Category Archives: Foreign Affairs

A World of Problems

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Back when the Germans were threatening to shut down Greece and sell it off for parts, it was fairly obvious that there was no way to “fix” the Greek problem. Even it were possible to radically overhaul their public sector, the debt payments are too high to maintain the level of social services expected from a modern social democracy. Default was unthinkable because close to 80 percent of Greece’s public debt is owned by public institutions, primarily the EU governments and the ECB.

The “solution” was to kick the can down the road until a miracle happened, but now the problem is back.

ATHENS—Greece’s economic recovery is proving elusive, challenging the forecasts of the country’s government and foreign creditors still counting on growth reviving this year.

The International Monetary Fund said last week  that the economy is stagnating, in the first admission from creditors that Greece’s recovery is off track again. Growth will only restart next year, the head of the IMF’s team in Greece said on a conference call with reporters, without offering details.

Of particular concern is that exports, which are supposed to lead Greece out of trouble, are on a slow downward trajectory, hampered by capital controls, taxes and a lack of credit.

“There is no chance we will see a rebound unless we see some bold political decisions that would introduce a more stable business environment,” said Dimitris Tsakonitis, general manager at mining company Grecian Magnesite.

The bailout agreement between Greece and its German-led creditors assumes rapid growth from late 2016 onward, including an official forecast of 2.7% growth in 2017. Private-sector economists believe next year’s growth could be closer to 0.6%.

Weaker growth would undermine the budget, likely leading to fresh arguments with lenders about extra austerity measures.

Greece is still grappling with the measures it has already agreed to. Late on Tuesday the country’s parliament approved pension overhauls and other policy changes that have been delayed for months, holding up bailout funding.

Greek government officials are sticking to their view that the economy is on the cusp of growth. “We are at the turning point at which we can we say with certainty that we are leaving the recession behind us,” Economy Minister George Stathakis told supporters of the ruling left-wing Syriza party Sunday.

The economy will get a push from investors as of the end of the year, when lenders are expected to provide some debt relief and the country qualifies for a European Central Bank bond buyback program, Prime Minister Alexis Tsipras said in an interview with The Wall Street Journal last week.

In other words, the miracle did not happen and the problem is now worse. This comes at a time when Europe’s biggest bank is in very serious trouble.

Hedge funds have started to pull some of their business from Deutsche Bank, setting up a potential showdown with German authorities over the future of the country’s largest lender.

As its shares fell sharply in New York trading, Deutsche recirculated a statement emphasising its strong financial position.

European regulators and government officials have kept a low profile in public over Deutsche’s deepening woes. However, in private they have struck a sanguine tone, stressing that in extremis there is scope under European regulation to inject state funds to support the bank, provided it is done in line with market conditions.

Marcel Fratzscher, head of DIW Berlin, a think-tank, said: “If push comes to shove, the German government would contribute because Deutsche Bank is the only global bank that Germany has.”

There is one solid rule with banking and that is when the biggest bank is in trouble, all the banks are in trouble. The reason is a bank in trouble seeks to increase its cash by unwinding its holdings. This puts downward pressure on the price of those assets, which forces all banks holding similar assets to revalue and perhaps raise their cash holdings, by selling assets. This can easily set off a cascading effect, which is popularly referred to as contagion. The ghost of Lehman now haunts Deutsche Bank.

Deutsche Bank has something north of €42 Trillion in derivative exposure. To put that into perspective, the GDP of Europe is €14 Trillion. The phrase “systemic risk” is starting to pop up in news stories for obvious reasons. Presumably the German government would step in and bail out the bank, but this is the same German government that invited millions of Muslims into the country. That and no one really knows how big the problem is at Deutsche Bank. There’s nothing more dangerous in the financial world than uncertainty.

If that’s not enough to have you stocking up on potable water and MRE’s, the news brings word that the Obama Administration is trying its best to start a war with Russia over Syria. They are ending talks with the Russians over the bombing of Aleppo. The Russians are threatening to impose a no-fly zone, while John Kerry is making noises about sending troops to Syria. The US position is completely nuts, which is what makes it so dangerous. The same people who screwed this up are now tasked with avoiding a mistake that will lead to a shooting war with the Russians.

The world always has some problem that could get out of control and bring the whole thing crashing down, but the odds are usually long enough to not worry too much. Pakistan is now threatening to nuke India, but that happens often enough to not take too seriously. Pakistan’s military understands that they will lose a real war with India. India understands that they will gain nothing by winning a war against Pakistan. This is one of those problems that can be managed by the permanent diplomatic service, with little help from the political class.

The three crisis I’m following all have some things in common. One is they will require hard choices from the political class to contain. In politics, a hard choice is one that causes a politician to lose support. Merkel’s government is already teetering so how willing is she going to be to make a bold move to rescue Deutsche Bank? The ECB proved unable to deal with the Greeks the last time. If Merkel is facing a financial crisis, who will she play bad cop with the Greeks when Tsipris inevitably comes calling, demanding a break on Greek debt?

The Syria debacle is the most concerning because it resembles so many European problems of the past. There’s a Seven Year’s War quality to it where you have two main players with the rest changing teams after every stage. With the US now increasing the troop levels in nearby Iraq, presumably to fight in one theater of this conflict, the chances of a mistake increase. In these situations, mistakes are often not mistakes, but even when they are, they become reasons to abandon dialogue in favor of military options.

We live in a world of trouble. One can be forgiven for having a sense of foreboding.

The New Cold War?

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One of the more curious parts of the American presidential campaign is the furious side battle over how to deal with the Russians. Many Republicans have adopted the neo-conservative line that Putin is some combination of Stalin, Hitler and that third grade bully who put gum in their hair. They are incapable of seeing Putin as anything but an inhuman evil. This says more about the Republican-aligned publications and think tanks, which have come to be dominated by the neo-cons, than anything else.

Trump has taken a less provocative stance than most Republicans so that has all the professional loonies out howling in the streets. Part of this is simply due to the anti-Trump virus that has infected Official Conservatism™, but it also reveals something about the political class. While neo-cons have always had greater influence over the Republicans, they currently dominate the foreign policy establishment. It was under Obama, after all, that Victoria Nuland helped throw the Ukraine into turmoil.

The puzzle is why the neo-cons have an obsession with the Russians. The Cold War has been over for a long time and the Russians are not much of a threat to anyone. They have a lot of nukes, but what reason would they have to nuke anyone? The Russian ruling class is living like Saudi Royals, mostly from selling natural resources to the Europeans. They control roughly 40% of the natural gas supply to Europe and that accounts for 68% of Russian exports. That means the Russians are in no hurry to stop selling gas to the rest of Europe.

Part of it is good old fashioned professional inertia. People like Frederick Kagan, Donald Kagan and Robert Kagan (husband of Victoria Nuland) have organized their lives around opposition to the Russians. They’re not alone. The whole neo-conservative project, as a political movement, was mostly about opposition to the Soviets. Most of the men who lead the neo-conservative cause these days are old men who started out in life as Cold War hawks. When the Soviets collapsed, they did not find a new career. They simply found new reasons to demonize the Russians.

There’s also an undeniable tribal flavor to it. Almost all neocons are Jews and specifically Russian Jews. There has always been a strong anti-Russian strain within American Jewry that dates back to to when Russian Jews started migrating to America. It’s not entirely irrational, given the way Jews were treated by the Czars. But, there has always been a divide within American Jewry. One one side are German Jews who emigrated in the 19th century and largely blended into the ruling class. On the other side are the Russian Jews who were treated like poorer relations.

While all of this is interesting background, it is no reason to restart the Cold War and there are some dissenters who think the neo-cons are nuts. Some on the Right point to the fact the neo-cons were outlandishly wrong about the Muslims and should not be trusted with Russia policy. Then there are critics from the Left who also think the neo-cons are nuts, but they mostly think we’re better off doing business with the Russians. Stephen Cohen is the most prominent voice on the Left warning that a new Cold War with Russia is a terrible idea.

There’s another element that explains the neo-con obsession with Putin. Irving Kristol’s brand of conservatism was intended to be forward looking and anti-traditionalist. It’s not an accident that the neo-cons are forever chirping about happy warriors and optimistic conservatism. They see traditionalism as pessimistic and limiting. Whatever else you want to say about Putin, he is very much in the tradition of European conservatism, which is traditionalist and limiting. The state is to defend citizens from one another, not guide them to the glorious future where they can reach their full potential.

Then there’s globalism, which has become something of a religion for western ruling elites. Irving Kristol’s brand of politics has easily folded into the globalist fantasies of American policy makers, because it gives the naked money grab the veneer of humanitarianism. The trillion dollar boondoggle that was the Iraq War was tarted up as an effort to install democracy and liberalism in the Muslim world. It’s a lot easier to loot your country’s middle-class when you are convinced it is to make the world a better place.

Even if the neo-cons continue to dominate the debate, it takes two to tango and there’s plenty of reasons to think the Russians are not all that interested in a new Cold War. Russian per capita GDP is $13,000. The poorest state in America is at $35,000, while the poorest state in the EU is Bulgaria at $18,000. Russia is not Albania, but it is a very poor country relative to the West. It’s also a country with horrible demographics and wide spread drug and alcohol problems. They also have a Muslim problem that gets little attention. In other words, the Russians are in no condition for a Cold War.

Thoughts On Turkey

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In my youth, military coups and revolutions were not common, but they were not unheard of either. Real countries like France or Canada did not have coups, but banana republics in South America had them with some frequency. Then you had the intrigues in the Soviet Bloc. A leader would suddenly stop showing up at public events and that meant he was sick or he had fallen out of favor. Africa would have revolutions with some frequency. We called them revolutions, even though nothing ever changed, but that’s Africa.

The general assumption was that a real country did not have military coups or revolutions because they had democracy of some sort. If the people were unhappy, they could vote in people they liked. If elements of the ruling elite were unhappy, they could appeal to the public for change. The military, instead of being an instrument of the ruling class, was subordinate to the civilian government and excluded from politics. That is not a bad place to start when defining a modern country. Real countries have elections, not revolts.

I think this is why the western news services were having so much trouble fitting the attempted coup in Turkey into their standard narrative. Turkey is supposed to be different from the rest of the Muslim world. Turkey is a real country with elections and globalism. Sure, the political leadership sounds a lot like the lunatics from the Arab world, but that is just an act. It is their version of boob bait for the bubbas. Instead of guns and abortion, their rednecks want to hear about Allah and the Jews. Turkey is a real country, not a banana republic.

Following along via Sky News, the BBC and CNN, I had to laugh at the confusion of the news people covering this thing. They did not know which side they were supposed to support. Initially, they were just baffled, as they do not know anything about the world that is not fed to them through their earpieces. They were reduced to stuttering through live images of people walking around the streets waving flags. Then Obama came out in defense of the Islamists and the rest of NATO followed suit. Instantly, the new media was anti-coup.

Another thing I thought was humorous about the news coverage was the repetition of the claim this coup was not a “21st century coup.” I first heard this said on Sky News and then all of the news services were saying it. Whether this was “monkey see-monkey do” or the official word from the party is hard to know. What I found amusing about it is Turkey is not a 21st century country, but it is in the middle of a 21st century civil war, of which this was a part. The fact that this is not obvious to the alleged experts, who rule over us, does not bode well for our future.

In this civil war, Erdogan is the Oliver Cromwell of Turkey and this attempted coup was something analogous to Penruddock’s Uprising. It is not a perfect analogy, but it helps explain what is happening in Turkey. The army is the defender of the secular legacy of Ataturk and the defender of the old order. Erdogan is the leader of the new order, the Islamists that believe they can have a modern technological society, under medieval Islamic moral codes.

Everyone seems to agree that this event makes Erdogan stronger, but Turkish politics are so opaque that outsiders can never really know what is going on in the country. This could have been an operation run by the secular military to get the Gülen cult removed from their own ranks. The Gülen Cult is thought to have a stronger presence in the police than the military so this could be something more complex. In other words, this may not have been a revolt against the AKP but a revolt within the AKP.

There is also the fact that ethnic Turks are a majority in Turkey for now. Kurds are the future, demographically. That is a big part of what has put the AKP in power. The Turks view secularism as the cause of the demographic decline. The organization of the Kurds into a single political party, denying AKP a majority in the last election is a glimpse of the future and the Turks know it. That is why the AKP sent in the army after the election to persecute the Kurds. It is a part of what is driving the Turkish involvement in Syria.

The civil war among the Turks is about what to do about the future, a future that will have more Kurds than Turks if something is not done to arrest the low TFR of young Turks. Turkey has the Western disease, but it is still an Eastern culture. In the West, civilizational death is celebrated in the form of open borders and multiculturalism. In the East, it is met with religious revivals and bloodbaths. David Goldman makes the argument that the Iranian revolution was driven by similar forces.

The Turks are faced with a choice. They can be fully Western and go quietly into that good night. Alternatively, they can be Eastern and fight against the dying of the light. The former means modern technology and prosperity, for a little while at least. The latter means men in robes ordering homosexuals thrown off buildings. That is what is happening inside Turkey today. It is a version of what is happening in the West, but only in a country that culturally is closer to Byzantium than Brussels.

Return Of Heptarchy

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We do not know a lot of the British Isles, prior to the Romans arriving. Archaeological and genetic evidence gives some broad outlines, but the details of daily life and the history of rulers and tribes is largely unknown to us. The best we can do is piece together some general ideas based on what has been dug from the earth and what the Romans recorded about what they found when they landed in Britain. There’s also genetics which can be used to trace the movement of peoples over time. This helps build a general picture, but it is filled with assumptions.

What we do know is that for most of her history, various tribes controlled areas of land and those tribes eventually formed kingdoms. The Picts, the Celts, the Welsh, the Angles and later, the Saxons, are familiar names to people fond of history. Similarly, Wessex, Mercia, Northumbria and East Anglia probably ring some bells for most people. These were some of the kingdoms of the Heptarchy, a period in British history that lasted from the end of Roman rule until most of the Anglo-Saxon kingdoms came under the overlordship of Egbert of Wessex in 829.

It is useful to keep this in mind when looking at the changes that are coming to the UK if they follow through on the Brexit vote. The Scots are talking about independence again. The Welsh have been talking about independence for a while and may get serious about it again. Then you have the always difficult problem of the Irish. Membership in the EU was a disaster for the Irish in many ways, but they instinctively wish to go the opposite of whatever way the English are going so it is hard to know what happens with them. Then you have the Unionist issue, which is complicated in the best of times.

Whether any of this will come to pass is unknown at this point, but there is no doubt that the UK is about to go through a period where it redefines itself to meet the world of the future. Those two great forces discussed in yesterday’s post are at work in the UK now. On the one hand, we have movements toward greater local control, even independence, and on the other hand we have a movement to fold the whole country into Europe as an administrative zone of Germany. For now, the smaller is better side is winning the argument, but how far it goes is up in the air.

The issue that lies beneath all of this is whether or not the United Kingdom as a concept is of much use in the modern world. A unified island made a lot of sense in an age when invasion was a reasonable concern. A divided squabbling people would not stand a chance against Norse raiders. The Continent has produced many threats that required a strong and unified Britain. Today, invasion is not a concern and the greatest threat from the Continent is a fresh batch of regulations that make flush toilets less efficient. It is entirely plausible that the costs of being united outweigh the benefits.

Scotland voting themselves out of the UK is an obvious first step, but that may not be a great move on their part. The Scots remind me of the French-Canadians. They like waving flags around more than they like self-sufficiency. Similarly, the Welsh voted Brexit and seem to like being in partnership with the English. Preservation of local customs and language do not require independence. The Scots and the Welsh would probably be happy with the symbolic parts of nationhood, but let the English run foreign policy, trade and the central bank, as long as they have a voice in Parliament.

The other side of this is the fact that the English may be tiring of the Scots. In the last two national elections a clear line exists between the Scots and the English. SNP is basically Labour with more Brave Heart references. The Scots vote for a populist left-wing party while the English are voting for what passes for a nationalist right-wing party now. UKIP in Scotland is a collection of fringe nuts, while in England it is a real party gently tugging the Tories back to where they belong on the Right. I bet more than a few English would like to vote the Scots out of the UK and be done with them.

Then we have the Irish. Currently, there is free movement between England, the Republic of Ireland and Northern Ireland. Britain leaving the EU means a return of border controls to the UK and that means borders come back between Ireland and England. There is also the fact that Norther Ireland voted heavily against leaving the EU and is making noises about gaining special EU status. That is only possible if they are an independent country. How likely is it that Northern Ireland will follow the same path as the Scots and begin badgering for independence? How long before the English tire of them?

All of this is idle speculation, but the ground is shifting in the UK.

What To Do About Islam

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Terrorism from the Middle East got going in a serious way in the 1960’s and was allegedly spawned by the creation of Israel. Having failed to destroy Israel militarily, the Arabs set off on a policy of targeting civilians outside the Levant. The main actors at the time were Palestinians, but the rest of the Arabs, including Arab governments, eventually got into the act. Now, of course, we have these amorphous criminal organizations that exploit the global telecommunications system to recruit and direct lunatics all over the globe.

At the same time, Western involvement, and particularly US involvement, in the Muslim world has steadily increased. In the 70’s a handful of Americans worked in these countries, mostly in the oil business, but also as defense contractors. Today tens of thousands of Americans, plus equal numbers of Europeans are in these countries. That is on top of the saturation of Western culture via the internet and television. Then there is the military aspect. America has been dropping bombs on Muslims since the 80’s.

No sane person can conclude that relations between the West and Islam are on the upswing. Thirty years ago, the typical Westerner had no reason to care about the Muslims. Today, it is all we think about, because every other week a Muslim goes bonkers and kills a bunch a people. To make matters worse, the flood of Muslims into Western countries is threatening the social fabric of the West. Think about it. We now have political candidates running on explicitly anti-Islamic platforms.

What is to be done?

The first thing to do is to ban all immigration from predominantly Muslim countries. Banning Muslim immigration is impossible as you cannot implement it, but you can halt immigration from countries like Afghanistan and Iran. The United States actually runs recruiting drives in these countries via something called a diversity lottery. There is no patriotic reason to be importing these people. The West is not short of low-skilled, low-IQ people so importing more of them makes no economic sense. Importing people violently hostile to the West is suicidal and it must end.

That still leaves the problem of illegal migrants. The West used to have no qualms about rounding up illegals and sending them back, but fear of being rude to strangers has paralyzed Western governments. There is no reason to think this will change, but governments can make migration less attractive. Cutting off welfare benefits is the most obvious point of attack. Every Western country is creaking under the weight of social welfare programs. End all welfare programs to non-citizens.

Obviously, there are millions of Muslims living in the West and many have been here for a couple of generations. The Orlando shooter was born in America and his father was a naturalized citizen. America has about five million legal Muslims, while Europe has over forty-four million. Germany is 25% the size of the US and has far more Muslims. Given current fertility rates, these are dangerously high populations of people with an extremely poor history of assimilation. The West needs to think hard about encouraging reverse migration.

One way to do that is to offer cash bribes to leave. Some European countries are already doing this. It is a form of Danegeld, but sometimes that is what must be done. Many of the recent arrivals will jump at the cash bonus, figuring out that the party is over and they are better off going home. That is a big part of all of this. The West needs to make it clear that Islam is not welcome in the West. Cutting off the welfare and paying them to leave sends that message and it discourages others from making the trip to the West.

Another tool that can be used to discourage Muslim migration is a hard ban on cousin marriage. Most Muslim countries continue to marry off daughters to family members. First and second cousin marriage should be banned and heavily fined. No marriage of this type should be recognized. We have DNA tests to check this so it is cheap and easy to enforce. This is one of those things that sends a clear message, “You’re not welcome” to the Muslims.

All of this is incandescently obvious to anyone who has been paying attention. What is remarkable about the age in which we live is that the things people have known and understood for thousands of years are now suddenly heretical. This is due to the fever that has gripped our rulers, but normal people fully understand the sensibleness of limiting Muslim migration into the West. We owe Muslims nothing and are under no obligation to destroy ourselves to accommodate them.

What is not obvious is that our good intentions have done a lot of harm to the Muslim world and as a consequence invited these manufactured problems to our door. The culture and habits of the West evolved in the West. The people of Europe evolved in Europe and in the culture they created. Exporting our culture around the world to people, wholly unprepared for it, has had the same impact as exporting smallpox to the Americas. What has made the Mohammedan go crazy is the endless assault on his culture by Western culture.

The West not only needs to stop bombing the Muslims, but we also have to stop flooding their world with our culture. Western governments, especially the US, have to halt the export of Western culture to the Muslim world. Guys like Sergey Brin will fight it as he wants to control the world via Google, but maybe it is time for Sergey to take two in the hat anyway, but that is a post for another day. For now, the point is to halt the export of Western culture into Islamic countries via TV and Internet.

This also includes technology. What we fail to appreciate is how toxic Western technology is to these countries. They are not built for it. Our technology is like an infectious disease that seems harmless at first, maybe even beneficial, but then curdles into something that destroys the social fabric of these cultures. It is why we have observed initial periods of great progress, followed by a shift to tyranny and then total chaos. It is the pattern all over the Muslim world and the main driver is technology.

What happens is technology results in a material improvement in the lives of the people. They get better food, better medicine, better entertainments and better stuff. But then, this material improvement starts to disrupt the social arrangements and the ruling class uses the better technology to clamp down on dissent in very modern ways. As we see with the Turks, the result is authoritarianism. All over the Muslim world, the only stability comes either from despotism or backwardness.

Secular authoritarianism, however, sets off a counter-reaction where cultural elements begin to take on the secular authorities, the Islamic movements in the Middle East are not just religious in nature. They are counter arguments to Westernization. They are the response to tidal waves of foreign culture that are sweeping over Muslim lands. The West thinks it is helping by demanding democracy and shoving our values onto these people. Instead, we are creating fanatics who are dedicating themselves to fighting against what they see as an invasion.

Since this is going too long, let us summarize it this way. The solution to the West’s Islam problem is a version of containment. The goal is to keep the Muslims bottled up in their lands. Limit their access to the West physically, but l also limit their access culturally. Cut them off from our TV and the Internet. Let them drift back to their traditional ways, even if that means living in tents and riding camels. The Muslim Middle East needs to be a reservation for the Muslim. The only role of the West is to make sure they do not wander off the reservation.

Brexit

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On Thursday, which I think the EU requires the Brits to call quartidi, the subjects of England vote on whether or not to remain in Europe. The vote to leave, in theory, will compel the British government to negotiate an exit from the EU and paddle the island further into the Atlantic. The timing of the exit and the terms of the deal are not contemplated in the text of the referendum. There may be something in British law that determines these things, but I can find nothing to support that claim.

That is not an unimportant bit in this discussion. It is no secret that the ruling class of England not only wants to remain in the EU, but they dream of a day when Britain is just another administrative zone of Europe, sort of like how the Romans treated Britannia. It is not just that the idea of separate countries has become a heresy. The ruling elite seems to think the time has come to exterminate the British people entirely, at least as an identifiable tribe. As former Lord Chancellor Jack Straw put it, “the English as a race is not worth saving.”

Looking at the polling, the way to bet is that Brexit falls short. There has been a surge in support for leaving and English nationalism bubbling under the surface often goes unnoticed in polls. On the other hand, vote fixing and browbeating do not always show up in the polls either. There is also the fact that people perceive the status quo as the safe choice. Humans are funny that way. Any change meets some natural resistance, even when there is no logic to resistance. Roll it all up and Remain most likely carries the day.

Let us assume, by some miracle, that Brexit wins, what then?

In theory, the British government will begin negotiations with the EU on the formal withdraw of Britain from the EU. In reality, there has to be some political theater first. David Cameron will come under pressure to resign by members of his own party. He staked his reputation on this referendum so a failure to deliver would damage his standing. Plus, the people that really run things may want a scalp to send a message. As the saying goes, kill the chicken to scare the monkeys.

Of course, ousting a Prime Minister is no small thing and it could lead to all sorts of turmoil in the ruling party. Usually when this happens there is a group within the party that has coalesced around a new leader, they are ready to install, once they have  deposed the old leader. But that is not always the case and all hell could break loose once the Cameron is gone. Britain could end up having early elections, which would put things on hold until after the election. In effect, Britain would have a do-over referendum on Brexit.

If we assume that the political fallout is limited to the theatrical, the next step is the process of implementing the intent of the referendum. That will most likely take years as neither side will be in much of a hurry to get on with it. Parliament will surely pass some legislation as a stop gap to keep the current arrangements in place until a deal is done. The EU will set off on a long drawn out process of forming a committee to study the process of forming a committee to appoint a board to review Britain’s exit request.

The hope for all concerned is that the English people, having blown off some steam in the referendum, will go back to their affairs and forget all about it. From time to time the public will be notified that negotiations have taken place in the south of France during the winter or in the Alps during August, but otherwise nothing much will happen. There will no doubt be tales told to the British press about the long hours required to address the millions of details involved in actually leaving the EU.

Polling outfits will be surreptitiously dispatched to keep measuring public sentiment regarding the EU and the referendum. The hope being that opinion will swing the other way and Parliament can then pass an act overturning the referendum. The pressure to reverse the results of the referendum will slowly build over time until either the opposition is worn down or some crisis allows the rulers to act. A recession will be blamed on Brexit and it will be quickly “fixed” by overriding the referendum.

This probably seems like cynicism. After all, Britain is a liberal democracy where the will of the people, as expressed at the ballot box, is respected by the politicians. Our rulers invest a lot of time telling us this and then spend even more time getting us to come out and vote. Then there is the bizarre obsession with getting foreigners to vote in their own lands and come to our lands so they can vote in our elections. You can be forgiven for thinking that voting is important and respected by our rulers.

That has not been the pattern in Europe, or anywhere else in the West, over the last few decades. The voters vote and the political class does whatever it likes, coincidentally in line with the will of their donors and sponsors. The French people voted against the EU Constitution and the rulers promptly ignored them. Other EU countries then cancelled their referenda. The Greeks kept voting for change, only to get more of the same after each election. Despite the rhetoric, voting counts for little.

The reason for this is that what we keep calling liberal democracy is actually corporate democracy. The political class serves the function of the management group in a corporation. The buccaneering billionaires of the global elite are the board of directors, who hire and fire the politicians, based on their performance. The voters are just the minor shareholders who are mustered every once in a while, to endorse the actions of the board as represented by management. The vote is never binding.

Whenever there is shareholder revolt, the board takes it out on management. In theory, the shareholders could overthrow the board as well as management, but this always requires leadership from a large shareholder who is, in most cases, on the board. It may feel like the shareholders are taking control, but in reality, the board is always in control. It is just that the individuals members of the board may make war on one another.

In the case of Britain remaining a sovereign state, the board is of one mind, regardless of what the minor shareholders do tomorrow.

Globalized Intelligence

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The news brings word that the British public is now telling pollsters they are tilting heavily toward voting to leave the European Union. If the Brexit referendum passes, the British government will be required to paddle the island further into the North Sea in order to get beyond the reach of Brussels. Just how far they will have to go will be left to the government if and when it is necessary.

This is setting off panic on the Continent. The Brits pay roughly €13 billion per year into the Europe Union. They get out about €6 billion, give or take. This sounds terrible, but this does not account for the intangible benefits, assuming they exist, of having a say in the management of the European Union. That’s been the argument against Brexit. The indirect benefits of Remain dwarf the costs.

Like all economic arguments, the Remain argument is built on a foundation of statistical falsehoods and manipulation. They assume the worst case scenario of Brexit and the best case of Remain. In reality, most of the trade in place now will remain in place. The Germans need open access to British markets and they don’t have any desire to start a financial war with the English speaking world. They are in no position to pick that fight.

For all the talk of hidden benefits, there’s little talk of the hidden costs. Globalism is built on the concept of privatizing profits and socializing costs. Importing migrant labor, for example, allows the employer to spread the real cost of labor laws, insurance and competitive wages. At the same time, he can shovel those costs onto the public via welfare programs, crime, charity, etc. There’s nothing more expense than cheap goods made with illegal labor.

In the case of Brexit, there’s an enormous hidden security cost to the British that comes with European membership. This story about a Russian mole in NATO is a good example. During the Cold War, intelligence gathering and handling was managed by the Brits and Americans. The so-called Five Eyes did all of the electronic snooping and managed that information. The Brits have always been one of the best at spy craft and the Americans have always been great at signal intelligence.

Since the Cold War, NATO intelligence has become European intelligence. That means the active participation of all EU members. Countries like Portugal, with their poor record of keeping secrets, gets the same intel as Germany, with their excellent record of keeping secrets. The golden rule of all security systems is that they are as strong as their weakest link. In the case of Europe, their intelligence services will always be as reliable as Athens and Lisbon.

When you have separate countries, this problem is easily addressed. First, no country passes on intel to a third country without first getting permission from the source country. Countries that violate that rule are cut out of the loop. You can’t enforce that rule in a world without countries. The Portuguese and Turks get the same information as the Brits and Germans. Since that can’t possibly work, the result is going to be endless scheming, hidden agendas and deception.

The other “hidden” benefit of separate countries is the British intel services know perfectly well whose interests they are serving. The goal of their efforts is manifest to everyone in MI6. All of these motivations are transparent. Policing these relationships becomes much easier. If James Bond is living beyond his means and cavorting with a Russian mistress, you know something is amiss.

That, of course, leads to another problem. The British not only understand their interests, they can act on them unilaterally, if they think it necessary. If the US passes on intel that a mosque in London is housing mischief of Exploding Mohameds plotting to blow up a school, the Brits can act on that as they see fit. The people in charge of Britain know that their first duty is to protect their people.

All of this leads to the fundamental problem of the borderless world. It makes for a dangerous world. Government is not a precision instrument. It is a hammer. The bigger the government, the bigger and less precise the hammer. Public safety and national security are precision games. National government does them poorly which is why so much is delegated to local government. That’s not possible in a global world.

The Middle East Will Get Much Worse

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Smart policy types like to use the acronym MENA to describe what we in the West generally think of as the Arab world. North African populations in Libya and Algeria would reject the idea that they are in the same bucket as Arabs. Persians in Iran would have a similar complaint, even though they really do not have a basis for it. That is all true to one degree or another, but it is a useful bit of shorthand for discussing the collection of “countries” that are Muslim and mostly Arab.

If you look at the list of countries in the group, nine of the nineteen have been something close to stable over the last twenty years. Five of those are Gulf countries. Countries like Kuwait and Qatar are basically company towns run by a sheikh selling one product – oil. Then there is Israel, which is an exception. Oman and Jordan are also special cases, protected on the sly by Israel and operating as buffer states. Morocco is a special case, since it is mostly just a tourist trap for Europeans.

The stability that does exist in this region is based in Saudi Arabia. At least it has been. The Kingdom has avoided the revolts that were laughably called the Arab Spring by stupid Americans. They keep the GCC out of trouble and limit the mischief Iran is able to spread around the region. They also quietly work with Israel to limit the violence from the Palestinians.

Of course, they work with the US to maintain a strong military presence. There are a lot of US “advisers” in the Kingdom. Companies like Raytheon have been building and maintaining projects for the Saudis for decades. A lot of this booked as civilian use, but it is all military and all about controlling the region. Those listen posts the US runs in the Kingdom serve more than one purpose. That information is shared with Saudi intelligence. That is what has helped the Saudis control the explosion of chaotic violence coming from Yemen.

That last part, however, is where the worry starts. Yemen is a country full of inbred hyper-violent morons, who can barely organize a war-band. Yet, they have fought the Saudi military to a draw. This is a Saudi military equipped and trained by the US. They have the best equipment and the best training available, in addition to logistical and tactical support from the Americans. US military contractors have been with the Saudi military for decades, so there is not a problem with coordination. Yet, the Saudis cannot beat groups of retarded guys armed with old AK’s.

This war in Yemen has been an enormous drain on Saudi finances at a time when oil prices are depressed. The great leaps forward in drilling technology have most likely put a hard cap on oil prices, because wells can be brought back on-line quickly. Even if the Saudis can organize OPEC to hike prices again, they may not be able to enforce it. There is also the fact that the Saudis managed to alienate everyone with their policy of dumping oil to attack the US oil sector. The result is the Kingdom is hemorrhaging cash and will be forced to make deep structural changes.

That brings up another problem. The Saudi domestic setup is unsustainable. There are about thirty million people in the Kingdom, but ten million are foreign workers and many of those are basically slaves. The mean IQ of Saudi Arabia is tough to nail down, but the consensus puts it in the high 80’s at the optimistic end. Some old data suggest the mean is somewhere just north of 80, which is what you see in sub-Saharan Africa and American prisons. Add in the fact that most young Saudis do not work and you have a dearth of human capital. The general rule is you need a mean IQ of 95 to have a modern economy.

This is important because the Saudis recognize that they are running out of cheap oil to sell at huge profits. They are not going to run out of oil in our lifetime, but the cost of getting their crude out of the ground is going up and technology is allowing producers in the US to compete further up the price curve. That’s why they have this ambitious plan to restructure their economy to move away from simply being a giant oil company. They plan to open up the economy, diversify the tax base and shift work from foreign workers to Saudi workers.

Plans are great, but they rarely survive contact with reality. A country full of low-IQ nitwits, as the result of a culture of cousin marriage, is not going to turn into Silicon Valley overnight. Throw in the repressive Saudi religious culture and any attempt to open up the economy is going to run into trouble. Westerners working in the Kingdom live in compounds because the Wahhabi religious authorities demand it. Osama bin Laden was set off on his war with the West because Americans were stationed in the Kingdom during the Gulf War. Imagine what happens when Westerners are given easy access to the country.

That returns us to the central problem and why things will get much worse in the Middle East over the next decade. About 70% of the native Saudi population is under thirty. They do not work and they grew up in Wahhabi schools. The Saudis tended to export the fanatics to places like Afghanistan so they could go on jihad and never return. The more useful ones get pulled into the Saudi security services.

Imagine this process reversing and outside groups like ISIS recruiting these fanatics to make jihad on the House of Saud. Suddenly, ISIS or something similar is operating in Riyadh. There are plenty of signs this is happening now, but information is suppressed by the Kingdom for good reason. Still, smart people think this is a more of a now problem than a future problem.

Current estimates put the point at which the Saudis run low on cash between five and ten years from now. These are all guesses, of course. The only people, who intimately understand Saudi finances, work in the US Federal Reserve. The Saudis have already started a process of belt tightening in order to arrest the cash bleed, but these sorts of structural problems have to be addressed slowly, even in an autocracy.

Maybe the new King can get the country part way to its goal of diversification and that will be enough to stave off collapse. Nothing is ever certain in the Middle East except that there will always be turmoil. All the signs, however, are pointing in the wrong direction at the moment. That means the way to bet right now is on collapse of Saudi Arabia within the next decade. That, of course, will plunge the whole region into chaos.

The other reason to bet this scenario is the West is now led by people with a childlike understanding of the world. The European leadership class, growing up in the hothouse of US protection, resemble infants. There is no Bismarck or Metternich coming out of Germany in our lifetime. In the US, the political class has always been all thumbs in foreign affairs, but now they have succumbed to the madness of multiculturalism, rendering them dangerously incompetent.

This will not end well.

The Sick Man of Europe

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One of the great challenges the next US president will face is how to manage the decline of Turkey. The Turks under Recep Erdoğan are an unreliable partner and becoming a source of instability in Europe. The great neo-conservative dream of having NATO extend to every country on earth except Russia will not come to pass. Instead, it will either go away entirely or become something else, something that does not include Turkey.

The news that the Germans will prosecute a comic for making sport of Erdoğan, has all focused on Merkel, but that’s not the real story. This is all about Erdoğan and internal Turkish politics at a time when he is not very popular and the Turks face some very serious threats to their south and east. Pushing around Merkel is mostly about Erdoğan looking tough and important. In his part of the world, that is still how the game is played.

The immediate issues are the geopolitical problems the Turks face. Syria has collapsed, sending refugees into Turkey. This further destabilizes the Kurdish regions, which is exactly what the Turks do not want. Kurdish nationalism is probably the thing they fear more than anything. With neighboring Iraq a host for ISIS, their southern border is essentially a state of nature populated by homicidal lunatics with military gear they got from America.

They used to have influence in Syria and Iraq, but that’s no longer the case. Instead, Iran is fast becoming the regional hegemon. The Turks know their history and they understand that the Persians have always been the dominant player in Mesopotamia. The Iranians are not going to be happy just controlling the Gulf. They are not involved in Syria and Iraq as a hobby. The Mullahs of Iran imagine themselves as the heirs of Cyrus the Great, without the philo-semitism.

All of this is why Erdoğan is working the Europeans so hard. First he turns on the migrant spigot and then he makes Merkel grovel to have it shut off. This latest stunt is entirely for domestic consumption. This makes Erdoğan look tough to his people, which makes it easier for him to deal with the problems to his south. The game here is to extract as much from the Europeans as possible so he can be as aggressive as he needs to be with the problems to the south.

The problem for the Turks is they can’t make all of this work. The deal they made with Merkel included a provision for Turkish citizens to travel in Europe without a visa. Every young Turk with anything on the ball will find work in Europe. At the same time, those Syrian migrants are going to keep coming and those Kurds are going to keep breeding and dreaming of the day they have their own country. Turkey has the European disease and the Muslim disease. That’s going to be lethal.

That bit about the Kurds is something the West does not fully grasp. The demographics of Turkey present a very serious long-term threat to the stability of the country and the dominance of the Turks. Turkish TFR is at 1.5, while Kurdish TFR is 4.5. The math says Kurds will outnumber Turks in 20 years. Erdoğan does not talk about this all the time because he is bored. The Turks, unlike the Europeans, understand that the future belongs to those who show up.

It’s hard to know, but the noises coming from Erdoğan suggest he thinks he can solve his European disease by embracing his Muslim problem. The ruling party gets its support from the more rural parts of the country, which is the very Muslim part of the country. Turkey becoming more Islamic means becoming more hostile to the West. History shows these things have a way of spiraling out of control quickly.

Then there is the elephant in the room.  NATO is a legacy organization without a reason to exist. The Soviets are no more and there is no threat of the Red Army roaring into Germany. Whether the treaty is scrapped or redrafted, the next president is most likely going to preside over a radical redrawing of America’s military commitments to Europe. There’s a pretty good shot that part of it will include dropping Turkey from the deal.

The irony here is that we have the expression “Sick Man of Europe” because of the Russians. Tsar Nicholas I said of the Ottoman Empire “We have a sick man on our hands, a man gravely ill, it will be a great misfortune if one of these days he slips through our hands, especially before the necessary arrangements are made.” If the West has not thought about this with modern Turkey, they will be thinking about soon enough.

The challenge for the next president will be in letting things play out on their own. Here’s where the lesson of Libya comes in to play. Like Quaddafi, Erdoğan may simply be a guy you do business with because he keeps a lid on the Arabs to the south. That may require bribery and a lot of looking the other way as he suppresses the Kurds, but it’s the cost of keeping millions of migrants flowing into the Balkans. What Turkey will never be is part of Europe.

Bush and Bandar

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This story in America’s Newspaper of Record on the post-9/11 scramble to protect the Saudis is going to lead a lot of people to take the red pill, as the cool kids say. Most people assumed the administration covered up some fringe involvement by some Saudis in 9/11. Most people think our government has looked the other way on Saudi financing of terrorism. The claims here go well beyond that.

In its report on the still-censored “28 pages” implicating the Saudi government in 9/11, “60 Minutes” last weekend said the Saudi role in the attacks has been “soft-pedaled” to protect America’s delicate alliance with the oil-rich kingdom.

That’s quite an understatement.

Actually, the kingdom’s involvement was deliberately covered up at the highest levels of our government. And the coverup goes beyond locking up 28 pages of the Saudi report in a vault in the US Capitol basement. Investigations were throttled. Co-conspirators were let off the hook.

Case agents I’ve interviewed at the Joint Terrorism Task Forces in Washington and San Diego, the forward operating base for some of the Saudi hijackers, as well as detectives at the Fairfax County (Va.) Police Department who also investigated several 9/11 leads, say virtually every road led back to the Saudi Embassy in Washington, as well as the Saudi Consulate in Los Angeles.

Yet time and time again, they were called off from pursuing leads. A common excuse was “diplomatic immunity.”

Those sources say the pages missing from the 9/11 congressional inquiry report — which comprise the entire final chapter dealing with “foreign support for the September 11 hijackers” — details “incontrovertible evidence” gathered from both CIA and FBI case files of official Saudi assistance for at least two of the Saudi hijackers who settled in San Diego.

Some information has leaked from the redacted section, including a flurry of pre-9/11 phone calls between one of the hijackers’ Saudi handlers in San Diego and the Saudi Embassy, and the transfer of some $130,000 from then-Saudi Ambassador Prince Bandar’s family checking account to yet another of the hijackers’ Saudi handlers in San Diego.

An investigator who worked with the JTTF in Washington complained that instead of investigating Bandar, the US government protected him — literally. He said the State Department assigned a security detail to help guard Bandar not only at the embassy, but also at his McLean, Va., mansion.

I recall the administration flying the Bin Laden family out of the country right after the attack. That made some sense simply as a practical matter. What is coming to light now is that the administration decided to give the Saudis a pass before they knew anything about the attack. Put another way, their default position was to protect the Saudis above all else.

Former FBI agent John Guandolo, who worked 9/11 and related al Qaeda cases out of the bureau’s Washington field office, says Bandar should have been a key suspect in the 9/11 probe.

“The Saudi ambassador funded two of the 9/11 hijackers through a third party,” Guandolo said. “He should be treated as a terrorist suspect, as should other members of the Saudi elite class who the US government knows are currently funding the global jihad.”

But Bandar held sway over the FBI.

After he met on Sept. 13, 2001, with President Bush in the White House, where the two old family friends shared cigars on the Truman Balcony, the FBI evacuated dozens of Saudi officials from multiple cities, including at least one Osama bin Laden family member on the terror watch list. Instead of interrogating the Saudis, FBI agents acted as security escorts for them, even though it was known at the time that 15 of the 19 hijackers were Saudi citizens.

I’m not much for conspiracies, but you can see why people think the Saudis were behind 9/11 and that maybe the Bush people were OK with it. After all, it gave them the excuse to invade the world. At the minimum, there’s a distinct lack of anger on display here. Bush is an American and this was an attack on his people, his country. A thirst for vengeance is what one should expect. Instead, he’s smoking cigars with Bandar.

This is post-nationalism. When the rulers no longer feel any connection to the people over whom they rule, they are free to treat the people as furniture. The cost of 9/11, the death and destruction, was a small price to pay for booking the multi-trillion dollar boondoggle to come after it. A whole lot of people got rich off Afghanistan and Iraq. There’s a reason seven of the richest counties on earth are around Washington DC.