Does This Mean War? Libertarian Foreign Policy Gets Real(ist)

Anti-interventionism and isolationism aren’t the
same thing. A preference for peace is far from a refusal to engage
the world or to defend your own interests. That said, libertarians
harbor a range of opinions on when the use of force is right, and
when it’s wrong. Dr. Ron Paul tells us that
military interventions by the United States after World War II were
unjustified. His son, Sen. Rand Paul (R-Ky.) engages an age
threatened by ISIS and wrestles
with questions
over when America should go to war.

Are human rights
real
? Is foreign
aid a failure
?

Join Reason writers and contributors as they search for a

libertarian realism
in the age of Putin, ISIS, and American
pessimism.

View this article.

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Today at SCOTUS: Did Congress Delegate Illegal Regulatory Powers to Amtrak?

Article 1, Section 1 of the U.S.
Constitution vests “all legislative powers” in the hands of
Congress. Yet in 2008 Congress placed vast regulatory powers in the
hands of Amtrak, a private railroad corporation charted by Congress
in 1970 under the mandate that it “shall be operated and managed as
a for-profit company.” Thanks to that 2008 power grant, however,
Amtrak now enjoys the privilege of developing federal regulations
that directly impact both its own economic success and that of its
competitors in the freight rail sector. Today the U.S. Supreme
Court will hear oral argument on whether or not Congress
overstepped its constitutional bounds when it gave Amtrak the power
to set federal rules governing the entire railroad industry.

At issue today in
Department of Transportation v. Association of American
Railroads
is the Passenger Rail and Improvement Act of
2008. Among other things, that law instructs Amtrak and the Federal
Railroad Administration (FRA) to “jointly develop” metrics and
regulatory standards governing timetables, on-time performance,
equipment, and other crucial aspects of the railroad business.
Should Amtrak and the FRA fail to reach consensus, a private
arbitrator may be summoned to settle the matter. In other words,
federal law lets a private arbitrator affirm the rule-making
judgment and authority of a private corporation over that of a
federal agency.

Unsurprisingly, Amtrak’s competitors filed suit. According to
the Association of American Railroads, whose members include
freight rail companies that own roughly 97 percent of the track
which Amtrak uses (and who also compete with Amtrak for track space
and priority), the federal metrics developed by Amtrak in 2009
impose ruinous costs on freight carries. Furthermore, the railroads
argue, because Amtrak is a private entity, it had no business
writing any sort of federal regulations in the first place.

That argument prevailed at the U.S. Court of Appeals for the
District of Columbia Circuit, which
overruled Congress
and came down against Amtrak in July 2013.
Writing for a unanimous 3-judge panel of the D.C. Circuit, Judge
Janice Rogers Brown chastised the federal government for bestowing
“unprecedented regulatory powers” on a private firm. The Obama
administration’s defense of the contested scheme, Brown argued,
violates the non-delegation doctrine and “vitiates the principle
that private parties must be limited to an advisory or subordinate
role in the regulatory process.”

Judge Brown got it right. According to federal law, Amtrak “is
not a department, agency, or instrumentality of the United States.”
It is a private entity seeking to maximize profit. Congress
therefore had no lawful right to delegate any legislative power to
this self-interested railroad corporation. The D.C. Circuit should
be affirmed. Amtrak and its federal enablers should lose.

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Job Market Growth Hovers Near 2-Year Lows, Fed’s Labor Market Index Shows

Despite the utter exuberance at Friday’s payrolls data -which ‘everyone’ saw as nothing but indicative of escape velocity and utopia in America’s near future – the Fed’s new multifactor model of the US jobs market shows growth sliding to just 2.9% MoM. This is the almost the slowest growth since Aug 2012.

 

 

 

As a reminder,

The Federal Reserve Labor Market Conditions Index is calculated as a weighted average based on 19 monthly labor market indicators togauge improvements in the labor market.

 

The 19 labor market variables used are:

 

the unemployment rate, the labor participation rate, part-time for economic reasons, private payroll employment, government payroll employment, temporary help employment, average weekly hours, average weekly hours of persons at work, the average hourly earnings, the composite help-wanted index, the hiring rate, the transition rate from unemployment to employment, the insured unemployment rate, job losers unemployed less than 5 weeks, the quit rate, job leavers unemployed less than 5 weeks, the Conference Board Survey on job availability, The NFIB Survey on hiring plans and difficulty to fill a job.

 

The Federal Reserve does not report the actual index but the seasonally adjusted average monthly change.

*  *  *




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Ronald Bailey Ponders a Futuro Caliente and Fucking For Forests at the U.N. Climate Meeting

Futuro CalienteThe 20th Conference of the Parties
(COP-20) to the United Nations Framework Convention on Climate
Change (UNFCCC) in Lima, Peru is about to shift into the high gear
as the second week of negotiations takes off. The meeting has
attracted delegates from 190 countries, as well as thousands of
activists. Delegates take Sunday off as a day of rest from their
planet-saving labors. So I went to see the Futuro Caliente (Future
Hot) art project at the Parque de la Reserva.

View this article.

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Los Angeles Apartments Are On Fire… Literally

A massive downtown Los Angeles fire – engulfing numerous apartment buildings – has blocked the northbound 101 Freeway and looks set to make the usual disastrous traffic in LA even more unbearable today. As The LA Times reports, more than 250 firefighters battled the blaze at an apartment tower under construction in the 900 block of Fremont Avenue. The images are simply stunning…

 

 

As Reuters reports,

Two freeways were closed as firefighters battled a large blaze in downtown Los Angeles early Monday, the Los Angeles Fire Department said.

 

"It's a large building, about a block long. The whole building is a total loss. The fire did spread into two neighboring buildings," said David Ortiz, a spokesman for the fire department. "The fire was going across the freeway."

 

Ortiz said there were no reports of injuries or fatalities in the fire, which consumed an apartment building that was still under construction.

 

He said more than 250 firefighters fought the fire, which was reported after 1:20 a.m. PST, and which was under control by 4:30 a.m. PST.

 

The fire was under control but not extinguished, and freeways would be opened soon, Ortiz said.

 

The fire spread to two neighboring buildings, including an office building on North Figueroa Street, where several stories were damaged by fire and water.

*  *  *

Stunning images…

 

*  *  *

Perhaps – like Blackstone believes – the apartment market is going up in smoke…




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EU’s Juncker Folds To Gazprom On South Stream Pipeline

Submitted by Pater Tenebrarum via Acting-Man blog,

Juncker Backtracks on EU’s South Stream Ban

How do you get €300 billion in (probably largely useless) “infrastructure investment” in Europe? Banning a $40 billion project from going forward is probably not going to help, not to mention that this one would actually have been useful. After Gazprom announced last week that it has had enough and is ditching the South Stream pipeline project (see “South Stream Dies” for details) after having invested $5 billion and run into countless politically motivated obstacles, EU commissariat president Juncker engaged in a back-tracking exercise, garnished with some nonsense about “Russia holding Bulgaria to ransom”. Very likely he got an earful from Bulgarian prime minister Boiko Borisov about the EU’s sabotage of the project:

“European Commission President Jean-Claude Juncker has insisted the $40 billion South Stream natural gas pipeline can still go ahead and accused Russia of holding EU-member Bulgaria to ransom when it said it had abandoned the project.

 

Speaking after talks with Bulgarian Prime Minister Boiko Borisov, whose country South Stream would traverse making it a major beneficiary, Juncker rebutted Russia’s statement that EU competition rules had killed it. He told reporters issues relating to the pipeline were not insurmountable and he was working with Bulgaria to address them.

 

Russia said on Monday it had abandoned the pipeline, which would have bypassed Ukraine, Gazprom’s traditional transit route for Russian gas, citing EU competition requirements for a pipeline’s ownership to be divorced from its cargo. It said it was working on an alternative route via Turkey.

 

Juncker accused Moscow of blackmailing Bulgaria, which retains strong political and economic ties with Moscow and is almost entirely dependent on Russia for its gas. “I am not accepting the simple easy idea that Bulgaria can be blackmailed as far as these energy relations are concerned,” Juncker said.

 

“We’ll take … all the necessary steps to make sure that our relations with Russia will be improved, but it doesn’t depend only on the willingness of the EU, of the European Commission. To dance a tango … you need two dancers.”

 

Borisov also said South Stream could be built and agreed it had to comply with EU rules, including legislation known as the third energy package, which limits how much of a pipeline a company can own if it also controls its contents. Further efforts to bring the project in line will be made on Tuesday, when EU energy ministers meet for regular talks. “I hope that all these technical details will be solved at this meeting including the third energy package,” Borisov said. He added he had not received any official notice from Russia that South Stream was not going ahead.

 

EU sources, speaking on condition of anonymity, said Russia’s calculation could have been that its announcement of South Stream’s demise would place the Commission under pressure from some member states to soften its regulatory stance. At the same time, Russia has a struggle [sic, ed.] to find the cash for South Stream, given a falling oil price and economic sanctions.”

(emphasis added)

A few remarks to the above: yes, the Bulgarians are understandably up in arms, but had it been up to them, the construction activities would never have been interrupted in the first place. As things stand, the previous Bulgarian government was badgered by the EU and visited by John McCain, whose primary mission was apparently to stop the pipeline from being built. The government announced that all construction on the pipeline would be stopped two hours after McCain left.

 

Boiko and JC

Boiko Borisovich, here pictured shortly before jumping down JC Juncker’s throat. We would recommend not angering him too much: he’s a former bodyguard with a black belt in karate. His nickname is “Batman” (no kidding!).

Photo by BGNES

Could it be that Gazprom announced the cancellation merely to put pressure on the EU Commission? It is certainly possible. Note, we doubt that lower oil prices are a “cause” of anything here. This is not an oil pipeline, it is a natural gas pipeline – which is a different, if related market. While bulk sales prices are not entirely independent of market prices, there are long term delivery contracts designed to give pricing and planning security to both consumers and producers.

However, Gazprom does have a financing problem – mainly due to EU sanctions. It can no longer refinance its short term foreign currency denominated debt in Western markets. Obviously this means the company will have to reassess some of its investment plans. And it should be clear that an investment that has so far run into nothing but obstacles from the EU bureaucracy is likely among those to be culled. In fact, even if the “competition” problems are sorted out (which we assume would be quite easy to do – key word: “North Stream”), Gazprom may decide not to go forward, because the financing issue could be seen as too risky.

Juncker says the EU will do whatever it can to improve relations with Russia and it is certainly true that if there are disagreements it always “takes two to tango”. However, let us stop to think for a moment what this means in unambiguous, clear language. From the perspective of the EU (and especially the US) leadership, it means that Russia’s government must accede 100% to every demand they make. We already pointed out that this is an essentially fascist foreign policy. Nothing but complete surrender is acceptable. We don’t think it would be impossible to come to an agreement regarding the Ukraine crisis that everybody could in theory live with (the über-hawks in both the US and Russia excepted – basically the neo-cons in the US and assorted nationalists in Russia. We do have a tad more understanding for the paranoia of former Eastern Bloc countries). By now it should be rather glaringly obvious though that economic sanctions and demonizing the Russian leadership at every opportunity won’t do the trick.

As an aside to all this, it certainly couldn’t possibly get more embarrassing. Only last Monday, the European State propaganda orga…sorry, the European mainstream press, printed triumphalist headlines like this one, which translated means “EU Victory Over Moscow’s Pipeline Policy” – below the headline we read “bureaucrats have brought Putin to his knees, not diplomats”. An appropriate comment on this would be a variation of a famous saying by King Pyrrhus of Epirus: “If we are victorious in one more battle with the Russians we shall be utterly ruined.”

 

Conclusion:

Although every bad thing that is not the fault of climate change is allegedly the fault of Putin, it seems the EU commissariat “didn’t really mean it” and wants to see South Stream built after all. Here is an idea: lock them all in a room with Borisov for an hour and let him use his special powers of persuasion on them; that should hasten the process.

 

boiko-karate

Boiko “Batman” Borisov in action

Photo via glasove.com / Author unknown

 

boiko knee-punch

That looks like it may have hurt.




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New Law Lets Courts Decide If You Are a Sensitive Enough Parent

TearsA new law in Great Britain could
criminalize normal parenting—the kind practice by people who are
not perfect every single second of every day. The so-called
“Cinderella Law” expands the definition of child cruelty to include
any form of “emotional, psychological or intangible harm,” writes
barrister Jon Holbrook in SpikedOnline:

Under the amended offence it will be possible for a
parent to be convicted of: smacking a child; not providing it with
regular meals; leaving a crying baby alone on the petrol forecourt
while visiting the station checkout; even ignoring teenage
angst. Indeed, the wayward and emotionally fragile teenager,
not to mention the teenager who dislikes his parents’ style of
parenting, should have little difficulty making a case for his
parents to be prosecuted. Defenders of the new law may guffaw at
these examples, and claim that such prosecutions could never
happen, but they are wrong.

Holbrook goes on to describe a few cases of parents arrested for
such everyday “crimes,” including Tom Haines, a dad who let his
two-year-old wait in the car for 10 minutes while he ran into the
store. He was convicted of child cruelty:

Fortunately, Tim Haines had his conviction overturned
on appeal after the Crown Court judge, on hearing what Haines had
done, asked the question: ‘Is that supposed to be a crime?’ It
ought to have been obvious that Haines did not treat his daughter
in a criminal way. Yet it clearly was not obvious to either the
police who arrested him, the Crown Prosecution Service that
prosecuted him or the judge in the magistrates’ court who convicted
him.

And that was before the Cinderella Law. That’s why
we should not allow the definition of “cruelty” to expand any
further. It’s already stretched too far.

free-range-kidsUntil recent times, child
cruelty was always understood as physical harm—beating,
starving, molesting. Things that parents did that were outright
wrong and directly resulted in pain. When we start arresting
parents for something that could go wrong, in the
very worst case scenario—”What if the child is snatched from the
car?”—no parent is safe. And that’s doubly true if the courts
resort to conjecture about the psychological impact of a parenting
style they disdain: “What if the child doesn’t feel nurtured
enough?” Does forgetting to put a love note in a child’s lunch
trigger a police investigation?

The state shouldn’t decide how to parent.

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McDonalds Implodes, Reports Worst US Sales In Over A Decade

If one ignores all traditional, staple indicators of a growing economy, such as stable (not plummeting) crude demand, stable (not plummeting) holiday spending and stable (not plummeting) McDonalds comp store sales, then indeed the US economy has “decoupled” from the rest of the world, and those who wish to demonstrate the same intellectual capacity as Tim Geithner, will welcome you to the (latest non-)recovery.

And yet for those, who are leery of seasonally-adjusted government data (showing soaring low-wage jobs offset by crashing employment in the energy sector and M&A synergies which mysteriously are never captured), or sentiment surveys and confidence polls (of Wall Street executives and government workers), here is the latest data from McDonalds. Showing the worst US comp store sales in nearly 12 years at -4.6%, one does wonder if following America’s inability to even pay for sub-$1 meals, mass starvation will follow?

McDonalds US comp store sales:

McDonalds global comp store sales:

And for all those who are blissfully ignoring the impact of the soaring USD on corporate profits, here is a wake up call from McDonalds:

The following items are expected to negatively impact fourth quarter results

  • $0.07 to $0.09 per share due to strengthening of the U.S. dollar against nearly all foreign currencies

But… but… lower oil prices!?

Source




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“We Are Down To The Final Myth That Animates The Blow-Off Phase Of Bubble Markets”

Submitted by John Rubino via Dollar Collapse blog,

Of all the problems with fiat currency, the most basic is that it empowers the dark side of human nature. We’re potentially good but infinitely corruptible, and giving an unlimited monetary printing press to a government or group of banks is guaranteed to produce a dystopia of ever-greater debt and more centralized control, until the only remaining choice is between deflationary collapse or runaway inflation. The people in charge at that point are in a box with no painless exit.

Prudent Bear’s Doug Noland describes the shape of today’s box in his latest Credit Bubble Bulletin:

Right here we can identify a key systemic weak link: Market pricing and bullish perceptions have diverged profoundly both from underlying risk (i.e. Credit, liquidity, market pricing, policymaking, etc.) and diminishing Real Economy prospects. And now, with a full-fledged securities market mania inflating the Financial Sphere, it has become impossible for central banks to narrow the gap between the financial Bubbles and (disinflationary) real economies. More stimulus measures only feed the Bubble and prolong parabolic (“Terminal Phase”) increases in systemic risk. In short, central bankers these days are trapped in policies that primarily inflate risk. The old reflation game no longer works.

In other words, most real economies (jobs, production of physical goods, government budgets) around the world are back in (or have never left) recession, for which the traditional response is monetary and fiscal stimulus — that is, lower interest rates and bigger government deficits. Meanwhile, the financial markets are roaring, which normally calls for tighter money and reduced deficits to keep the bubbles from becoming destabilizing.

Both problems are emerging simultaneously and the traditional response to one will make the other much, much worse. Some more specifics from Noland:

Let’s begin with a brief update on the worsening travails at the Periphery. The Russian ruble sank another 6.5% this week, increasing y-t-d losses to 37.9%. Russian (ruble) 10-year yields jumped another 146 bps this week to 12.07%…

 

Increasingly, emerging market contagion is enveloping Latin America. The Mexican peso was hit for 1.6% Friday, boosting this EM darling’s loss for the week to a notable 3.0%. This week saw the Colombian peso hit for 4.3%, the Peruvian new sol 1.1%, the Brazilian real 0.9% and the Chilean peso 0.6%. Venezuela CDS (Credit default swaps) surged 425 bps to a record 2,717 bps. Brazilian stocks were slammed for 5% this week and Mexican equities fell 2.2%…

 

Declining 1.3%, the Goldman Sachs Commodities Index fell to the low since June 2010. Crude traded to a new five-year low. Sugar fell to a five-year low, with coffee, hogs and cattle prices all hit this week.

 

And a quick look at the bubbling Core: The Dow 18,000 party hats were ready, although they will have to wait until next week. The S&P500 traded Friday to another all-time record. Semiconductor (SOX) and Biotech (BTK) year-to-date gains increased to 31.4% and 48.1%, respectively. The week also saw $4.0 Trillion of year-to-date global corporate debt issuance, an all-time record. Italian (1.98%), Spanish (1.83%) and Portuguese (2.75%) yields traded to all-time record lows again this week.

 

What differentiates today’s reflation from those that “worked” in the past? The current reflation has overwhelmingly manifested within the Financial Sphere. And that’s the essence of why I believe the Bubble is now running on borrowed time. It’s a critical issue that goes completely unrecognized these days: In the end, Financial Sphere inflations are unsustainable…. The entire world believes central bankers will support stock, bond and asset prices. Everyone believes central bankers will ensure liquid markets. Most believe global policymakers will forestall financial and economic crisis for years to come. And it is these beliefs that account for record securities prices in the face of a disconcerting world.

We are, in short, down to the final myth that animates the blow-off phase of most bubbles: that of the omnipotent government/central bank which likes the status quo and has the power to maintain it. They don’t have that power, of course, or else financial bubbles would never burst and we’d still be living in the golden age of junk bonds, dot-coms and subprime mortgages.

What’s different about this iteration is that instead of being confined to a single asset class, the bubble is in financial assets generally, including fiat currencies, government debt, corporate bonds and equities, along with all their related derivatives. Where previous bubbles accounted for hundreds of billions or at most one or two trillion dollars, this one is denominated in hundreds of trillions spread from emerging market bonds to money center bank interest rate derivatives. The number of moving parts and the magnitude of the hidden risks guarantee that when it comes, the dissolution of today’s myth structure will be like nothing any of us have ever seen.




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