularly incensed, acknowledging that while Germany should spend more, he said demands for spending 2% of GDP were “totally unrealistic.” To meet the U.S. target, he said, Germany would have to increase spending by some €35 billion ($37 billion).

Two percent would mean military expenses of some €70 billion. I don’t know any German politician who would claim that is reachable nor desirable,” Gabriel told the first meeting of NATO foreign ministers attended by Tillerson.

“The United States will realize it is better to talk about better spending instead of more spending,” he said, noting that humanitarian, development and economic aid to stabilize countries and regions should also count.

As the WSJ adds, Gabriel declined to answer questions about whether Germany intended to develop the kind of spending plans pushed by the U.S. Raising German military spending—now at about 1.2% of GDP—has long been seen by the U.S. as key to Europe shouldering more of its own defense.

Gabriel, a member of the left-leaning Social Democratic Party, has stepped up his criticism of further spending increases as September elections near, arguing that a strong defense isn’t enough to ensure security.

 

German Chancellor Angela Merkel, of the ruling Christian Democrats, has been more supportive of increased military spending than the SPD, who is a junior partner in her governing coalition.

Germany’s anger erupted first shortly after Trump’s meeting with Merkel earlier this month, when he made waves in Berlin by tweeting that “Germany owes…vast sums of money to NATO,” an accusation that roiled German officials.

Despite Germany’s rebuke, NATO Secretary-General Jens Stoltenberg embraced the push by the U.S. and said Europe must raise its spending and improve its military capabilities. “Increased military spending isn’t about pleasing the United States. It is about investing more in European security because it is important to Europe,” Stoltenberg said.

Stoltenberg noted that the U.S. has demonstrated its commitment, including by adding troops in Eastern Europe this year as part of a force meant to deter Russia. While Stoltenberg rejected Gabriel’s call to include non-military spending toward the goal, he said Germany was moving “in the right direction” with more military spending after years of cuts.

* * *

Meanwhile, Tillerson remained unswayed, and said allies will need to pay up or outline plans for meeting that target when NATO leaders meet on May 25 – the first NATO which will be attended by Trump himself. Trump has famously criticized NATO as “obsolete” and suggested Washington’s security guarantees for European allies could be conditional on them spending more on their own defense. He has also said he wants NATO to do more to fight terrorism.

“Our goal should be to agree at the May leaders meeting that by the end of the year all allies will have either met the pledge guidelines or will have developed plans that clearly articulate how…the pledge will be fulfilled,” Tillerson said.

U.S. defense expenditure makes up about 70 percent of the total NATO allies’ defense spending. Only four European NATO members – Estonia, Greece, Poland and Britain – meet the two-percent target.

While US demands for more money from NATO allies did not sit well with Germany, Tillerson did offer assurances of Washington’s commitment to NATO during his brief stop in Brussels, although U.S. officials said he did not have time for one-on-one meetings, which according to Reuters are customary during such gatherings. As previously reported, Tillerson’s initial decision to skip his first meeting with NATO foreign ministers while keeping his commitment for a trip to Russia, sparked a media frenzy added to questions about the Trump administration’s commitment. The meeting was later rescheduled and he attended on Friday.

“The United States is committed to ensuring NATO has the capabilities to support our collective defense,” Tillerson said. “We will uphold the agreements we have made to defend our allies.”

* * *

Finally, in keeping with the recent momentum of renewed deterioration in relations US-Russian relations, Tillerson said NATO was fundamental to countering Russian aggression in Ukraine. As Bloomberg reports, “Tillerson sought to assuage worries that the new administration would seek closer ties with Russia at NATO’s expense, particularly after Trump said during the 2016 presidential campaign that the alliance was “obsolete.”

“Let me be very clear at the outset of my remarks: the U.S. commitment to NATO is strong and this alliance remains the bedrock for trans-Atlantic security,” Tillerson said Friday in Brussels. “The NATO alliance is also fundamental to countering both nonviolent, but at times violent, Russian agitation and Russian aggression.”

He said U.S. sanctions on Russia for annexing Crimea “will remain until Moscow reverses the actions that triggered our sanctions” and “we will continue to hold Russia accountable.”

Defense Secretary James Mattis, a retired general known for his straight talk, was even more outspoken. At a briefing in London on Friday, he said Russia’s “violations of international law are now a matter of record — from what happened with Crimea to other aspects of their behavior in mucking around inside other people’s elections, that sort of thing.”

 

It was a blunt reference to Russia’s hacking and leaking of Democratic documents in last year’s American presidential election, a campaign that U.S. intelligence agencies found was aimed at hurting Trump’s rival Hillary Clinton and ultimately at helping him win.

Meanwhile, as relations between the Kremlin and the White House deteriorate with every passing day before Trump has even met with Putin, accusations that Trump is a puppet of the Kremlin remain the topic du jour across the US media.

via http://ift.tt/2nnTK52 Tyler Durden

Colorado Governor Concedes Legal Marijuana Hasn’t Turned His State Into a Stoner Hellscape

Colorado Gov. John Hickenlooper didn’t want his residents to approve 2012’s ballot initiative legalizing recreational marijuana. But in a lengthy interview with The Denver Post‘s Alicia Wallace, the craft beer-brewing governor says the “worst nightmares” of legalization opponents “haven’t materialized.”

“We haven’t seen a spike in teenage use,” Hickenlooper told Wallace. “We haven’t seen a giant increase in people’s consumption of marijuana. Seems like the people who were using marijuana before it was legal, still are. Seems like the people who weren’t using marijuana before it was legal, still aren’t.”

Hickenlooper remains skeptical of his state’s success in taxing and regulating marijuana–he’s told other governors curious about legalizing marijuana, “I think they should still wait a year or two, maybe three years”–but he also appears committed to pushing back against any crackdown on legal weed by Attorney General Jeff Sessions and the Trump Justice Department:

Q: Colorado Attorney General Cynthia Coffman has invited Sessions to visit Colorado for a first-hand look at how the system operates here. If that were to happen, what would you say to him? What would you show him?

Hickenlooper: I think I would make the argument to Attorney General Sessions that I’d tell him, I opposed it. I thought this was too risky of an idea. No state wants to be in conflict with federal law, but our state passed this 55-45, our state supports it by more than 60-40 now. … I took an oath to uphold the Constitution of Colorado and I have an obligation to do everything I can to try and make this thing work.

Not exactly an emphatic defense of Colorado’s sovereignty, is it?

Hickenlooper also suggests to Wallace that he might veto two pending bills in the state legislature. One would legalize home delivery of marijuana products and the other would legalize the operation of membership-only clubs where people can publicly consume marijuana. His argument against the former is that delivery services may lead to underage consumption; his argument against the latter is that Amendment 64 was sold on the promise no one could consume in public, “[s]o I’m just trying to defend the will of the voters in that.”

But if teenage use hasn’t increased with legal pot retailing at $30 an ounce(!), I’d be curious to know exactly how couriers will dramatically alter the landscape. It’s also a bit odd to see Hickenlooper crow about the tax revenue from legal pot while denying out-of-state pot tourists a safe and legal place to consume their purchases. If consumers cannot legally consume marijuana in public or in their hotel rooms, and they also can’t join private clubs, are they supposed to pack it into their luggage and board a plane? Drive it across state lines? Head out to a federal park? None of those things are legal. And if Amendment 64 voters see the legalization of members-only pot clubs as a betrayal, they can vote in legislators to reverse it.

Here’s ReasonTV on Denver’s pot club crackdown, and why it’s a violation of free association:


from Hit & Run http://ift.tt/2no9yo0
via IFTTT

The DEA Has Stolen $3.2 Billion from Americans Without Charges Since 2007

In my post published earlier this week, Recent TSA Molestation Video Proves Americans Have Become Authority Worshipping Slaves, I noted the following:

Yeah, it’s disgusting, inappropriate and anathema to a free people, but that’s the point. We aren’t a free people. We’ve become a bunch of authority-worshiping subjects toiling on a plantation dominated by multi-national companies who write our laws and manipulate our thoughts through corporate media. The worst part is we don’t do anything about it. We elect Trump and then puff our chests out yelling stupid slogans like MAGA, as molestations from the TSA get worse. Well done everyone.

I was pleased that the above paragraph connected with many people, but for those of you who think I was being hyperbolic, take a look at the following excerpts from a piece recently published at The Washington Post, Since 2007, the DEA Has Taken $3.2 Billion in Cash from People Not Charged with a Crime:

The Drug Enforcement Administration takes billions of dollars in cash from people who are never charged with criminal activity, according to a report issued today by the Justice Department’s Inspector General.

Since 2007, the report found, the DEA has seized more than $4 billion in cash from people suspected of involvement with the drug trade. But 81 percent of those seizures, totaling $3.2 billion, were conducted administratively, meaning no civil or criminal charges were brought against the owners of the cash and no judicial review of the seizures ever occurred.

continue reading

from Liberty Blitzkrieg http://ift.tt/2ns1pQu
via IFTTT

Freedom Caucus in the Fray, Mike Pence’s Marriage Rules Violate the Law? P.M. Links

  • Not only is Vice President Mike Pence a bad person—because he doesn’t dine alone with women who are not married to him—he’s obviously breaking the law, says Vox.
  • Betsy DeVos says competition would help schools in the same way that competition has improved ride-sharing. People are condemning her for this metaphor, because they are stupid.
  • Critics of Charles Murray barely understand The Bell Curve.
  • Donald Trump vs. the Freedom Caucus.
  • Sean Spicer says “reality” dictates that Bashar al-Assad will remain president of Syria.

from Hit & Run http://ift.tt/2nnX5Ro
via IFTTT

Weekend Reading: Washington, We Have A Problem

Authored by Lance Roberts via RealInvestmentAdvice.com,

In this past weekend’s missive, I discussed the failure of Congress to get the Affordable Care Act (ACA) repealed, much less replaced. The problem, of course, is the failure to repeal the ACA leaves in question the ability to pass other agenda based items such as tax reform, border wall construction, repatriation or immigration reform. As I noted the debt ceiling debate, which is rapidly approaching, is the next major hurdle. To wit:

With the government currently at the ‘debt ceiling limit,’ and the June 1st deadline approaching for ‘extraordinary funding measures,’ Congress will need to address the FY18 budget resolution before it can act on tax reform. This is necessary to provide the ‘reconciliation instructions’ that allow Republicans to pass tax legislation with only 51 votes in the Senate (and therefore no Democratic support). Reaching an agreement on the FY budget resolution will not be easy; in the past, conservatives have demanded a balanced budget within ten years but this would require endorsing spending cuts (in non-binding form) that some centrist Republicans might oppose along with the BAT.

 

Given this backdrop, tax reform will probably not begin to move through the legislative process until after June at the earliest. Of course, while Wall Street believes ‘tax reform’ will be a much easier process than repealing health care, the reality is it could be just as tough as government entitlement programs, funding for Planned Parenthood, and other programs central to the Democrats, and some left-leaning Republicans, come under attack.
 

For the markets, which have ramped up since the election on ‘hopes’ of a quick implementation of reforms under the new Administration, the risk of disappointment is running high.” 

This assessment has not changed in the past week, and already we are beginning to discussions of border wall construction being postponed, along with infrastructure spending, and tax cuts being whittled down to just 28% for corporations vs. 15-20%. 

The last point is the most important given that current valuations in the market are currently being supported by the notion that tax cuts will lead to a profits expansion. The issue, however, remains that while profits may expand from paying lower taxes, and could be much less than currently hoped for, top line revenue growth still remains a missing ingredient as shown in the chart below. 

While anything is certainly possible, there is the simple issue that economic cycles do NOT last forever. With wage growth still stagnant, debt levels rising and inflation coming from all the wrong areas (health care, rent & gasoline), the risk of disappointment in the “hope” trade is very high.

Of course, you combine the risk of a “fiscal policy” error with the Fed on a “monetary policy tightening” cycle and you have all the ingredients for a bad outcome.

But then again, maybe this time will indeed “be different.”

Just some things I am thinking about this weekend as I catch up on my reading.


Trump/Fed/Economy


Markets


Research / Interesting Reads


“The United States have developed a new weapon that destroys people but it leaves buildings standing. It’s called the stock market.” – Jay Leno

via http://ift.tt/2nELNu0 Tyler Durden

Spicer Skewers Media For Defending Dr. Farkas, Calls Her Public Admissions of Collecting Intelligence on Trump ‘Devastating’

In today’s press conference at the White House, Sean Spicer shifted the conversation away from the nothing-burger of who told Chairman Nunes about the Trump team being surveilled by the Obama administration to the public comments made by Dr. Farkas — the former Deputy Assistant Secretary of Defense specializing in Russia, who said “get as much information as you can” to persons inside the intelligence apparatus — for the purposes of preserving intel on the Trump team in an effort to hide it from the incoming administration.

Spicer called her comments alone ‘devasting’ and posited the notion that had the media been treating the Trump administration fairly, they’d be more concerned with the intelligence leaks coming out of the Obama administration — surveilling Trump and his team — for reasons that are, indelibly, unclear.

Furthermore, he mentioned Hillary Clinton’s paid speaking fees from Russia, selling off 1/5th of America’s uranium supplies, and receiving personal phone calls from Vladimir Putin as actual legitimate Russian connections that should raise an eyebrow. In terms of Obama officials admitting to surveilling and safe keeping intelligence on the Trump team, Spicer thinks there was an attempt to do something that was politically motivated and should be investigated.

Immediately following Dr. Farkas’ comments were made on the Morning Joe show, revealing that the Obama administration had been surveilling the Trump team, the notion of how she might’ve come into contact with Trump team intelligence, after she had resigned from the pentagon, became a topic of discussion — which the media didn’t seem to grasp today with Spicer.

Here’s Spicer chastising the media for defending Dr. Farkas, instead of asking her questions as to how she had access to Trump intelligence, post resignation, and why she spread classified information in an effort to conceal it from the incoming administration.

Bradley Moss, an attorney who specializes in national security law, tweeted his dismay that Dr. Farkas’ public comments had become a topic of discussion, saying “OMG, yadda, yadda, yadda.” This is all a big inconvienence for those who’d rather spend their time mocking the President for alleging that Obama had, in fact, ordered ‘wiretapping’ done on him and his team. It’s even more troubling for them to learn, after the fact, that everything the President said was true.

Nevertheless, Dr. Farkas agreed with Moss, tweeting ‘Amen Brother. Who benefits from this fake news? R-U-S-S-I-A.’

Using her logic, anything that doesn’t impugn the character of the President of the United States, any defense for the rule of law as it pertains to the illegal transfer of classified documents and unmasking of persons, is, in fact, aiding and abetting the Russian government. In other words, she believes, arrogantly, that she is above the law — because she’s fighting the good fight against Mother Russia — defeating it for a second time in a renewed cold war.

Unreal.

Content originally generated at iBankCoin.com

via http://ift.tt/2nF66HL The_Real_Fly

D.C. Implements Oppressive Licensing for Child Care Workers at Behest of Early Education Advocates

Pre-schoolScientists say that higher education for pre-school child-care workers is a good idea. So of course D.C. is going to make it mandatory that child-care workers get associate’s degrees and completely screw over an entire class of lower-skilled workers.

Indeed, the argument is literally that lower-skilled workers shouldn’t be caring for children because that might mean that their precious, developing brains are not getting stimulated as much as they could be. But rather than passing that information along to parents to decide how much to evaluate the education of their child-care professionals as a priority, D.C. has decided to mandate more training.

The consequences are, of course, going to be absolutely awful for some people who are unable to get what the city’s demanding. From The Washington Post:

[F]or many child-care workers, who are often hired with little more than a high school diploma, returning to school is a difficult, expensive proposition with questionable reward.

Many already have more training than comparably paid jobs such as parking lot attendants, hotel clerks, and fast food workers. And unlike most professional fields, prospects are slim that a degree would bring a significantly higher income: a bachelor’s degree in early childhood education yields the lowest life-time earnings of any major.

Center directors have few resources to tap if they want to reward their better-educated employees. Many parents in the District are maxed out, paying among the highest annual tuitions nationally at $1800 a month. And government subsidies that help fund care for children from lower income families fall well below market rate.

In the end, early child-care teachers that go on to earn diplomas often leave their jobs to work in public schools, where they can earn substantially more.

One child-care center operator said that only two of her 16 employees have made it to associate’s degrees thus far, and one had quit because she simply couldn’t go back to school.

The news story doesn’t engage in the question of why parents can’t decide for themselves how important it is for their child-care workers to have advanced degrees. Perhaps that’s because early education advocates might not like the answers, once the realities of the likely cost increases get factored in.

There’s instead a heavy emphasis in the story on the mechanisms by which these poor workers might get subsidies or assistance to get the education they need to keep their livelihoods. There’s also no interest in exploring the increased attention to the major problems for the poor that are a direct result from occupational licensing programs. No doubt the same people who promote such programs would, for example, see Mississippi’s push to decrease the power of regulatory licensing programs as proof of how backward that southern state is.

To be sure, this D.C. law is a jobs program—it’s a jobs program for people who work in the field of post-secondary education itself. Nothing like using a regulatory mandate to create a demand for your educational services that might not exist otherwise. The story makes it abundantly clear that advocates for increased education of child-care workers—who, wouldn’t you know it, work in the field of education—want to spread this program well beyond D.C.’s borders.

Oh, incidentally, President Donald Trump and his daughter, Ivanka, have been proposing a massive child-care subsidy that would manifest via deductibles. That would perhaps help the wealthier D.C. residents cover increasing costs that would most certainly follow once child-care workers have advanced degrees.

But as has been noted, such a subsidy plan would not do much for lower-income families. And so not only would poorer families be even less able to afford child care, they’re also going to be locked out of jobs within the industry itself. Good work there, D.C.

By the way, as a useful reminder, science also says many of America’s early education programs are crap due to wasteful spending with poor oversight.

from Hit & Run http://ift.tt/2oktdu2
via IFTTT

Stocks End Best Quarter In Years With A Whimper But Gold Is Winner

So Q1 is over and this happened…

 

And the message is clear…

 

Gold wins…

It's been an interesting quarter…

  • Nasdaq best Quarter since Q4 2013
  • S&P best quarter since Q4 2015
  • Dow up 6 quarters in a row – since The Shanghai Accord (the longest streak since Q4 2006)
  • Financials up four quarters in a row
  • USD Index second worst quarter since Q3 2010
  • Gold second best quarter since Q3 2012
  • WTI Crude's worst quarter (and first losing quarter) since Q4 2015
  • US Crude Production had biggest quarter since Q3 2014

Nasdaq the big winner in US equities… (Trannies and Small Caps melted up to green in the last few days)

 

Energy was Q1's big loser, Financials managed to bounce off unch, and Tech was the big gainer…

 

Only 2Y Yields were higher over Q1 – that's with 2 rate hikes-ish…

The USD Index was a one-way trade in Q1 – down!

 

And for the month of March, gold also led (though most assets were negative)

Highlights of the month

  • Nasdaq up 5 months in a row (longest streak since May 2013)
  • Dow worst month since Oct 2016
  • S&P up 5 months in a row
  • Financials worst month since Sept 2016
  • USD Index second worst month since April 2016
  • HY Bonds' worst month since Oct 2016
  • WTI Crude's worst month since Jul 2016
  • US crude production is up 6 months in a row

Small Caps squeezed up to unchanged on the month and every effort was undertaken to keep the S&P green for March…BUT FAILED!

 

Financials were March's biggest loser, Tech the leader again…

 

Given all the vol in equities and crude oil, bonds ended the month practically unch… Policy Error?

 

Treasury yields have been trading in a very wide range for 5 months…

 

The dollar tumbled after The Fed's dovish rate hike…

 

Despite USD weakness, commodites all ended the month in the red – with Gold almost breaking even and crude ugly…

 

And finally for the week (after a big whipsaw last Friday on the pulled healthcare vote)…massive squeeze for Trannies and Small Caps

 

Ugly close for stocks with a big MOC Sell order…NOT off the lows…

 

Treasury yields leaked lower today as Dudley's dovish words sent risk-off, leaving yields unch for the week…

 

The dollar dropped to a session low in choppy trading after New York Fed’s Dudley said that 2 more rate increases in 2017 seem about right, though there’s no need to hurry given that the economy is far from overheating, but ended the week marginally higher…

 

Despite the dollar's gains, Crude squeezed over 5% higher on the week… Gold unch

 

WTI ended the week back above $50…

 

And gold above $1250 with Silver over $18 holding gains post Fed rate hike…

via http://ift.tt/2oizSV7 Tyler Durden