Spy who came in from the cold

John LeCarre comparing today's undercover operations with those when he wrote his famous spy novel:
"Today, the same man, with better teeth and hair and a much smarter suit, can be heard explaining away the catastrophic  illegal war in Iraq , or justifying medieval torture techniques as the preferred means of interrogation in the twenty-first century, or defending the inalienable right of closet psychopaths to bear semiautomatic weapons, and the use of unmanned drones as-a risk-free method of assassinating one's perceived enemies and anybody who has the bad luck to be standing near them. Or, as a loyal servant of his corporation, assuring us that smoking is harmless to the health of the Third World, and great banks are there to serve the public."
      We have not learned a thing!  LeCarre asks, "How far can we go in the rightful defense of our Western values without abandoning them along the way?

Recession in Europe.

The European Central Bank is  hopelessly confused and not doing its job.  Germany lost WW II, but is now wreaking havoc  on the rest of Europe worse than a Panzer division.  Here is their lame excuse as reported by the New York Times.

     "But despite his pledge at that time to do ‘'whatever it takes'’ to save the euro, Mr. Draghi does not appear willing to risk an outcry in Germany by throwing out the rule book altogether. And he must contend with the European Central Bank’s 23-member Governing Council, which includes the heads of all 17 national central banks in the euro zone.

“There are 17 governors of 17 member states with completely opposing views,” said Zsolt Darvas, a research fellow at Bruegel, a research organization in Brussels. “There are major disagreements. Probably they try to err less by being more cautious rather than being more aggressive.”

In addition, Mr. Darvas said, the European Union lacks a central treasury that would stand ready to provide financial backup if central bank investments went wrong, as the United States Treasury implicitly backs the Fed."

    This is myth and superstition at its worst.  A central bank can't go broke as it can always create more money if the previous creations don't work.. Try, try again until you get it right. If these bankers had a family out of work and unable to buy the necessities of life, it would not cling to this outmoded policy.

Gun Control

Are we so wanting for meaningful expression of manhood that thousands of men demand the right to own assault weapons?  Must all peaceable men, women, and children be beholden to the whims of such men?  Stop this world, I want to get off.

Boston Massacre

Why? Because we are the world's hated bullies. Pres. Bush proudly proclaimed his triumph in Iraq, describing it as "shock and awe".  Others can play that game.

Home mortgages

Private lenders are still unwilling to make home loans that they want to hold as investments as in the old days.  So Fannie May and Freddie Mac are necessary to guarantee or buy the mortgages.  This is what got us into trouble.  This process means that the original mortgage grantor is less careful in evaluating the capacity of the borrower to repay the loan.  Fannie and Freddie originally were public corporations but with the prevailing ideology they were privatized (you know downsizing too big government).  They sought risky investments to please their stockholders.  All of this went s south and the government bailed them out (all the time their management reaped handsome salaries in spite of their mistakes).  The taxpayer bill could be $200 billion by the end of 2015.
     Ideology makes poor public policy.

Agriculture and Revolution

“Bread provides one-third of the caloric intake in Egypt, a country where 38 percent of income is spent on food,” notes Sternberg. “The doubling of global wheat prices — from $157/metric ton in June 2010 to $326/metric ton in February 2011 — thus significantly impacted the country’s food supply and availability.” Global food prices peaked at an all-time high in March 2011, shortly after President Hosni Mubarak was toppled in Egypt.

Everything is linked: Chinese drought and Russian bushfires produced wheat shortages leading to higher bread prices fueling protests in Tahrir Square. Sternberg calls it the globalization of “hazard.” 

Source: Friedman, NYT

Working on the wrong end

LONDON — The Bank of England decided to keep its benchmark interest rate unchanged on Thursday amid doubts about the strength of Britain’s economic recovery.

The central bank left its interest rate at 0.5 percent, a record low, and also held its program of economic stimulus at £375 billion, or about $560 billion.  

Central bankers the world over are working on the wrong end. Business won't borrow even at historically low interest rates when consumer demand is weak.  Money needs to be put in the hands of consumers, not banks.