Monthly Archives: April 2014

How is it possible that so many people failed to understand the reality?

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Benjamin Netanyahu speaking on Holocaust Remembrance Day:

I have said many times in this place that we must identify an existential threat in time and take action in time. Tonight, on the eve of Holocaust Remembrance Day, I ask myself: why, in the years preceding the Holocaust, did the overwhelming majority of world leaders and Jewish leaders fail to detect the danger in time? In retrospect, all the warning signs were there: the strengthening of the Nazi regime year after year; the horrific anti-Semitic propaganda which grew stronger with each passing month; and the murderous attacks on Jews which began as a trickle and transformed into a huge wave.

In retrospect, there is a direct line connecting the racial laws and the gas chambers.

Very few world leaders understood the enormity of the threat to humanity posed by Nazism. Churchill was one of them. Few among our leaders, primarily Jabotinsky, warned against the imminent destruction facing our nation, but they were widely criticized and their warnings were disregarded, and they were treated as merchants of doom and war mongers.

So I ask: How is it possible that so many people failed to understand the reality? The bitter and tragic truth is this: it is not that they did not see it. They did not want to see it. And why did they choose not to see the truth? Because they did not want to face the consequences of that truth.

During the 1930′s, when the Nazis were gaining momentum, the influence of the trauma of the First World War was still fresh. Twenty years earlier, the people of the West experienced a terrible trench war, a war which claimed the lives of 16 million people. Therefore, the leaders of the West operated on the basis of one axiom: avoid another confrontation at any cost, and thus they laid the foundation for the most terrible war in human history. This axiom of avoiding conflict at any cost, this axiom was adopted not only by the leaders. The people themselves, primarily the educated ones, shared it too.

In 1933, for example, the year Hitler rose to power, there was a meeting of the Oxford University student organization – an institute from which generations of British leaders had emerged. Following a heated debate, the students voted for a resolution stating that they “would under no circumstances fight for their King and Country”. This resolution passed by an overwhelming majority only ten days after Hitler entered the Chancellery of Germany.

And believe me: that message reverberated in Berlin.

This example illustrates the West’s feeble attitude vis-à-vis the rise of Nazism.

Month after month, year after year, more and more information was received in London, Paris and Washington regarding the capabilities and intentions of the Nazi regime. The picture was becoming clear to everybody. However, “they have eyes, but cannot see; they have ears, but cannot hear.”

When you refuse to accept reality as it is, you can deny it. And this is precisely what the leaders of the West did. They dismissed the murderous Nazi rhetoric as internal German politics; they downplayed the seriousness of the danger of the military build-up of the Nazis, claiming that it was the result of the natural will of a proud nation, that it should be taken into consideration, that it should be accepted.

The reality was clear, but it was cloaked in a bubble of illusions. This bubble was burst by the stealth attack by the Nazis on Europe. And the price of the illusion and desire was very heavy because by the time the leaders of the West finally acted, their people paid a terrible price. World War II claimed the lives not of 16 million people, the unimaginable number of victims during World War I, but of 60 million, including one third of our people, who were butchered by the Nazi beast.

Citizens of Israel, my brothers and sisters,

Has the world learned from the mistakes of the past? Today, we are again facing clear facts and a tangible threat.

Iran is calling for our destruction. It is developing nuclear weapons. This is the reason it is building underground bunkers for the enrichment of uranium. This is the reason it is establishing a plutonium-producing heavy water facility. This is the reason it continues to develop inter-continental ballistic missiles that can carry nuclear warheads to threaten the entire world.

Today, just like then, there are those who dismiss Iran’s extreme rhetoric as one that serves domestic purposes. Today, just like then, there are those who view Iran’s nuclear ambitions as the result of the natural will of a proud nation – a will that should be accepted.

And just like then, those who make such claims are deluding themselves. They are making an historic mistake.

We are currently in the midst of fateful talks between Iran and the world powers. This time too, the truth is evident to all: Iran is seeking an agreement that will lift the sanctions and leave it as a nuclear threshold state, in other words, the capability to manufacture nuclear weapons within several months at most.

Iran wants a deal that will eliminate the sanctions and leave their nuclear capabilities intact. Such a deal, which will enable Iran to be a nuclear threshold state, will bring the entire world to the threshold of an abyss.

I hope that the lessons of the past will be learned and that the desire to avoid confrontation at any cost will not lead to a deal that will exact a much heavier price in the future.

I call on the leaders of the world powers to insist on a full dismantling of Iran’s capability to manufacture nuclear weapons, and to persist until this goal is achieved.

In any event, the people of Israel are strong. When faced with an existential threat, the situation of our people today is entirely different than it was during the Holocaust.

Today, we have a sovereign Jewish state. As Prime Minister of Israel, I do not hesitate to speak the truth to the world, even when faced with so many blind eyes and deaf ears. It is not only my right, it is my duty. It is a duty I am mindful of at all times, but particularly on this day, in this place.

On the eve of the Holocaust, there were Jews who avoided crying out to the world’s nations out of fear that the fight against the Nazis would become a Jewish problem. Others believed that if they kept silent, the danger would pass. The kept silent and the disaster struck. Today, we are not afraid to speak the truth to world leaders, as is written in our Bible: “I will speak of your testimonies before kings, and I will not be ashamed…listen, for I will speak noble thoughts; the opening of my lips will reveal right things.”

Unlike our situation during the Holocaust, when we were like leaves on the wind, defenseless, now we have great power to defend ourselves, and it is ready for any mission. This power rests on the courage and ingenuity of the soldiers of the IDF and our security forces. It is this power that enabled us, against all odds, to build the State of Israel.

Look at the remarkable achievements we have made in our 66 years of independence. All of us together – scientists, writers, teachers, doctors, entrepreneurs, employees, artists, farmers – the entire people of Israel, each one in their own field – together we have built a glorious state. The spirit of the people of Israel is supreme, our accomplishments tremendous. Seven decades after the destruction of the Holocaust, the State of Israel is a global wonder.

On this day, on behalf of the Jewish people, I say to all those who sought to destroy us, to all those who still seek to destroy us: you have failed and you will fail.

The State of Israel is stronger than ever. It is a state that seeks peace with all its neighbors – a state with a will of iron to ensure the future of its people.

“The people will arise like a lion cub and raise itself like a lion; it will not lie down until it consumes prey, and drinks the blood of the slain.” (Numbers 23:24; Jeremiah 23:6).

[From Powerline]

Four Prime Ministers in Four Years?

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They bring down a budget with a tax increase they said they’d never have and their re-election chances go from 90% to 10%.

Their expertise is politics but mine is economics. Economically it would be idiocy, the worst imaginable mistake. The politics we shall see for ourselves but bad economics cannot be good politics.

If Bill becomes PM in 2017, we will have had four Prime Ministers in four years.

The tax increases will be in aid of paying for the NBN, the NDIS, Labor’s stimulus debts and other gross mistakes. You are doing what no ALP Prime Minister would ever do. They just leave this to you so that they can return in three years with the by-then-fresh promise of honest government. We will not lie to you, unlike the Libs, we tell the truth where it counts. As he resigns from Parliament, the Prime Minister may have that warm inner glow that he did the right thing, or at least the right thing as he saw it. For the rest of us, all we will see is that he could have been there for a decade and barely made it to three. And the media will make another Coalition unelectable for as far as the eye can see.

America in the eyes of its domestic enemies

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This is the text that comes with the trailer:

Having made the second-highest-grossing political documentary of all time, the team behind 2016: Obama’s America is now, as promised, following up with America. Sending up some fireworks of his own to rival the ones 2016 generated, producer-writer and kind-of host Dinesh D’Souza says of his new docu, “We answer the central moral challenge of America’s critics, which is that America’s greatness is based on theft, plunder and oppression.” Listen for other red-button phrases from interviewees describing the USA as “the new evil empire” and a “predatory colonial power” as well as referring to Mount Rushmore as “a symbol of oppression and genocide to our people.” Director John Sullivan’s film comes out two years after its predecessors — hitting theaters on the Fourth of July.

It is these enemies who are now running America. There are some who believe that America can be restored to what it once was. But then I think of D’Souza’s up coming trial and I say to myself, it’s all over for America, all over.

Post-Crash Economics

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The secret is getting out. And what secret might that be? That modern economic theory is next to useless, or at least useless if your interest is either to understand what’s going on or to manage the economy in a productive way with high employment and low inflation. This is from the introduction to The Report which has been issued by the Post-Crash Economics Society in the UK, organised round a group of students at Manchester University:

Economics education is monopolised by a single school of thought commonly referred to as neoclassical economics. Crucially, very few economists working within this mainstream predicted the Financial Crisis. Afterwards many concluded that the best predictions came from those economists that had been marginalised by the mainstream. Despite this alternative perspectives are still close to non-existent in undergraduate programmes. We demonstrate this through a detailed analysis of Manchester’s syllabus, which itself is representative of economics syllabuses around the UK. This lack of competing thought stifles innovation, damages creativity and suppresses the constructive criticisms that are so vital for economic understanding and advancement. There is also a distinct lack of real-world application of economic ideas, with the focus being on abstract modelling that often seems devoid from reality. Finally, the study of ethics, politics and history are almost completely absent from the syllabus. We propose that economics cannot be properly understood with all these aspects excluded.

I have just the book for them, the second edition to be co-published in July by the Institute of Economic Affairs in London. In fact I have two books since The Report makes a point of stressing how important studying the history of economic thought is to understanding economics.

There is a write up of all this in an article, Bank of Englands’s Haldane Backs Broader Economics, found in the Wall Street Journal. Economics must change and I am extraordinarily pleased to see the revolution is finally about to begin.

UPDATE: Some further comment of my own based on the thread at Catallaxy:

For me there are a few issues of comfort in spite of some sense of pessimism.
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First, I am just happy to see the logjam of modern neoclassical economics finally broken. This is the first step in a much needed process even to have a declaration of disquiet about the way economics is taught. I cannot think it could get any worse than it is. They may not call themselves socialists but economic theory as currently taught is for all practical purposes a form of centralised economic management, with the level of G the most important driver.
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Second, that the coming Chief Economist of the Bank of England and Steve Davies of the Institute of Economic Affairs are willing to buy in on this gives me some sense that this is not some Marxist thought based around expropriating the expropriators. But whatever the basis of the theory, the issue is to force the mainstream to defend their theory and its practical value.
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Third, and very oddly, Post-Keynesian economic theory, so far as the business cycle is concerned, is almost identical to the classical theory of the cycle. Very odd to me to find this but I have even begun to write a paper on this very issue. I’m not sure they even are aware of the difference it makes, but in much that is written, they substitute effective demand for aggregate demand which means they are actually restoring Say’s Law since Say’s Law was the core of the explanation behind what made demand effective. It is no longer just a total but in this way becomes a theory of economic activity.
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Fourth, bringing back the history of economics and economic history can only be positive. The attempts to shut these out are attempts to shut down various forms of debate.
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Fifth, we shall see.

The media as teenage groupies

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obama cartoon naked foreign policy

The American media is just now beginning to point out what a useless incompetent Barack Obama is. A disaster at every turn and in relation to every policy, yet the media really have no one to blame for the breakdown in the system other than themselves. Here’s why:

By giving the president the benefit of the doubt at every turn, by making excuses to explain away fiascos, by ignoring corruption, by buying the White House line that his critics were motivated by pure politics or racism, the Times and other organizations played the role of bartender to a man on a bender.

Even worse, they joined the party, forgetting the lessons of history as well as their own responsibilities to put a check on power. A purpose of a free press is to hold government accountable, but there is no fallback when the watchdog voluntarily chooses to be a lapdog.

With hardly an ounce of character and sense, they bought the whole idiocy of Obama, from the “smartest man in the room” to “we are the change we have been waiting for”. The media has always been a sell out to the left and always will be, but this time they sold their soul and their birthright to a buffoon who holds them in the same low contempt he holds everyone else. Only now is the media just getting an inkling of why the rest of us think they are fools, utterly unworthy of the responsibility they had been entrusted with.

Pre-budget nerves – my list of dos and don’ts

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I am getting a bit nervous about the budget that’s brewing, no longer behind the scenes but with a few strategic leaks breaking into the news. As you may know, I am no Keynesian but I went back and took a look at my own Free Market Economics text since I could not remember whether I even mention the word “deficit”. The index has it listed once, three pages from the end on page 332.

Here are my thoughts on things. Why they left a Labor-supporting Keynesian to manage Treasury in the single most important budget they will ever introduce is beyond me. Anyway, here are my thoughts.

It’s not the deficit per se that matter but the level of public spending.

If you want to fix the economy, resources must migrate from being under the direction of the public sector and into the hands of the private sector. Therefore, the focus should be on cuts to non-value-adding forms of public spending. If it doesn’t show a positive return within a reasonable period of time, cut it off. This, by the way, is not an anti-welfare message although welfare too must be affordable. I am talking about infrastructure and the many forms of waste and mis-regulation that are found at every turn.

The economy will grow, employment will grow, real wages will grow if and only if economic activity is directed by private sector entrepreneurs. It will shrivel under the direction of government. Do not even imagine anything much beyond the first 10 percent of what you are already spending will create economic growth. Cutting public spending will create growth, not maintaining existing levels.

Raising taxes to fund public spending is a deadly mistake and wrong twice over:

. Higher taxes will allow you to maintain the level of public sector direction of our scarce economic resources.

. Higher taxes will reduce activity in the private sector.

The core aim must be to encourage entrepreneurial activity. There is no budget problem that cannot be fixed by:

. Reducing the level of unproductive public spending

. Fostering private sector growth (where unproductive spending has its own very brutal cure).

If the strategy is to balance the budget in ways that will diminish private sector investment and entrepreneurial activity, it will make things worse, not better. Economic conditions have been improving since the change of government with nothing much at all having been done. Leaving things alone is better than introducing new programs or raising taxes to fund existing forms of waste. Step back, get out of the way, cut your own take up of resources. But for heaven’s sake, don’t apply some bizarre Keynesian budget-surplus strategy by funding the existing level of public spending at the expense of the private sector.

Same old same old

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According to today’s Oz, the Leader of the Opposition has joined the rest of us in seeing that the R-G-R government was a hopeless mess.

BILL Shorten has attacked the governments of Kevin Rudd and Julia Gillard, highlighting their flaws, mistakes and misjudgments, arguing that he has learned the lessons of Labor’s election defeat and declaring the party must accept them too.

That’s a start, but where to from there? Will it be balanced budgets, no more wasted money, no longer jumping onto every PC bandwagon such as global warming. Will it be pulling unions off the back of business, reducing regulation, telling the truth before elections and then doing what you said you’d do? Well actually, nothing as specific as that. This is the list of six vapid principles, as content free as it is possible to imagine.

The first is to “treat people with courtesy and respect”.

The second is not to “launch a thousand ships, a thousand ideas (and) a thousand thought bubbles”.

The third is to focus on policy implementation.

The fourth lesson is to build a good relationship with business..

Fifth is to be a “no surprises” government.

The final lesson was to communicate with voters more effectively. “You have got to explain what you’re solving. Don’t go straight to the solution.”

And then there’s a seventh:

“Having a formal relationship with unions” which he said “is a strength, not a weakness.”

In other words, nothing new. Just hoping that the present government irritates just enough voters in doing what needs to be done to get Labor back over the line at the next election. A Shorten-Palmer Government should be quite an experience.