Thursday, March 31, 2016

Watering the Political Money Tree

from Bloomberg
A nonprofit with ties to Senator John McCain received a $1 million donation from the government of Saudi Arabia in 2014, according to documents filed with the U.S. Internal Revenue Service.

The Arizona Republican has strictly honorary roles with the McCain Institute for International Leadership, a program at Arizona State University, and its fundraising arm, the McCain Institute Foundation, according to his office. But McCain has appeared at fundraising events for the institute and his Senate campaign’s fundraiser is listed in its tax returns as the contact person for the foundation.

Though federal law strictly bans foreign contributions to electoral campaigns, the restriction doesn’t apply to nonprofits engaged in policy, even those connected to a sitting lawmaker.

Groups critical of the current ethics laws say that McCain’s nonprofit effectively gives Saudi Arabia -- or any other well-heeled interests -- a means of making large donations to politicians it hopes to influence.

“Foreign governments are prohibited from financing candidate campaigns and political parties,” Craig Holman, the government affairs lobbyist for ethics watchdog Public Citizen, said. “Funding the lawmakers’ nonprofit organizations is the next best thing.”

Clinton Foundation

Holman said that the Clinton Foundation, whose top donors include Australia, Norway, Saudi Arabia and Sweden, may have started the trend of foreign governments donating to nonprofits connected to political figures.

Founded in 1998 to raise money for then-President Bill Clinton’s presidential library, the Clinton Foundation accepted millions of dollars from foreign governments over the years, including while Hillary Clinton, now running for president, served as secretary of State during President Barack Obama’s first term. The foundation says that Clinton was not involved in its work when she worked for the Obama administration.

The Saudi donation to the McCain Institute Foundation may be the first congressional instance of that trend coming to light.

“The extent of this practice is difficult to gauge, of course,” Holman said, “because we only know about it when a nonprofit or foreign government voluntarily reveals that information.”

Donor Disclosures

The McCain Institute for International Leadership began voluntarily disclosing its donors on its website after an inquiry from USA Today in 2014. Donations are solicited by the institute’s own foundation, as well as the fundraising arm of Arizona State University, the ASU Foundation.

The website listed dozens of donors, including Chevron Corp., Cisco Systems Inc., FedEx Corp., Wal-Mart Stores Inc. and the nonprofit arms of General Electric Co. and Freeport-McMoRan Inc. It also listed a small donation, of less than $25,000, from the Danish embassy.

The institute didn’t originally disclose the 2014 donation from the Royal Embassy of Saudi Arabia. After an inquiry from Bloomberg News, the website was updated to note that the institute received more than $100,000 from the Saudi embassy. Documents filed with the IRS state that the donation totaled $1 million.

“The McCain Institute for International Leadership has decided to list as an individual donor on its website the Royal Embassy of Saudi Arabia,” Debbie Williams, vice president of communications for the ASU Foundation, wrote in an e-mail on behalf of the institute, “since those funds have been transferred to the ASU Foundation for the benefit of the McCain Institute.”

The Saudi embassy didn’t respond to a request for comment.

‘Global Leadership’

Since its launch in 2012, the institute has been “guided by the values that have animated the career” of McCain and his family, its mission statement says. It focuses on advancing “character-driven global leadership,” and runs an internship program, a debate series and hosts events on national security, human trafficking and other issues.

The institute’s executive director is Kurt Volker, a former ambassador to the North Atlantic Treaty Organization who also serves as a senior international adviser to lobbying firm BGR Group. BGR Group’s clients include Chevron, Raytheon Co. and the Center for Studies and Media Affairs at the Saudi Royal Court. Its nonprofit arm, the BGR Foundation, also donated at least $100,000 to the institute, according to its website.

The Saudi donation came at a time when the oil kingdom’s relationship with Washington was facing growing uncertainty. The Obama administration negotiated with Iran over its nuclear program while seeking to avoid or minimize any U.S. involvement in the Syrian conflict, both of which led to concerns in Riyadh. McCain was critical of the administration on both counts.

‘Only Natural’

“It’s only natural that a longtime and vocal supporter of the Saudi-U.S. alliance might be embraced by them this way,” said David Andrew Weinberg, a senior fellow with the conservative think tank Foundation for the Defense of Democracies. Weinberg estimates that Persian Gulf countries alone have contributed more than $100 million to presidential libraries and charities promoted by former presidents.

But such contributions usually don’t have to be disclosed, so it’s unclear how much money from the Saudi embassy or other foreign sources has gone to groups with ties to current and former U.S. officials or lawmakers.

The McCain Institute Foundation, the entity which reported receiving the donation, doesn’t list McCain as a trustee or officer. Nor does McCain list the organization on his personal financial disclosure forms, where members of Congress are required to disclose positions held outside government, even if uncompensated.

Initial Funding

But the foundation did receive its initial funding -- about $8.6 million -- from money left over from McCain’s 2008 presidential run, in a transaction permitted under campaign finance laws.

“In compliance with Senate ethics rules, Senator McCain’s role in the McCain Institute is honorary,” his spokeswoman, Julie Tarallo, said in an e-mail. She referred all other questions to the McCain Institute for International Leadership.

McCain has appeared at events for the institute, including its fundraising efforts and its annual, invitation-only conference held in Sedona, Arizona. The annual conference has also featured Vice President Joe Biden and a 2014 appearance by Clinton before she was officially a presidential candidate. CEOs from GE, Chevron, Wal-Mart, Freeport and FedEx -- all of whose companies or charitable arms have contributed more than $100,000 to support the institute -- have also spoken.

Some of the institute’s larger donors, including hedge fund manager Paul Singer and investor Ron Perelman, also contributed $100,000 to Arizona Grassroots Action PAC, a super-PAC that’s supporting McCain as he seeks his sixth term in the Senate. McCain co-authored the 2002 law aimed at limiting the influence of big money in politics, a provision of which was overturned in the Supreme Court’s 2010 Citizens United decision.

That decision ultimately opened the door to the kind of unlimited donations to super-PACs that McCain once tried to limit.

Tuesday, March 29, 2016

Corporations vs People

Cultural Crony Capitalism Ascendant - Georgia Governor Caves to Big Business, Vetoes Religious Freedom

from the Daily Signal
Georgia’s Republican Governor Nathan Deal has caved to pressure from big business and special interests and vetoed a very modest religious liberty bill. This shows the lack of courage of many in the political class, and also highlights the extreme nature of the Left and the business community. To these groups, even mild religious liberty protections are unacceptable.

The economic threats made by big businesses to get the government to do their bidding at the expense of the common good are examples of a vicious form of cultural cronyism.

The Georgia religious freedom bill that Deal vetoed would have safeguarded clergy from having to officiate same-sex weddings, prevented faith-based organizations from being forced to hire someone who publicly undermines their mission, and prohibited the state government from discriminating against churches and their affiliated ministries because they believe marriage is between a man and a woman.

The bill that the Deal vetoed was the result of a series of compromises that significantly watered down the original version. It did not offer protections to bakers, florists and similar wedding professionals, and it adopted a very narrow definition of faith-based organizations, covering only churches, religious schools, and “integrated auxiliaries”—the same unacceptable definition used by the Obama administration to exclude the Little Sisters of the Poor.

Yet liberals demagogued these very limited protections—and got the governor to veto it. As the Atlantic Journal Constitution reports:
Executives from dozens of big-name companies, including Disney, Apple, Time Warner, Intel and Salesforce, called on the governor to veto the bill. The NFL warned it could risk Atlanta’s bid for the Super Bowl and the NCAA hinted it could influence the state’s ability to host championship games.
That’s right, big business threatened boycotts and used their outsized economic pressure to force the governor to act against the common good. Do the NFL and the NCAA, Disney and Apple have a zero tolerance policy for religious freedom bills? Even a bill that didn’t protect the Little Sisters is too much for the Left to tolerate.

And the governor bought into this nonsense hook, line and sinker. In explaining his veto Deal argued that the religious liberty bill “doesn’t reflect the character of our state or the character of its people.” Leaving people free to act on their deepest religious convictions apparently isn’t one of those values.

Most remarkably, Deal concluded that states simply shouldn’t pass any religious freedom laws, for religious freedom “is best left to the broad protections of the First Amendment.”

This is nonsensical.

There is a reason why President Bill Clinton signed the Religious Freedom Restoration Act—and why it passed unanimously in the U.S. House of Representatives and with 97 votes in the U.S. Senate. There is a reason why over 20 states have adopted their own state religious freedom restoration acts, and why 11 more have constitutional religious liberty protections that provide a similar level of protection.

Religious Freedom Restoration Acts and other religious freedom protections are needed against our contemporary over-active progressive government. In addition to the First Amendment, both the federal government and the states must act to protect religious freedom—in broad measures like Religious Freedom Restoration Acts, and in more specific measures like the First Amendment Defense Act.

Americans need both broad protections and specific protections. So, in addition to the Religious Freedom Restoration Act, Congress has passed a variety of laws that protect pro-life conscience. In Roe v. Wade the Supreme Court invented a right to an abortion. But after Roe Congress made clear that government cannot require a pro-life doctor or nurse to perform an abortion—that they, too, had rights that required specific protections from hostile judges and bureaucrats.

Likewise, in the Obergefell decision, the Supreme Court redefined marriage throughout America by mandating that governmental entities treat same-sex relationships as marriages. The Supreme Court did not say that private schools, charities, businesses, or individuals must abandon their beliefs if they disagree.

We need laws protecting these rights.

Indeed, protecting minority rights after major social change is also a hallmark of American tolerance and pluralism. But Deal seems unwilling to do anything that might protect such people and their rights. And big business and special interests on the Left seem intent on doing everything to make sure people are coerced by the government into violating their beliefs.

This is yet another example of cultural cronyism. Businesses in Georgia were always free to embrace gay marriage—to bake wedding cakes for gay marriages and make floral arrangements for same-sex nuptials—and many do. But now activists want the government to force everyone in Georgia to do it. And they’ve attacked religious freedom for everyone in the process.

America is in a time of transition. Courts have redefined marriage, and beliefs about human sexuality are changing. During this time, it is critical to protect the right to disagree and the civil liberties of those who speak and act in accord with what Americans had always believed about marriage—that it is the union of husband and wife.

Good public policy is needed at the local, state, and federal levels to protect cherished American values. These policies would help achieve civil peace amid disagreement, maintain pluralism, and protect the rights of all Americans, regardless of what faith they may practice.

Monday, March 28, 2016

The Problem with Profits

from The Economist
AMERICA used to be the land of opportunity and optimism. Now opportunity is seen as the preserve of the elite: two-thirds of Americans believe the economy is rigged in favour of vested interests. And optimism has turned to anger. Voters’ fury fuels the insurgencies of Donald Trump and Bernie Sanders and weakens insiders like Hillary Clinton.

The campaigns have found plenty of things to blame, from free-trade deals to the recklessness of Wall Street. But one problem with American capitalism has been overlooked: a corrosive lack of competition. The naughty secret of American firms is that life at home is much easier: their returns on equity are 40% higher in the United States than they are abroad. Aggregate domestic profits are at near-record levels relative to GDP. America is meant to be a temple of free enterprise. It isn’t.

Borne by the USA

High profits might be a sign of brilliant innovations or wise long-term investments, were it not for the fact that they are also suspiciously persistent. A very profitable American firm has an 80% chance of being that way ten years later. In the 1990s the odds were only about 50%. Some companies are capable of sustained excellence, but most would expect to see their profits competed away. Today, incumbents find it easier to make hay for longer (see Briefing).

You might think that voters would be happy that their employers are thriving. But if they are not reinvested, or spent by shareholders, high profits can dampen demand. The excess cash generated domestically by American firms beyond their investment budgets is running at $800 billion a year, or 4% of GDP. The tax system encourages them to park foreign profits abroad. Abnormally high profits can worsen inequality if they are the result of persistently high prices or depressed wages. Were America’s firms to cut prices so that their profits were at historically normal levels, consumers’ bills might be 2% lower. If steep earnings are not luring in new entrants, that may mean that firms are abusing monopoly positions, or using lobbying to stifle competition. The game may indeed be rigged.

One response to the age of hyper-profitability would be simply to wait. Creative destruction takes time: previous episodes of peak profits—for example, in the late 1960s—ended abruptly. Silicon Valley’s evangelicals believe that a new era of big data, blockchains and robots is about to munch away the fat margins of corporate America. In the past six months the earnings of listed firms have dipped a little, as cheap oil has hit energy firms and a strong dollar has hurt multinationals.

Unfortunately the signs are that incumbent firms are becoming more entrenched, not less. Microsoft is making double the profits it did when antitrust regulators targeted the software firm in 2000. Our analysis of census data suggests that two-thirds of the economy’s 900-odd industries have become more concentrated since 1997. A tenth of the economy is at the mercy of a handful of firms—from dog food and batteries to airlines, telecoms and credit cards. A $10 trillion wave of mergers since 2008 has raised levels of concentration further. American firms involved in such deals have promised to cut costs by $150 billion or more, which would add a tenth to overall profits. Few plan to pass the gains on to consumers.

Getting bigger is not the only way to squish competitors. As the mesh of regulation has got denser since the 2007-08 financial crisis, the task of navigating bureaucratic waters has become more central to firms’ success. Lobbying spending has risen by a third in the past decade, to $3 billion. A mastery of patent rules has become essential in health care and technology, America’s two most profitable industries. And new regulations do not just fence big banks in: they keep rivals out.

Having limited working capital and fewer resources, small companies struggle with all the forms, lobbying and red tape. This is one reason why the rate of small-company creation in America has been running at its lowest levels since the 1970s. The ability of large firms to enter new markets and take on lazy incumbents has been muted by an orthodoxy among institutional investors that companies should focus on one activity and keep margins high. Warren Buffett, an investor, says he likes companies with “moats” that protect them from competition. America Inc has dug a giant defensive ditch around itself.

Most of the remedies dangled by politicians to solve America’s economic woes would make things worse. Higher taxes would deter investment. Jumps in minimum wages would discourage hiring. Protectionism would give yet more shelter to dominant firms. Better to unleash a wave of competition.

The first step is to take aim at cosseted incumbents. Modernising the antitrust apparatus would help. Mergers that lead to high market share and too much pricing power still need to be policed. But firms can extract rents in many ways. Copyright and patent laws should be loosened to prevent incumbents milking old discoveries. Big tech platforms such as Google and Facebook need to be watched closely: they might not be rent-extracting monopolies yet, but investors value them as if they will be one day. The role of giant fund managers with crossholdings in rival firms needs careful examination, too.

Set them free

The second step is to make life easier for startups and small firms. Concerns about the expansion of red tape and of the regulatory state must be recognised as a problem, not dismissed as the mad rambling of anti-government Tea Partiers. The burden placed on small firms by laws like Obamacare has been material. The rules shackling banks have led them to cut back on serving less profitable smaller customers. The pernicious spread of occupational licensing has stifled startups. Some 29% of professions, including hairstylists and most medical workers, require permits, up from 5% in the 1950s.

A blast of competition would mean more disruption for some: firms in the S&P 500 employ about one in ten Americans. But it would create new jobs, encourage more investment and help lower prices. Above all, it would bring about a fairer kind of capitalism. That would lift Americans’ spirits as well as their economy.

Thursday, March 24, 2016

PC Maryland Senate Votes to Change Latin

The Maryland state Senate voted 40-6 to make the official translation of the motto on the seal -- "fatti maschii parole femine," "strong deeds, gentle words" rather than "manly deeds, womanly words."

Evidently the Senators now believe that "Sticks and stones may break my bones, but words will EVER hurt me."

Tuesday, March 22, 2016

Ex Cathedra*

*Ex cathedra is a Latin phrase which means "from the chair." It refers to binding and infallible papal teachings which are promulgated by the pope when he officially teaches in his capacity of the universal shepherd of the Church a doctrine on a matter of faith or morals and addresses it to the entire world.

from American Thinker
I was talking with a friend, and he said that his son would probably go get a PhD because he wants to do “policy” in education.

I replied that, for me, “policy” is the problem in education. Government does not learn (Kevin D. Williamson) so adding more policy into the dead-end mess we call government education isn’t going to solve the problem.

In fact, I went on to say, the policy people are the well-born elitists doing the dirty work for the ruling class, figuring out, like Jonathan Gruber, how to dress up the monster of ObamaCare so it looks like affordable care, even it if walks, talks, and defecates like a dead-end government program to pay off the ruling class’s supporters. The policy people are part of the problem.

So it is telling that the people really upset about the Trump phenomenon are the policy people, those well-born men and women that went to the right schools and interned with the right power people and are now seen all over the media carrying the ruling class’s water.

The policy people intuit that the Trump candidacy, in some dark and animalistic way, represents the end of the line for people like them. Politics in the future, they fear, isn’t going to be nicely turned policy papers but something ruder and cruder.

I think they are wrong. But that doesn’t stop a chap like David Brooks from imagining the end times for policy-nerds.

Enough about the yelping and yipping at the policy puppy store. What is the meaning of Trump?

This week’s answer is in Mencius Moldbug’s idea of The Cathedral (recently sneered at by Kevin J. Williamson). Says Moldbug:
The great power center of 2008 is the Cathedral. The Cathedral has two parts: the accredited universities and the established press.
Under the Cathedral’s bishops and canons is the Apparat of the civil service and the NGOs, etc. Downstream from the Cathedral is politics, organized as the Inner Party of Democrats and the Outer Party of Republicans. When the Inner Party is in power it gets to rule; when the Outer Party is in power it only gets to govern. This means that Inner Party functionaries get one free grope, but Outer Party cuckservative policy types better not even think of it. This is because, like any established church, the Cathedral enforces its Articles of Faith, received directly from God, and it is heresy to depart from the orthodoxy of Holy SJW Writ, and the Cathedral leans more on people whose Faith is suspect rather than on those that just went to Policy Confession.

The frustration we conservatives have felt in the last few years as the GOP won the House in 2010 and the Senate in 2014 is that the Outer Party GOP establishment knew that it was better obey the Holy Writ and not challenge the Inner Party and the bishops at the Cathedral. Not yet, and maybe not ever.

But Donald Trump is running for president from the Outer Party and he has driven a stake through the Cathedral’s orthodoxy and lived to tell the tale. No wonder the lefty muscle-men are marchin’ and protestin’ and blocking highways and closing down Trump rallies. They can see the Antichrist and know what to do about it.

A vital job at any Cathedral is to cover the mailed fist of political power with the velvet glove of gentle Christian persuasion. That is why I like to say that liberals are always pretending that their ruthless political operatives are nothing but kindly librarians.

But government is force; politics is violence; system is domination. That is the truth about government and politics and government programs, as anyone on the receiving end of such wonders will tend to agree.

But ruling classes all end up forgetting these simple truths, and are genuinely shocked and offended when the slaves rebel. Of course they are, when the Cathedral echoes every day with tuneful anthems sung by the Cathedral choir attesting to the godliness of the ruling class, its ethics and its compassion.

And so, when the head of rebellion shows up, the ruling class is shocked and insulted, not just the bishops and the canons and the Cathedral choristers and the Inner Party thugs but the Outer Party policy puppies as well.

And really, we would all probably end up much better off being good little girls reciting our lessons and getting our government checks regular. But there is something in human beings that, every now and again, rebels against good-little-girldom, and strikes out west to the Territory. Maybe this is one such time.

But my guess is probably not, and so all the policy puppies can stop yipping and whining and peeing and shut up.

Mommy will be along with the Puppy Chow soon.

Thursday, March 17, 2016

Maryland Senate Votes to Censor and Thereby Shield Itself from Maryland's Rebellious Past

from the Baltimore Sun
The Maryland Senate voted Thursday to strip pro-Confederate lyrics from the state's song, "Maryland, My Maryland."

Senators voted 38-8 for a compromise bill that would keep the old verses written in 1861 as Maryland's "historic state song" but replace lyrics denouncing Abraham Lincoln and referring to "Northern scum" in the version to be used on official occasions.

Tuesday, March 15, 2016

Why Republicans and Democrats Fear "Open" Primary's

As of February when registration for this election closed, Ohio had 1,268,776 registered Republicans, 811,406 registered Democrats, and 5,460,124 people unaffiliated with either party.

Monday, March 14, 2016

Playing the "Fascist" Card...

Now that the "Racist" Charge has Lost its' Zing, Neo-Progressives Turn to the "Fascist" Card
from Real Clear Politics
RIAN STELTER, CNN: Let's get into that in more detail in a little bit. Carl, I want to come to you...You've been talking about Trump for months as a neo-fascist. I want you to tell us why and how you view this current moment.

CARL BERNSTEIN: It is a difficult term, and the word "neo" has a lot to do with it -- meaning a new kind of fascist in our culture, dealing with an authoritarian demagogic point of view. Nativist, racist, anti-immigrant bigotry that he appeals to. I think we need to look to the past --and I'm not talking about Hitlerism and genocide. I'm not drawing a direct paralel to Mussolini.

But it is a kind of American fascism we haven't seen before. This goes beyond George Wallace, who was merely a racist. This goes to authoritarianism and the desire for a strong man who doesn't trust the institutions and democracy and government.

My point is. We now need on cable news to have a debate, a historical debate on what fascism was and is and how Donald Trump fits in the picture. Because it is something very foreign to our political cutlture in terms of the 20th, 21st century. That's going on in print and online but it is not part of our debate on cable. No interviewer as far as I know has asked Donald Trump, what is fascism, Mr. Trump, how are you different from the fascist message?

Fascism's dictionary definiton is:

1. (sometimes initial capital letter) a governmental system led by a dictator having complete power, forcibly suppressing opposition and criticism, regimenting all industry, commerce, etc., and emphasizing an aggressive nationalism and often racism.

2. (sometimes initial capital letter) the philosophy, principles, or methods of fascism.

3. (initial capital letter) a political movement that employs the principles and methods of fascism, especially the one established by Mussolini in Italy 1922–43.


A form of political behavior marked by obsessive preoccupation with community decline, humiliation or victimhood and by compensatory cults of unity, energy and purity, in which a mass-based party of committed nationalist militants, working in uneasy but effective collaboration with traditional elites, abandons democratic liberties and pursues with redemptive violence and without ethical or legal restraints goals of internal cleansing and external expansion.

[Robert O. Paxton, "The Anatomy of Fascism," 2004]

Quotes about fascism from

“Every anarchist is a baffled dictator.” ― Benito Mussolini

“Fascism is capitalism plus murder.” ― Upton Sinclair

“If there is ever a fascist takeover in America, it will come not in the form of storm troopers kicking down doors but with lawyers and social workers saying. "I'm from the government and I'm here to help.” ― Jonah Goldberg, Liberal Fascism: The Secret History of the American Left from Mussolini to the Politics of Meaning

Fascism should more appropriately be called Corporatism because it is a merger of state and corporate power” ― Benito Mussolini

“The first truth is that the liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than their democratic state itself. That, in its essence, is fascism -- ownership of government by an individual, by a group, or by any other controlling private power.... Among us today a concentration of private power without equal in history is growing.” ― Franklin D. Roosevelt

“Fascism is the stage reached after communism has proved an illusion.” ― Friedrich Hayek

“If I had been an Italian I am sure that I should have been whole-heartedly with you from the start to finish in your triumphant struggle against the bestial appetites and passions of Leninism." (Speech in Rome on 20 January, 1927, praising Mussolini)” ― Winston S. Churchill

“When one thinks of all the people who support or have supported Fascism, one stands amazed at their diversity. What a crew! Think of a programme which at any rate for a while could bring Hitler, Petain, Montagu Norman, Pavelitch, William Randolph Hearst, Streicher, Buchman, Ezra Pound, Juan March, Cocteau, Thyssen, Father Coughlin, the Mufti of Jerusalem, Arnold Lunn, Antonescu, Spengler, Beverley Nichols, Lady Houston, and Marinetti all into the same boat! But the clue is really very simple. They are all people with something to lose, or people who long for a hierarchical society and dread the prospect of a world of free and equal human beings. Behind all the ballyhoo that is talked about ‘godless’ Russia and the ‘materialism’ of the working class lies the simple intention of those with money or privileges to cling to them. Ditto, though it contains a partial truth, with all the talk about the worthlessness of social reconstruction not accompanied by a ‘change of heart’. The pious ones, from the Pope to the yogis of California, are great on the’ change of heart’, much more reassuring from their point of view than a change in the economic system.” ― George Orwell, England Your England and Other Essays

“What difference does it make to the dead, the orphans and the homeless, whether the mad destruction is wrought under the name of totalitarianism or in the holy name of liberty or democracy?” ― Mahatma Gandhi

Saturday, March 12, 2016

Post-Modern Economic Advice for Citizens of the Advancing Market State

This is how it should be done. Lodge yourself on a stratum, experiment with the opportunities it offers find an advantageous place on it, find potential movements of deterritorialization, possible lines of flight, experience them, produce flow conjunctions here and there, try out continua of intensities segment by segment, have a small plot of new land at all times. It is through a meticulous relation with the strata that one succeeds in freeing lines of flight, causing conjugated flows to pass and escape and bringing forth continuous intensities for a BwO (Body w/o Organs).
- Deleuze and Guattari, "A Thousand Plateaus"

Friday, March 11, 2016

The Market State Revisited

from PJ Media
Archbishop of Canterbury Rowan Williams regarded the possibility that Britain was morphing into something fundamentally different with some dread. In his Dimbleby lecture Williams said: "what I want to explore ... is the suggestion ... that we're in ... a period where the basic assumptions about how states work are shifting ... that we are witnessing the end of the nation state, and that the nation state is being replaced in the economically developed world by what some call the 'market state'."
the nation state ... promises ... both a piece of territory and a fairly homogeneous community ... based on a firm directive hand in the economy and a safety net of public welfare provision ... and its success in managing this was the obvious foundation of its claim to be obeyed. ...

What happens, though, when the state no longer seems to have the power to keep its side of the bargain? ... the American strategist and historian Philip Bobbitt ... sees our present context ... has led to a shift into a new political mode, the market state, in which the function of government - and the thing that makes government worth obeying - is to clear a space for individuals or groups to do their own negotiating, to secure the best deal or the best value for money in pursuing what they want. It involves deregulation; the 'franchising' of various sorts of provision - from private prisons to private pensions - and the withdrawal of the state from many of those areas where it used to bring some kind of moral pressure to bear. It means that government is free to encourage enterprise but not to protect against risk; to try and increase the literal and metaphorical purchasing power of citizens.
Williams argued that while the promised market state might bring more consumer benefits it might also cause a loss of community, echoing Winston Churchill's conviction that "not only individual death, which is the universal experience" is to be feared, "but, incomparably more commanding, the life of Britain, her message, and her glory."

But the problem went beyond Williams' concerns. The road to the market state led not to the Emerald City but the wilderness of atavistic theocracies, nationalistic authoritarianisms and declining individual opportunities, much to the dismay of those who expected the path to be smoother. The last Belmont Club post argued the problem was caused by a principal-agent conflict in politicians whose loyalties were divided between transnational institutions and lobbies and the their traditional constituencies.

This post argues that a successful transition to the market-state requires a solution to the principal-agent problem else it will fail. In the nation-state the problem of divergence of interests is solved by culture, religion and racial homogeneity. But where those factors have been gravely weakened the conflict can only be solved by a strategy that forcibly aligns the interests of bureaucrats with the success of its populations.

There is arguably only one proto-market-state country in the world: the United States. Yet president Obama, perhaps from habit, persists in acting like the head of a nation-state writ large called the "international order". In an long interview in the Atlantic with Jeffrey Goldberg Obama expressed his disappointment with the international order in terms which illustrate how, in trying to be the president of everyone he has succeeded in making himself the president of none, perhaps failing to see that leading a market-state is different from just being an old style politician with international extensions.
In recent days, the president has taken to joking privately, “All I need in the Middle East is a few smart autocrats.” Obama has always had a fondness for pragmatic, emotionally contained technocrats, telling aides, “If only everyone could be like the Scandinavians, this would all be easy.” ...

Obama modulates his discussion of terrorism for several reasons: He is, by nature, Spockian. And he believes that a misplaced word, or a frightened look, or an ill-considered hyperbolic claim, could tip the country into panic. The sort of panic he worries about most is the type that would manifest itself in anti-Muslim xenophobia or in a challenge to American openness and to the constitutional order.
A recent Wall Street Journal noted that for the first time presidential candidates from both parties were no longer strongly supportive of free trade. "Many Democrats have long blamed free-trade deals for big job losses and depressed wages ... but one big surprise Tuesday was how loudly trade fears reverberated among Republican voters in the primary contests ... evidence, many observers say, of a widening undercurrent of skepticism on the right about who reaps the benefits from loosened trade restrictions."

They had lost the faith and simply singing "we are the world" no longer cuts it -- unless that phrase means what most don't think it does. The current crisis is rooted in the fact that neither physical or job security can be achieved by nation state policies, even with international components.

That is because contemporary productive and destructive processes are provided by overlay networks built on top of the physical infrastructure of the world. Examples of such overlay networks are the Internet, international trade, intermodal logistics, ISIS, the distributed development of nuclear weapons etc. You can think of these as "apps" -- both good and bad -- as built atop of physical infrastructure such as shipping, railways, highways, ports, communications cables, housing stock, etc. They are logically remapped by various actors to suit their own purposes and we live in this world.

The nation state used to tax, distribute transfer payments and provide physical protection on a stand-alone basis. But today much of the action, even of the malevolent kind has moved to these networked apps. Take the telephone: African nation-states which for decades failed to provide even a few land lines to their population found themselves overtaken by cellular networks which in a few short years put a phone in the hands of nearly every African.

Employment was similarly disrupted. The dollar value in salaries of call center workers in the Philippines will soon eclipse the aggregate remittances of workers physically laboring overseas -- even in a country where a tenth of the population works abroad -- proving one can emigrate without taking an airplane. Bloomberg argues that wages have fallen in the West through Chinese competition even if no workers have crossed a border.

Not only does activity travel along these overlays, so does consent. People grant Skype, Google, Paypal, Amazon or Uber consent to use their services. Soon driverless vehicles will have consent to convey people and their loved ones around. Rarely do users even read the terms and conditions, opting to trust providers in rational ignorance. Many people may actually trust overlay networks more than nations states, an issue highlighted in the FBI vs Apple. If consent were a form of currency more of it is probably in the hands of these globally operating apps, including alas ISIS, than reposed with Third World nation states, most of which are not fully free. It may be that most civilization (the metaphorical "Shield of Achilles") will eventually take in the form of compiled consent in apps that will collectively comprise our culture, knowledge and even law.

The relative importance of people and territory will likely change as well. In a knowledge economy sentience will constitute the ultimate source of economic value. While physical resources (oil, minerals, arable land, water) will continue to be important they will be largely useless without systems embodying stored knowledge. With people paramount, the objective of a market-state should change from one of controlling physical resources to defending the citizenry.

The relative importance of physical resources will decline even further if humanity succeeds in going off-world as gigantic quantities of material becomes available through robotic extraction, manufacture and distribution throughout the Solar System. Once off-world the metric of size will change from being measured in square miles to the census of productive people and controlling standards that acknowledge a State.

Almost as important as the human resource are initial standards which will guide the structured and unstructured (peer-to-peer) networks from which innovations will spring. Without a starting point it will be difficult to discover resources, share and transact securely. Critically such standards are unlikely to be created by bureaucratic fiat. The only way a "State" can create them is indirectly: by fostering conditions under which these arise in creative populations under their protection. This property has to potential to align the interests of bureaucrats with citizens.

With these in mind the strategic imperatives of a proto-nation-state are as follows:
1. To protect and preserve, preferably in coalition with other States, the physical infrastructure of the world.

2. To preserve, secure and provide a predictable legal environment for its population, which comprises value in a market-state age.

3. The goal of #2 above is to increase the likelihood that the citizens of that state will check in Version 1.0 of all the important global apps -- whether these be logistics to security applications -- in order to lay the foundation for the market-state age.

4. The question question of who checks in Version 1.0 the next global innovations will more than anything else determine the future trajectory of the 21st century.
Through this prism the events of the last decade may appear in a different light. The destruction of Syrian borders is less catastrophic than the the annihilation of its human capital. The former is an offense against the nation-state; the latter a crime against the market state. The depopulation policies of Europe now appear not only short-sighted, but suicidal. The disruption of terrorism and counter-terrorism on the world's physical infrastructure is no longer dismissable as 'foreign entanglement' but a core threat to the market-state. The nuclear proliferation which has brought us closer to "midnight" than at nearly any time during the Cold War may as we shall see, only tractable within the context of a market state. The sell out of American education to the unions, the Curleyist policy of open borders --- all legacies of nation-state politics -- now reveal themselves as the undermining the human resource.

To their everlasting credit the American voters sensed there was something wrong with early 21st century globalism long before the pundits detected the error. They understood, better than anyone that the future depended upon renewing principal-agent loyalty rather than betraying it.

Many of the mistakes of Western leaders can now be seen as the result of applying 20th century leadership style to a proto-market-state age. This miscalculation is particularly dangerous because disruptive technological developments are descending on the world faster than political leaders can mentally cope with them. Perhaps the most potent of these are artificial intelligence and the Internet of Things. These two apps, together may hold the key to nuclear proliferation and the solution to terrorism, yet may also prove to be the greatest threat to the existence of the human race.

Arthur C. Clarke once remarked that "any sufficiently advanced technology is indistinguishable from magic." How well the world transitions from the paradigms of the 20th century to those of the 21st will determine whether the future belongs to a society of magicians or a prison camp of slaves or barbarians in possession of magical objects. Perhaps the last role of the historical state will be assert human control over its own creations. One thing's for sure: it's wasted on simply providing jobs to timeservers in bureaucracies.
Why do all of these authors seems to be pro-Market State. We REALLY need to roll this "Market State" thing back to "Nation States"! And we REALLY need to get the message out about how and why the American people got screwed.

Thursday, March 10, 2016

All Aboard?

On Super Tuesday the Train will Depart the Station. Who will Get Left at the Station?

Monday, March 7, 2016

Can Donald Trump Re-Forge Obama's "Market State" and Make America Great Again?

from PJ Media
Immediately after legal scholar Philip Bobbitt tried to explain the history and future of the State in his book The Shield of Achilles, a brief intellectual storm swept the non-American Anglosphere as intellectuals pored over it as a guide to a world made murky by September 11, 2001. "The Shield of Achilles generated much interest in the diplomatic and political community. Public officials who follow Bobbitt's works include the former Prime Minister of the United Kingdom, Tony Blair; the Archbishop of Canterbury, Rowan Williams, who built his Dimbleby Lecture around Bobbitt's thesis; and the former Prime Minister of Australia, John Howard, who referred to Bobbit's book in a 2004 address to the Australian Strategic Policy Institute. Lecture."

September 11, 2001 was a memento mori moment for a civilization which had almost come to believe it was chosen to be the End of History. In that uncertain time much store was laid on Bobbitt's concept of the "Market State" which he predicted would succeed the Nation State. For an Anglosphere bewildered by a storm, the idea of a chart proved irresistibly attractive. Bobbit explained the future evolution of the State as follows:

"The simple difference between the two is that the nation state derives its power through its promise to improve its citizens' material wellbeing, while the market state is legitimised through its promise to maximise its citizens' opportunities." Or to put it another way, where the nation state – be it fascist, communist or democratic – is highly centralized, the market state is fragmented and is run by outsourcing its powers to transnational, privatized organisations.

While the Nation State was focused on defending territory and nationality the Market State would be concerned with preserving a portable bundle of opportunities and rights its 'citizens' could use anywhere in a transnational world. In Bobbitt's elegant prose, "the threat to the state lay primarily in the unrealized domain of its ideals ... the security of the state depended on the security of the larger system and if the latter were infused with the ideals of the triumphant liberal democracies, the security of the democracies and of the system as a whole was assured."

The State had to transcend itself to survive. Australian intelligence analyst Paul Monk correctly characterized the shift as enlarging and at the same time diminishing the role of the traditional state:

A nation state is a state defined by sovereignty within territorial borders, the defense of those borders by means of deterrence or retaliation for violation of them, and a public policy of large-scale social security for the population within those borders.

A market state, by comparison, is defined by constitutional, economic and strategic adaptation to a world in which the claims of human rights, the reach of weapons of mass destruction, the proliferation of transnational threats to security and well-being, and the emergence of global capital markets that ignore borders, curtailing the power of states to control their own economies; while the development of telecommunications networks that likewise ignore borders, serves to undermine national languages, customs, cultures and regimes.

The problem was that in the intervening years the Market State prediction went -- or has seemed to go -- terribly wrong. As recent events painfully illustrate, we're not getting warmer. The search is getting colder. In a recent article in the New Statesman Bobbitt admitted:

It wasn’t supposed to be like this. … It was generally expected that [the triumph of liberal democracy] would, in Henry Kissinger’s words, “automatically create a just, peaceful and inclusive world” …

How far we have come since those words were written. The international order that so confidently expanded the G8 to the G20, that continued the enlargement of the European Union to 28 member states, that brought about the first democratic elections in Iraq and Afghanistan despite harrowing terrorist intimidation, that increased the membership of Nato to include not only former members of the Warsaw Pact but even the Baltic states that had been part of the Soviet Union, and that created the Association of South-East Asian Nations and brought China into the World Trade Organisation is now shuddering and fragmenting. …

Now, Henry Kissinger has concluded, “The state itself is under threat.”

What happened to the progression to the Market State? Most alarmingly the greatest threats appeared to come from obsolete forms given unnatural vitality by modern technology. The international order is being challenged by "national, ethnocultural groups", even by entities categorized not by "nationality but by religion". It is as if we had gone backward in time. An Internet-powered ISIS, a WMD enhanced North Korea, an unpredictably hybridized Russia arose as Frankenstein forces that international system could neither explain nor contain.

This suggested something was seriously wrong with the paradigm. A resurgent nationalism rose from the graveyard of history where it had been interred by the globalized, multicultural world. Vladimir Putin reinvented himself as a Russian nationalist, not a born-again Communist in a world where socialism was in vogue only on Western campuses. Like Wrong Way Corrigan Europe was building a borderless Schengen regime all the way until the moment it was collapsed by a tide of refugees.

With the UK on the verge of leaving the European Union in order to return governance of Britain to Britons, it is the political elites who seem seriously out of touch. In America the surprising ascendancy of Trump so traumatized the political establishment that Anne Applebaum gloomily asked in the Washington Post: "is this the end of the West as we know it?"

Right now, we are two or three bad elections away from the end of NATO, the end of the European Union and maybe the end of the liberal world order as we know it. ...

In the United States, we are faced with the real possibility of Republican Party presidential nominee Donald Trump ... A year from now, France also holds a presidential election. One of the front-runners, Marine Le Pen of the National Front, has promised to leave both NATO and the E.U. , to nationalize French companies and to restrict foreign investors. ....

Britain may also be halfway out the door. In June, the British vote in a referendum to leave the E.U. Right now, the vote is too close to call — and if the “leave” vote prevails, then, as I’ve written, all bets are off. Copycat referendums may follow in other E.U. countries too. Viktor Orban, the Hungarian prime minister, sometimes speaks of leaving the West in favor of a strategic alliance with Istanbul or Moscow.

"It wasn’t supposed to be like this," Bobbitt wrote. But if so, why did the State fail to transition into the Market State? The key fallacy may lie in his belief that the market state would work to "maximize its citizens' opportunities." This belief rests on the unsupported assumption that such State would continue to act as the faithful agent of its citizens. Yet once a State has been relieved of what Paul Monk called the duty to maintain "sovereignty within territorial borders ... and a public policy of large-scale social security for the population within those borders" it acquires a rival claim to its services: the World.

"World leaders" no longer work only for their own countries, but for the World. Politicians like the Prime Minister of Greece suddenly find themselves working for "global capital markets that ignore borders", faceless bureaucrats in Brussels and accountable to a bewildering plethora of G's -- G8, G20, etc -- not to mention a United Nations and a United Europe.

In retrospect the idea that an increasingly internationalized political elite would automatically remain faithful agents of their own populations should have rang alarm bells. Although much has been made of the security violations of Hillary Clinton's private email system, its true value is as a record of how the Clinton's constituency grew beyond the borders of America. It is not for nothing that the Clinton Foundation is also known as the Clinton Global Initiative. It has received money from 20 foreign governments.

A world where Angela Merkel feels compelled to accept millions of migrants for Europe even to the detriment of Germany and where president Obama feels he can sign major international treaties with Iran without reference to Congress is an unstable world locked in a game that is no longer transparent. Who do politicians work for? It creates a world of dubious loyalties and unpredictable coalitions.

If the obvious conflict of interest has been ignored by the politicians, it has not been lost on the voters. Many plainly sense what economists call an principal-agent problem, which may be the source of the current voter revolt. Bobbitt comes near to the identifying one of the causes of Market State failure when he observes that president Obama saw the ISIS problem from the standpoint of the international system rather than as president of the United States.

In an interview in 2014, he described his vision of a new geopolitical balance of power in the region. “It would be profoundly in the interest of citizens throughout the region if . . . you could see an equilibrium developing between Sunni, or predominantly Sunni, Gulf states and Iran . . . If you can start unwinding some of [the distrust among the states of the region], that creates a new equilibrium. And so I think each individual piece of the puzzle is meant to paint a picture in which conflicts and competition still exist in the region but that it is contained.”

What Obama did by putting "the interest of citizens throughout the region" in the forefront was unconsciously subordinate the claims of principal, the American people. Bobbitt notes, "it was only after "the San Bernardino killings in December 2015, [that] Obama acknowledged in a televised address to the nation that the US was at war, a concession he must have made with some reluctance."

But Bobbitt has not taken his insight to its logical conclusion. Obama's reluctance to recognize a threat to his country represents an unnatural state of affairs. The efficient cause of the current crisis lay in breaking the former chain of political accountability without replacing it with another. If there is any truth to Anne Applebaum's belief that "we are two or three bad elections away from the end of NATO, the end of the European Union and maybe the end of the liberal world order as we know it," it must be that the fuse was lit before Trump; perhaps in 2008 or earlier.

The fate of the State depends as much on principal/agent considerations as much as on Bobbit's duality of strategy and law. What happens if those other considerations are added to his analysis? That framework will be used in a future post to predict some likelihood of what the future holds.

The Shield of Achilles: War, Peace and the Course of History, Author Philip Bobbitt sets out to reinterpret the history of the twentieth century as a long war in which conditions of outright military confrontation or of frantic "cold" competition lasted from the outbreak of the first world war until the collapse of the Soviet Union and that this long experience of war has brought about a fundamental change in the constitutional basis of states. He explores this idea through the notion of the "market state".
Where, oh where, has my Market State gone?

Saturday, March 5, 2016

Del. Szeliga: “Let’s Make Sure it’s Me Who Faces the D.C. Insider Candidate this November”

from the Dagger
From Kathy Szeliga for Maryland:

Friends and neighbors,

If you’re like me, you’re probably beyond frustrated with politics and fed up with the situation we’re facing in Washington.

But are you aware that the D.C. insiders think they have “their” Maryland Senate seat all locked up? They view OUR Maryland seat as one that they can hand-pick to continue what’s best for “their” agenda, with no regard to what’s best for Maryland.

And while they’re consumed with continuing down the path of building a bigger, less efficient, and over-burdening government in Washington… here in Maryland, we’re accomplishing great things!

The good news is, they don’t know what REAL Marylanders know: When presented with the right person for the job, Marylanders will stop at nothing to make sure that person gets elected!


As the Minority Whip in the Maryland House of Delegates, I’ve had the opportunity to work shoulder-to-shoulder with Governor Hogan bring REAL change to our state, ensuring that the lives of Marylanders are getting better in a very REAL way.

How REAL? We’ve repealed the rain tax, reduced tolls, rolled back taxes and are actually communicating with our constituents and keeping our promises. That’s right, it CAN be done!

And this week, Governor Hogan announced that he supports the House Bill that I introduced with Delegate Moon to ensure that Maryland citizens have full transparency into the day-to-day work of their elected officials.

Governor Hogan said, “Maryland citizens deserve accountability and transparency from their elected leaders, especially when modern technology should make access easy and inexpensive. This is a common-sense piece of legislation, and I applaud the bill’s bipartisan sponsors – Delegates Kathy Szeliga and David Moon – for their commitment to ensuring transparency in state government.”

I will put you and your family above all else, and I won’t let out-of-touch politicians wreak havoc on the lives of the middle-class and continue to punish hard working people and demolish their hopes of living the American Dream.


The good news is, we’ve looked at the numbers, and we know we can win. The last thing the D.C. insiders want is to have an opponent that has actually accomplished things for the people of Maryland. They are praying I don’t win the primary because they know that I’m an effective leader, and am some who is working hard to make our schools, economy, and state better.

Let’s make sure it’s me who faces the D.C. insider candidate this November because I can promise you that given the opportunity, I will fight tooth and nail for my fellow Marylanders, and I WILL WIN!


Kathy Szeliga

Thursday, March 3, 2016

Mitt Romney's Major Announcement Today... will it jibe with THIS?

Update 12:16 pm:

Not very well, indeed. Which Mitt Romney are we to believe?
The real Mitt Romney pitches for Solamere Capital

Wednesday, March 2, 2016

Andy Harris Isn't PC. Who Cares? I Don't!

from the Baltimore Sun
Maryland Rep. Andy Harris became the center of controversy on Tuesday when he voted with eight of his Republican colleagues against naming a post office after poet and civil rights activist Maya Angelou.

Because post office naming votes are usually routine matters in the House, the split vote picked up national attention for Harris, the only Republican representing Maryland in Congress. First elected in 2010, Harris is the son of immigrants who fled communist Eastern Europe immediately after World War II.

"She supported the Communist revolution in Cuba, and my parents escaped a communist country,"
Harris said of Angelou in an interview on Tuesday. "I'm not voting for someone who supported the communists."

The vote was 307 to 9 in supporting of renaming the post office, which is located in North Carolina. Angelou called Winston-Salem home for decades and is buried there.
The PC crowd over at the Baltimore Sun still expect people to get upset about this PC cr*p. Good luck with THAT!
Like Sir Roger Casement..."hanged on a comma"