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Showdown in Ukraine: Putin’s Quest for Ports, Oil, Pipelines and Gas

March 27, 2014 6:37 am / Leave a comment

Showdown in Ukraine: Putin’s Quest for Ports, Oil, Pipelines and Gas.

By Claude Salhani | Tue, 25 March 2014 22:44 | 6

Yes, Russia is guilty of meddling in Ukraine, but then again so are the United States and the European Union. The major difference is that far less was said and much less reported by the international media over the Americans’ and Europeans’ interference than of Russia’s actions and the reactions it caused.

Where Russia is involved many in the West believe that one only needs to scratch the surface to see traces of the old Soviet Union begin to resurface. After all, Russian President Vladimir Putin is a former KGB officer. The truth is much more complicated than that: or perhaps somewhat simpler.

The Cold War that divided the East and West maybe over but the old rivalry still lingers. The rivalry between the West and Russia is no longer one over diverging political philosophies, but purely over resources – and the capitalistic gains they produce from mainly oil, gas and pipelines.

The West and in particular the United States seems to be suffering from collective memory disorder and have forgotten all the mud they slapped onto Putin’s face during the past 15 or so years. Or at least they expected him to forget and forgive.

Related Article: Ukraine – Full Circle to the EU Integration Issue

But then again Russian troops did move in to grab control of Crimea, taking over the territory from the Ukrainians. You can counter that argument by pointing to the US and NATO, who not only interfered, but swallowed former Soviet domains bringing them into the North Atlantic alliance, pushing NATO closer to Russia’s borders.

Yes, Russia needs access to warm water ports for its Black Sea fleet and many analysts also believe that this is a major issue of concern for Moscow, which it is. But the plot, as they say, thickens.

There is also another reason for Putin’s intervention in Ukraine and that has to do with Russia elbowing for dominance of the very lucrative and strategically important “energy corridors.”
That is very likely to be the major reason why Putin is willing to risk going to war with the West over Crimea, the pipelines that traverses the Caucasus and the oil and natural gas these pipelines carry westwards to Europe.

Given the geography of the region there are only so many lanes where the pipelines can be laid; and most of them transit through Ukraine. Others travel across Azerbaijan and Turkey. Most of Western Europe’s gas and much of Eastern Europe’s gas travels through Ukraine.

If Russia has vested interest in “recolonizing” Ukraine, the United States on the other hand has its own interests in Ukraine and other former Soviet areas.

What is going on today is nothing short of a race for control of what’s going to dominate the energy markets over the next two or three decades: the energy corridors from Central Asia, the Caucuses and through Russia and Ukraine.

As stated in a report published by the Woodrow Wilson International Center for Scholars, “the proclamation of independence, the adoption of state symbols and a national anthem, the establishment of armed forces and even the presence on Ukrainian territory of nuclear missiles—all important elements of independent statehood—amount little if another power, Russia, controls access to fuel without which Ukraine cannot survive economically.

Related Article: This Week in Energy: How Would LNG Get to Ukraine?

That same report denotes that “Ukraine’s strategic location between the main energy producers (Russia and the Caspian Sea area) and consumers in the Eurasian region, its large transit network, and its available underground gas storage capacities,” make the country “a potentially crucial player in European energy transit” – a position that will “grow as Western European demands for Russian and Caspian gas and oil continue to increase.”

Ukraine’s dependence on Russian energy imports has had “negative implications for US strategy in the region.”

As long as Russia controls the flow of oil and gas it has the upper hand. Russia’s Gazprom currently controls almost a fifth of the world’s gas reserves.

More than half of Ukraine’s and nearly 30% of Europe’s gas comes from Russia.  Moscow wants to try and keep things going its way; Washington and Brussels find it in their interests to try and alter that by creating multiple channels for central Asian and Caspian oil to flow westwards.
Ukraine today finds itself in the center of the new East-West dispute.

Ironically, the very assets that make Ukraine an important player in the new geopolitical game being played out between Washington and Moscow is also its greatest disadvantage.

By Claude Salhani of Oilprice.com

Obama's Former Foreign Policy Adviser Said – In 1997 – that the U.S. Had to Gain Control of Ukraine Washington's Blog

March 16, 2014 6:54 pm / Leave a comment

Obama’s Former Foreign Policy Adviser Said – In 1997 – that the U.S. Had to Gain Control of Ukraine Washington’s Blog.

The Battle for Ukraine Was Planned in 1997 … Or Earlier

Neoconservatives planned regime change throughout the Middle East and North Africa 20 years ago. Robert Parry correctly points out that the Neocons have successfully “weathered the storm” of disdain after their Iraq war fiasco.

But the truth is that Obama has long done his best to try to implement those Neocon plans.

Similarly, ever since the Soviet Union collapsed in 1991, the U.S. has pursued a strategy of encircling Russia, just as it has with other perceived enemies like China and Iran.

In 1997, Obama’s former foreign affairs adviser, and president Jimmy Carter’s national security adviser – Zbigniew Brzezinski – wrote a book called The Grand Chessboard arguing arguing that the U.S. had to take control of Ukraine (as well as Azerbaijan, South Korea, Turkey and Iran) because they were “critically important geopolitical pivots”.

Regarding Ukraine, Brzezinski said (hat tip Chris Ernesto):

Ukraine, a new and important space on the Eurasian chessboard, is a geopolitical pivot because its very existence as an independent country helps to transform Russia. Without Ukraine, Russia ceases to be a Eurasian empire.

***

However, if Moscow regains control over Ukraine, with its 52 million people and major resources as well as access to the Black Sea, Russia automatically again regains the wherewithal to become a powerful imperial state, spanning Europe and Asia.

And now Obama is pushing us into a confrontation with Russia over Ukraine and the Crimea.

As Ernesto notes:

Late last year when Ukraine’s now-ousted president Viktor Yanukovych surprisingly canceled plans for Ukrainian integration into the European Union in favor of stronger ties with Russia, the US may have viewed Ukraine as slipping even further out of its reach.

At that point, with the pieces already in place, the US moved to support the ousting of Yanukovych, as evidenced by the leaked phone conversation between US Assistant Secretary of State Victoria Nuland [arch-Neocon Robert Kagan‘s wife]  and US Ambassador to Ukraine Geoffrey Pyatt.  When peaceful protests were not effective in unseating Yanukovych, the violence of the ultra-nationalist Svoboda party and Right Sector was embraced, if not supported by the west.

In today’s Ukraine, the US runs the risk of being affiliated with anti-Semitic neo-Nazis, a prospect it probably feels can be controlled via a friendly western media. But even if the risk is high, the US likely views it as necessary given the geopolitical importance of Ukraine, as Brzezinski mapped out in 1997.

In other words, Obama is following the same old playbook that the Neocons have been pushing for more than a decade.

Obama’s Former Foreign Policy Adviser Said – In 1997 – that the U.S. Had to Gain Control of Ukraine Washington’s Blog

March 16, 2014 6:54 pm / Leave a comment

Obama’s Former Foreign Policy Adviser Said – In 1997 – that the U.S. Had to Gain Control of Ukraine Washington’s Blog.

The Battle for Ukraine Was Planned in 1997 … Or Earlier

Neoconservatives planned regime change throughout the Middle East and North Africa 20 years ago. Robert Parry correctly points out that the Neocons have successfully “weathered the storm” of disdain after their Iraq war fiasco.

But the truth is that Obama has long done his best to try to implement those Neocon plans.

Similarly, ever since the Soviet Union collapsed in 1991, the U.S. has pursued a strategy of encircling Russia, just as it has with other perceived enemies like China and Iran.

In 1997, Obama’s former foreign affairs adviser, and president Jimmy Carter’s national security adviser – Zbigniew Brzezinski – wrote a book called The Grand Chessboard arguing arguing that the U.S. had to take control of Ukraine (as well as Azerbaijan, South Korea, Turkey and Iran) because they were “critically important geopolitical pivots”.

Regarding Ukraine, Brzezinski said (hat tip Chris Ernesto):

Ukraine, a new and important space on the Eurasian chessboard, is a geopolitical pivot because its very existence as an independent country helps to transform Russia. Without Ukraine, Russia ceases to be a Eurasian empire.

***

However, if Moscow regains control over Ukraine, with its 52 million people and major resources as well as access to the Black Sea, Russia automatically again regains the wherewithal to become a powerful imperial state, spanning Europe and Asia.

And now Obama is pushing us into a confrontation with Russia over Ukraine and the Crimea.

As Ernesto notes:

Late last year when Ukraine’s now-ousted president Viktor Yanukovych surprisingly canceled plans for Ukrainian integration into the European Union in favor of stronger ties with Russia, the US may have viewed Ukraine as slipping even further out of its reach.

At that point, with the pieces already in place, the US moved to support the ousting of Yanukovych, as evidenced by the leaked phone conversation between US Assistant Secretary of State Victoria Nuland [arch-Neocon Robert Kagan‘s wife]  and US Ambassador to Ukraine Geoffrey Pyatt.  When peaceful protests were not effective in unseating Yanukovych, the violence of the ultra-nationalist Svoboda party and Right Sector was embraced, if not supported by the west.

In today’s Ukraine, the US runs the risk of being affiliated with anti-Semitic neo-Nazis, a prospect it probably feels can be controlled via a friendly western media. But even if the risk is high, the US likely views it as necessary given the geopolitical importance of Ukraine, as Brzezinski mapped out in 1997.

In other words, Obama is following the same old playbook that the Neocons have been pushing for more than a decade.

The end could be nearer than you think — Paul Craig Roberts – PaulCraigRoberts.org

March 6, 2014 8:27 am / Leave a comment

The end could be nearer than you think — Paul Craig Roberts – PaulCraigRoberts.org.

March 3, 2014

The end could be nearer than you think

Readers:

We are having trouble today with the website. I do not know if it is problems caused by the typical incompetence of US business enterprises, including those who host websites and have offshored American jobs to foreign countries, or whether it is National Stasi Agency induced. Certainly, the propagandistic US government does not want any truth available to compete with Washington’s systematic lies. Washington is desperate to control the explanation of the situation in Ukraine that, as a result of Washington’s incompetence, has resulted in Ukraine falling under control of neo-nazi elements, whose rabid anti-semitic and Russophobic actions and rhetoric have caused Ukraine to split in half. If you were unable to access my column today, use this URL:http://www.paulcraigroberts.org/2014/03/03/washingtons-arrogance-hubris-evil-set-stage-war/

Eastern and southern Ukraine are Russian-speaking former Russian territories added to Ukraine in the 1950s by the Communist Party leadership of the Soviet Union. These provinces are agitating to be returned to Mother Russia where they certainly belong. They are determined not to be part of a neo-nazi regime that will be looted by Western bankers and corporations and be forced to host US missile bases that will make western Ukraine a target for nuclear annihilation, like Poland and Czech Republic.

The propagandistic rhetoric issuing from the mouths of the White House Fool and the excrement that the Fool placed in charge of the Department of State is designed to cover up the abject failure of the Obama regime’s plot to install its puppets as Ukraine’s new rulers. The Obama regime is too stupid to comprehend that its rhetoric is preparing the gullible and ignorant American population for war with Russia. The neoconservative ideologues, who have been lusting for war with Russia ever since the 1980s when I was a member of the Committee on the Present Danger, will take advantage of the war preparation, which the White House Fool and his State Department excrement are creating with their rhetoric, to start a war that will destroy life on earth.

The neoconservatives are insane. They believe that nuclear war can be won, and that the US has the advantage to destroy Russia in a first strike.

Americans are so ignorant and gullible that they do not realize that their very existence is on the line, and that the insane neoconservatives who control the weak Obama puppet are determined to cross the line.

If any are still so gullible as to believe that the illegal deposing of the elected government of Ukraine was a “sincere indigenous revolt against a corrupt government,” the delusional should watch this video of the neo-nazi intimidating the US stooge who is a member of what Washington pretends is the government of Ukraine. https://www.youtube.com/watch?v=BV5Wm3qXfy4

Here is a video of the same nazi thug intimidating another collection of US stooges that Washington pretends is a government: https://www.youtube.com/watch?v=1oVsgJMqHNY

God help the American people. Their ignorance and gullibility make them an enormous threat to life on earth.

Yes, I know. I have readers who have escaped The Matrix. But the majority of the American population is lost.

War will be the result of the ignorance, gullibility, and stupidity of the American population, its prostitute media, and the hegemonic ambitions of the evil neoconservatives. The corrupt rulers of Europe will sell out their peoples for American money until they are all vaporized in nuclear explosions.

The total corruption of truth, integrity, and morality that Washington has imposed on the Western world has aligned the West with the powers of Darkness and death. No greater evil exists than the government of the United States.

About Dr. Paul Craig RobertsPaul Craig Roberts was Assistant Secretary of the Treasury for Economic Policy and associate editor of the Wall Street Journal. He was columnist for Business Week, Scripps Howard News Service, and Creators Syndicate. He has had many university appointments. His internet columns have attracted a worldwide following. His latest book,The Failure of Laissez Faire Capitalism and Economic Dissolution of the West is now available.

Memo to Obama: This Was Their Red Line! | David Stockman's Contra Corner

March 3, 2014 6:44 am / Leave a comment

Memo to Obama: This Was Their Red Line! | David Stockman’s Contra Corner.

by  • March 2, 2014

Ethnolingusitic_map_of_ukraine[1]In 1783 the Crimea was annexed by Catherine the Great, thereby satisfying the longstanding quest of the Russian Czars for a warm-water port. In fact, over the ages Sevastopol emerged as a great naval base at the strategic tip of the Crimean peninsula, where it became home to the mighty Black Sea Fleet of the Czars and then the commissars.

For the next 171 years Crimea was an integral part of Russia—a span that exceeds the 166 years that have elapsed since California was annexed by a similar thrust of “Manifest Destiny” on this continent, thereby providing, incidentally, the United States Navy with its own warm-water port in San Diego. While no foreign forces subsequently invaded the California coasts, it was most definitely not Ukrainian and Polish riffles, artillery and blood which famously annihilated The Charge Of The Light Brigade at the Crimean city of Balaclava in 1854; they were Russians defending the homeland.

And the portrait of the Russian ”hero” hanging in Putin’s office is that of Czar Nicholas I—who’s brutal 30-year reign brought the Russian Empire to its historical zenith, and who was revered in Russian hagiography as the defender of Crimea, even as he lost the 1850s war to the Ottomans and Europeans. Besides that, there is no evidence that Putin does historical apologies, anyway.

In fact, its their Red Line. When the enfeebled Franklin Roosevelt made port in the Crimean city of Yalta in February 1945 he did know he was in Soviet Russia. Maneuvering to cement his control of the Kremlin in the intrigue-ridden struggle for succession after Stalin’s death a few years later, Nikita Khrushchev allegedly spent 15 minutes reviewing his “gift” of Crimea to his subalterns in Kiev in honor of the decision by their ancestors 300 years earlier to accept the inevitable and become a vassal of Russia.

Self-evidently, during the long decades of the Cold War, the West did nothing to liberate the “captive nation” of the Ukraine—with or without the Crimean appendage bestowed upon it in 1954. Nor did it draw any red lines in the mid-1990′s when a financially desperate Ukraine rented back Sevastopol and the strategic redoubts of the Crimea to an equally pauperized Russia.

In short, in the era before we got our Pacific port in 1848 and in the 166-year interval since then, the security and safety of the American people have depended not one wit on the status of the Russian-speaking Crimea. Should the local population now choose fealty to the Grand Thief in Moscow over the ruffians and rabble who have seized Kiev, what’s to matter!  Worse still, how long can America survive the screeching sanctimony and mindless meddling of Susan Rice and Samantha Power? Mr. President, send them back to geography class; don’t draw any new Red Lines. This one has been morphing for centuries among the quarreling tribes, peoples, potentates, Patriarchs and pretenders of a small region that is none of our damn business.

Memo to Obama: This Was Their Red Line! | David Stockman’s Contra Corner

March 3, 2014 6:44 am / Leave a comment

Memo to Obama: This Was Their Red Line! | David Stockman’s Contra Corner.

by  • March 2, 2014

Ethnolingusitic_map_of_ukraine[1]In 1783 the Crimea was annexed by Catherine the Great, thereby satisfying the longstanding quest of the Russian Czars for a warm-water port. In fact, over the ages Sevastopol emerged as a great naval base at the strategic tip of the Crimean peninsula, where it became home to the mighty Black Sea Fleet of the Czars and then the commissars.

For the next 171 years Crimea was an integral part of Russia—a span that exceeds the 166 years that have elapsed since California was annexed by a similar thrust of “Manifest Destiny” on this continent, thereby providing, incidentally, the United States Navy with its own warm-water port in San Diego. While no foreign forces subsequently invaded the California coasts, it was most definitely not Ukrainian and Polish riffles, artillery and blood which famously annihilated The Charge Of The Light Brigade at the Crimean city of Balaclava in 1854; they were Russians defending the homeland.

And the portrait of the Russian ”hero” hanging in Putin’s office is that of Czar Nicholas I—who’s brutal 30-year reign brought the Russian Empire to its historical zenith, and who was revered in Russian hagiography as the defender of Crimea, even as he lost the 1850s war to the Ottomans and Europeans. Besides that, there is no evidence that Putin does historical apologies, anyway.

In fact, its their Red Line. When the enfeebled Franklin Roosevelt made port in the Crimean city of Yalta in February 1945 he did know he was in Soviet Russia. Maneuvering to cement his control of the Kremlin in the intrigue-ridden struggle for succession after Stalin’s death a few years later, Nikita Khrushchev allegedly spent 15 minutes reviewing his “gift” of Crimea to his subalterns in Kiev in honor of the decision by their ancestors 300 years earlier to accept the inevitable and become a vassal of Russia.

Self-evidently, during the long decades of the Cold War, the West did nothing to liberate the “captive nation” of the Ukraine—with or without the Crimean appendage bestowed upon it in 1954. Nor did it draw any red lines in the mid-1990′s when a financially desperate Ukraine rented back Sevastopol and the strategic redoubts of the Crimea to an equally pauperized Russia.

In short, in the era before we got our Pacific port in 1848 and in the 166-year interval since then, the security and safety of the American people have depended not one wit on the status of the Russian-speaking Crimea. Should the local population now choose fealty to the Grand Thief in Moscow over the ruffians and rabble who have seized Kiev, what’s to matter!  Worse still, how long can America survive the screeching sanctimony and mindless meddling of Susan Rice and Samantha Power? Mr. President, send them back to geography class; don’t draw any new Red Lines. This one has been morphing for centuries among the quarreling tribes, peoples, potentates, Patriarchs and pretenders of a small region that is none of our damn business.

ClubOrlov: How To Time Collapses

February 10, 2014 6:44 am / Leave a comment

ClubOrlov: How To Time Collapses

Douglas Smith
Zeus

Over the past half a decade I’ve made a number of detailed predictions about collapse: how it is likely to unfold, what its various manifestations are likely to be, and how it will affect various groups and categories of people. But I have remained purposefully vague about the timing of collapse and its various stages, being careful to always append “give or take half a decade” to my dire prognostications. I wasn’t withholding information or being coy; I really had no way of calculating when collapse will happen—until five days ago, when, out of the blue, I received the following email from Ugo Bardi:

Hi Dmitry,

You may be interested in this post of mine.

Starting from this post, I’m trying to draw a parallel between the collapse of the Soviet Union and the impending collapse of Italy. There are, as always, similarities and differences. In particular, the Soviet Union collapsed almost immediately after that oil production flattened out and started declining. On the contrary, the Italian government survives despite a loss of 36% in oil consumption.

My impression is that it is all related to different taxation methods. I understand that the Soviet tax system was based mainly on commodity taxes and on taxes on production. When production stalled, people had nothing to buy and the government had nothing to tax because most people owned nothing and had little or no savings in banks. So, the government had no choice but to fold over and disappear.

Instead, the Italian system is based largely on income tax and property tax. The government is losing revenues on commodity taxes (e.g. on gasoline) but it can compensate with property taxes. Italians, on the average, are “rich,” in the sense that they have savings in banks and most of them own their homes. So, the government can tax their properties and their savings. As long as Italians still have something taxable, then the government will survive. It will disappear only when it has managed to strip citizens completely of everything they have.

Do you agree with this interpretation? (BTW, Italy as a state may be even more culturally diverse than the old Soviet Union was.)

Ugo

I wrote back:

Hi Ugo,

Very interesting article. Yes, the entire southern tier of the EU is in some early stage of collapse, but so far it hadn’t occurred to me to draw parallels between it and USSR. Now that you mention it, the parallel is obvious: it is financial collapse triggered by something having to do with oil, but with polarities reversed, and delayed by a period of wealth destruction.

In the case of USSR, taxation wasn’t really a source of government revenue. The national economy was based on government ownership of everything, central planning and budgets, and a system of assigning ministerial contracts to enterprises owned by the ministries. The external economy was a matter of exporting hydrocarbons in exchange for foreign currency, which was used to buy grain—mostly feed grain for cattle, without which the population would become protein-deprived and malnourished. Over the so-called “stagnation” period of the 1980s the Soviet economy became hollowed out because of several trends. Too much spending on defense was one of them. Another was that investment in capital goods (machinery, plant and equipment) reached the point of diminishing returns, which is very difficult to characterize but not so difficult to observe. Lastly, Solzhenitsyn and the dissident movement had done irreparable damage to Soviet prestige, destroying morale. The coup de grace, when it came, consisted of two pieces. One was the inability to expand oil production given the state of Soviet oil extraction technology of the era. The other was the fall in oil prices, down to $10/bbl at one point, because North Sea and Alaska both went on stream, and the Saudis pumped as much oil as they could based on a tacit agreement with the US to depress oil prices and thus crush the Soviets. In this they largely succeeded. The USSR became heavily indebted to the West, and, at the very end, needed Western credit to keep the lights on in the Kremlin. One of the final scenes featured Gorbachev on the phone with [West Germany’s Chancellor] Helmut Kohl asking him to ask the Americans to release some funds.

Now, I can see parallels to this in what is happening now in the US and in the EU, but with all the polarities reversed: here oil flows in and money flows out, and the coup de grace [will be] high oil prices rather than low. Instead of failures of central planning, which failed to allocate production effectively, we have failures of the globalized market, where production is effectively globalized but consumption is ineffectively localized among the wealthy and the formerly wealthy, and has to be fueled by credit. Instead of diminishing returns from deployment of capital goods, we have diminishing returns from deployment of capital itself, where a unit of new debt now produces much less than a unit of economic growth. The damage to reputation and morale is mostly on the US side of the Atlantic, where in place of Solzhenitsyn and the dissident movement we have Abu Ghraib [scandal], [Wikileaks’ Julian] Assange and [Edward] Snowden. With the EU, most of the damage has to do with [the] experience of economic disparities between the rich core and the increasingly impoverished periphery, and the recent move in Ukraine to walk away from the EU, and the ensuing Western-financed mayhem in Kiev, show that the bloom is off the EU rose as well. The runaway military spending is likewise mostly a US issue, although epic failures in Afghanistan, Libya and Syria, in which the EU is complicit, are likely to have some effect as well.
Comparing USSR to Italy is difficult because of the disparity of scale: 1/5 of the planet’s dry surface versus a smallish peninsula; an economy that slowly decayed in isolation versus an integral part of the EU; a country where the choice is between burning hydrocarbons or dying of exposure versus one where the choice is between riding a scooter or taking the bus; a country with a ravaged agricultural sector unable to grow enough protein calories versus a nation of foodies where corner groceries make worthy subjects for oil paintings. But I think that when it comes to the actual collapse, when it finally comes, there will still be identifiable similarities. Financial collapse always comes first: all sorts of financial arrangements unravel as the center becomes unable to float the periphery, and in response the periphery starts to withhold economic cooperation. The result is a breakdown in supply chains, shutdown of production, and, shortly thereafter, shutdown of commerce. In the case of the USSR, this unfolded in 1989-91 as the various republics and regions refused to cooperate with Moscow. I suspect that this will also happen in the EU, at some point. But I think that you are exactly right that whereas the average Soviet citizen could not be fleeced, Italy, and much of the EU, still have plenty of fat sheep that the government can shear to keep things running. Thus we are looking at a few more years of steady decline before the lights start going out. This, then, is the key distinction: the USSR collapsed promptly because it was already skin and bones, whereas the US and the EU still have plenty of subcutaneous fat to burn through. But they are, in fact, burning through it. And so, the conclusion is, collapse will come, but here it will take a little longer.
-Dmitry
Ugo responded:
I agree with you, of course. It makes perfect sense to me and it is the main point I was making: the Soviet government couldn’t tax Soviet citizens too much because they owned very little.
…
The Italian government instead has some luck in the sense that Italians have some savings and most of them own their homes. So, the government is progressively strangling their citizens to squeeze out of them all that they have—while they still have something.

The last round of tax increases in Italy is targeting homes and it is really, really hurting, especially the poor. You can be poor here, and still own a house that you inherited from your parents. Now the government asks you to pay as if that house were revenue! That is truly evil. People who don’t have the money to pay this property tax can only indebt themselves with banks (or worse). Eventually, they’ll have to sell their homes or give them to the bank (or to the Mafia)—the result is disaster for everybody, including for the banks, and even the government. But the whole thing has a perverse logic. It has the advantage that it generates some immediate cash which is badly needed, then the hell with the future.

The [next] phase will be to target bank accounts. Then, when there will be nothing left, the government will decamp and say bye to everybody. Hell, what a planet I landed in…..

All the best,

Ugo

And so here is the outline of the method for calculating the timing of collapses:
1. Find out when the collapse clock starts running by looking for a significant drop in energy consumption
2. Calculate how long the clock is going to run by dividing the total wealth of the citizenry by the economic shortfall of the shrinking economy
For any industrial economy the collapse clock starts running as soon as the consumption of fossil hydrocarbons starts dropping appreciably. It is sometimes difficult to tell whether this has already happened if the country in question is still a major hydrocarbon producer. Gross production numbers can still be holding steady or even seem to go up a bit, but once you subtract all the energy that is being expended on energy production itself, and on the unprofitable mitigation of its many undesirable consequences, you might be able see a decline sooner rather than later. Notably, the net energy yield, or EROEI, is very low for all the newer unconventional sources that have been trumpeted as panaceas in recent years, such as ones that require hydrofracturing and drilling in deep water, tar sands and so on. (The so-called “renewables,” such as wind, solar and biofuels, are an even bigger joke, because all of them with the exception of hydroelectric plants have net energy that is too low to sustain an industrial economy, plus they all depend on technologies that are “nonrenewable” unless the country maintains a vast industrial base which happens to run on fossil fuels.) And so the drop in net energy consumption is clear for Italy, which produces 7% of the oil it consumes and imports the rest, whereas the picture is somewhat less clear for the US, which still manages to supply around a third of its oil.
Since all industrial economies literally run on fossil fuels, lower energy consumption immediately translates into a lower level of economic activity and a shrinking economy. The gap between the expectations of economic growth that are dialed into all of the financial arrangements, and the reality of economic decline driven by lower energy availability, has to be plugged with the population’s savings. There are a number of ways of expropriating wealth, generally proceeding from various kinds of stealth taxation measures, to more overt measures, to outright expropriation. Taking the US as the example (since I am most familiar with it) the expropriation cascade is proceeding as follows:
1. Central bank policy of zeroing out of interest rates on savings combined with massive money-printing. This forces money into speculative markets (stocks, real estate, etc.) creating huge financial bubbles; when these bubbles pop, savings are said to be destroyed, but in reality that money has already been spent by the government or used to fill the private coffers of those closely associated with the government.
2. Government policy of canceling retirements or short-changing retirees. The federal government has worked hard to make its official measure of inflation all but meaningless so that it can justify its policy of making cost of living adjustments to social security payments that are far less than the the real increases in the cost of living. Another federal expropriation scheme is via guaranteed student loans, which cannot be discharged through bankruptcy, and which have created an entire class of indentured servants. At the more local level, state and municipal governments are curtailing or canceling retirement programs by virtue of going bankrupt.
3. Ever more onerous reporting requirements for financial transactions, especially for those who try to leave the country and expatriate their savings. All foreign bank accounts must now be reported, and people who work abroad are now forced to file voluminous annual reports that cost thousands of dollars to prepare. Those who decide to repudiate their US citizenship are made to pay a hefty exit tax. Nevertheless, record numbers of US citizens have been doing just that. Just having a US passport often makes it impossible to set up accounts in foreign financial institutions, which have little desire to comply with US demands for financial disclosure.
These are the measures that are already in place. Looking at what’s been tried before, here and elsewhere, we can see what other measures are in the works. Among them:
1. So-called “bail-ins” where insolvent financial institutions are rescued by confiscating depositor funds. We can expect the script to be similar to what happened in Cyprus: politically connected depositors get word ahead of time and yank out their money forthwith; everybody else gets shorn.
2. Limits on bank withdrawals. You might still “have” money in the bank, but that’s the only place you can “have” it. The semantics of the verb “to have” can be quite tricky, you see…
3. Ever-increasing taxes on property resulting in property confiscation. It works like this: government prints money and hands it out to its friends; its friends use it to temporarily bid up property values; property taxes go up to a point where the property owners can’t pay them; owners lose their properties. A staggering 63% of real estate purchases in Florida last December were cash purchases.
4. Various kinds of sudden, new, super-complex regulations, noncompliance with which results in very large fines. In turn, nonpayment of these fines results in forfeiture of assets. The US has some very curious laws according to which inanimate objects such as cars, boats and houses can be charged with a crime, seized and auctioned off. We can expect lots more of such property grabs in the future.
5. Gold confiscation, which happened once in the US already, so there is a precedent for it. Yes, I know that this will make a number of people upset, but I am yet to hear a convincing argument for why the US government would not resort to gold confiscation when that turns out to be one of the few remaining cards it can play.
This list is by no means comprehensive. If you feel that I have missed something major, please submit a comment, and I will consider it for inclusion.

Now, it would be nice if all of these measures worked like clockwork, always producing the right amount of wealth confiscation to levitate the government, and the financial scheme on which it is based, for a little while longer. Alas, as with most things, something is bound to go wrong at some point, most likely when you least expect it. And it seems like a dead certainty that something will in fact go wrong well before every last American citizen is relieved of every bit of their accumulated wealth and is living peacefully in a roadside ditch, wearing an attractive loincloth and a stylish mudpack for a hat, quietly perfecting a nouvelle cuisine that features snails au jus and dandelion salad au chaume. Maybe you can imagine it, but I can’t. Beyond a certain point, I can only imagine reports of widespread “public disturbances” followed by “breakdown of law and order.”
Still, I hope that this framework will allow us to set an upper bound for how long collapse can be deferred for any given country. Once hydrocarbon consumption drops appreciably, the clock starts running. Then it is possible to estimate how long the clock can theoretically run by dividing the remaining net worth of the population by the size of the hole in the economy created by falling energy consumption.
But after that things get messy. Some countries will hollow themselves out quite peaceably, and go softly into the night, while others will explode and fast-forward though the financial-commercial-political collapse sequence. And so perhaps the most useful thing to know is whether the collapse clock is already running for any given country, because if it is already running, then it becomes a fool’s game to wait around for the inevitable outcome.
One reasonable approach is to get another passport and quietly relocate to another country. It is important that this country be one for which the collapse clock is not running and won’t be for a long time yet. Ideally this would be a financially secure, politically stable, energy independent, militarily invincible, underpopulated, non-extradition country which will be among the last to be severely disrupted by climate change and where you could have lunch with Edward Snowden. But this approach doesn’t appeal to everyone, and I understand that.
And so another approach is to adapt to what’s coming while remaining in the US, or in any other country for which the collapse clock is running, by making yourself, and your wealth, should you have any, illegible. Here is a very nice article by one smart cookie by the name of Venkatesh Rao on the concept of illegibility. And here is his very nice primer on being an illegible person. This kind of illegibility has nothing to do with bad handwriting; it is about hiding in plain sight. Please read these as homework, because I will have more to say on this topic in the near future. And I would love to see a list of countries for which the collapse clock is running, along with first-order estimates for how long it could possibly run for each one, based on their population’s net worth and the country’s economic shortfall. But since this post has just gone over 3000 words, I am leaving this as an exercise for the reader.

US-China Rivalry More Dangerous Than Cold War? | The Diplomat

January 30, 2014 12:58 pm / Leave a comment

US-China Rivalry More Dangerous Than Cold War? | The Diplomat.

US-China Rivalry More Dangerous Than Cold War?

Mearsheimer says a war between the US and China will be more likely than a US-Soviet one was during the Cold War.

zachary-keck_q
January 28, 2014
 1.6kThe prominent realist international relations scholar John Mearsheimer says there is a greater possibility of the U.S. and China going to war in the future than there was of a Soviet-NATO general war during the Cold War.

Mearsheimer made the comments at a lunch hosted by the Center for the National Interest in Washington, DC on Monday. The lunch was held to discuss Mearsheimer’s recent article in The National Interest on U.S. foreign policy towards the Middle East. However, much of the conversation during the Q&A session focused on U.S. policy towards Asia amid China’s rise, a topic that Mearsheimer addresses in greater length in the updated edition of his classic treatise, The Tragedy of Great Power Politics, which is due out this April.

In contrast to the Middle East, which he characterizes as posing little threat to the United States, Mearsheimer said that the U.S. will face a tremendous challenge in Asia should China continue to rise economically. The University of Chicago professor said that in such a scenario it is inevitable that the U.S. and China will engage in an intense strategic competition, much like the Soviet-American rivalry during the Cold War.

While stressing that he didn’t believe a shooting war between the U.S. and China is inevitable, Mearsheimer said that he believes a U.S.-China Cold War will be much less stable than the previous American-Soviet one. His reasoning was based on geography and its interaction with nuclear weapons.

Specifically, the center of gravity of the U.S.-Soviet competition was the central European landmass. This created a rather stable situation as, according to Mearsheimer, anyone that war gamed a NATO-Warsaw conflict over Central Europe understood that it would quickly turn nuclear. This gave both sides a powerful incentive to avoid a general conflict in Central Europe as a nuclear war would make it very likely that both the U.S. and Soviet Union would be “vaporized.”

The U.S.-China strategic rivalry lacks this singular center of gravity. Instead, Mearsheimer identified four potential hotspots over which he believes the U.S. and China might find themselves at war: the Korean Peninsula, the Taiwan Strait and the South and East China Seas. Besides featuring more hotspots than the U.S.-Soviet conflict, Mearsheimer implied that he felt that decision-makers in Beijing and Washington might be more confident that they could engage in a shooting war over one of these areas without it escalating to the nuclear threshold.

For instance, he singled out the Sino-Japanese dispute over the Senkaku/Diaoyu Islands, of which he said there was a very real possibility that Japan and China could find themselves in a shooting war sometime in the next five years. Should a shooting war break out between China and Japan in the East China Sea, Mearsheimer said he believes the U.S. will have two options: first, to act  as an umpire in trying to separate the two sides and return to the status quo ante; second, to enter the conflict on the side of Japan.

Mearsheimer said that he thinks it’s more likely the U.S. would opt for the second option because a failure to do so would weaken U.S. credibility in the eyes of its Asian allies. In particular, he believes that America trying to act as a mediator would badly undermine Japanese and South Korean policymakers’ faith in America’s extended deterrence. Since the U.S. does not want Japan or South Korea to build their own nuclear weapons, Washington would be hesitant to not come out decisively on the side of the Japanese in any war between Tokyo and Beijing.

Mearsheimer did add that the U.S. is in the early stages of dealing with a rising China, and the full threat would not materialize for at least another ten years. He also stressed that his arguments assumed that China will be able to maintain rapid economic growth. Were China’s growth rates to streamline or even turn negative, then the U.S. would remain the preponderant power in the world and actually see its relative power grow through 2050.

In characteristically blunt fashion, Mearsheimer said that he hopes that China’s economy falters or collapses, as this would eliminate a potentially immense security threat for the United States and its allies. Indeed, Mearsheimer said he was flabbergasted by Americans and people in allied states who profess wanting to see China continue to grow economically. He reminded the audience that at the peak of its power the Soviet Union possessed a much smaller GDP than the United States. Given that China has a population size over four times larger than America’s, should it reach a GDP per capita that is comparable to Taiwan or Hong Kong today, it will be a greater potential threat to the United States than anything America has previously dealt with.

Washington’s Blog | MLK ASSASSINATED BY US GOVT: King Family civil trial verdict

January 19, 2014 2:49 pm / Leave a comment

Washington’s Blog

MLK ASSASSINATED BY US GOVT: King Family civil trial verdict

Coretta Scott King: “We have done what we can to reveal the truth, and we now urge you as members of the media, and we call upon elected officials, and other persons of influence to do what they can to share the revelation of this case to the widest possible audience.” – King Family Press Conference, Dec. 9, 1999.

The assassination of Dr. King is just one OBVIOUS crime from among ~100 of the US “1% oligarchy” of crucial importance. The crimes center in wars, money, and media; and call for arrests of obvious “leaders” orchestrating these crimes, or a Truth & Reconciliation process.

Dr. Martin Luther King’s family and personal friend/attorney, William F. Pepper, won a civil trial that found US government agencies guilty in the wrongful death of Martin Luther King. The 1999 trial, King Family versus Jowers and Other Unknown Co-Conspirators, is the only trial ever conducted on the assassination of Dr. King. The King Center fully documents the case, with full trial transcript.

The King family’s attempts for a criminal trial were denied, as suspect James Ray’s recant of a guilty plea were denied. Mr. Ray said that his government-appointed attorney told him to sign a guilty plea to prevent the death penalty for his part in delivering the murder weapon for Dr. King’s assassination, and to prevent arrests of his father and brother as probable co-conspirators. Mr. Ray produced a letterfrom his attorney stating the promise that Mr. Ray would receive a trial. When Mr. Ray discovered that he was solely blamed for Dr. King’s assassination and would never receive a trial, the King family’s and Mr. Ray’s subsequent requests for a trial were denied.

The US government also denied the King family’s requests for independent investigation of the assassination.

Therefore, and importantly, the US government has never presented any evidence subject to challenge that substantiates their claim that Mr. Ray assassinated Dr. King.

US corporate media did not cover the trial, interview the King family, and textbooks omit this information. Journalist and author, James Douglass:

“I can hardly believe the fact that, apart from the courtroom participants, only Memphis TV reporter Wendell Stacy and I attended from beginning to end this historic three-and-one-half week trial. Because of journalistic neglect scarcely anyone else in this land of ours even knows what went on in it. After critical testimony was given in the trial’s second week before an almost empty gallery, Barbara Reis, U.S. correspondent for the Lisbon daily Publico who was there several days, turned to me and said, “Everything in the U.S. is the trial of the century. O.J. Simpson’s trial was the trial of the century. Clinton’s trial was the trial of the century. But this is the trial of the century, and who’s here?” ”

For comparison, please consider the media coverage of O.J. Simpson’s trials:

“Media coverage of the Simpson trial, which began in January 1995, was unlike any other. Over two thousand reporters covered the trial, and 80 miles of cable was required to allow nineteen television stations to cover the trial live to 91 percent of the American viewing audience. When the verdict was finally read on October 3, 1995, some 142 million people listened or watched. It seemed the nation stood still, divided along racial lines as to the defendant’s guilt or innocence. During and after the trial, over eighty books were published about the event by most everyone involved in the Simpson case.”

The overwhelming evidence of government complicity introduced and agreed as comprehensively valid by the jury includes:

  • US 111th Military Intelligence Group were at Dr. King’s location during the assassination.
  • 20th Special Forces Group had an 8-man sniper team at the assassination location on that day.
  • Usual Memphis Police special body guards were advised they “weren’t needed” on the day of the assassination.
  • Regular and constant police protection for Dr. King was removed from protecting Dr. King an hour before the assassination.
  • Military Intelligence set-up photographers on a roof of a fire station with a clear view to Dr. King’s balcony.
  • Dr. King’s room was changed from a secure 1st-floor room to an exposed balcony room.
  • Memphis police ordered the scene where multiple witnesses reported as the source of shooting cut down of their bushes that would have hid a sniper.
  • Along with sanitizing a crime scene, police abandoned investigative procedure to interview witnesses who lived by the scene of the shooting.
  • The rifle Mr. Ray delivered was not matched to the bullet that killed Dr. King, and was not sighted to accurately shoot

The King family believes the government’s motivation to murder Dr. King was to prevent his imminent camp-in/Occupy at Washington, D.C. until the Vietnam War was ended and those resources directed to end poverty and invest in US hard and soft infrastructure. 

This conclusion is consistent with US history, past and recent, for US “leaders” to lie and kill for wars of choice. These lies are then “covered” by corporate media in news and history texts.

Please watch this six-minute video of the evidence from the trial, and this eight-minute video on the FBI’s disclosures of covert operations against Dr. King, including confirmation from his closest friends and advisors.

Coretta Scott King, Dr. King’s wife, is certain of the evidence after 30 years of consideration from the 1968 assassination to the 1999 trial:

“For a quarter of a century, Bill Pepper conducted an independent investigation of the assassination of Martin Luther King, Jr. He opened his files to our family, encouraged us to speak with the witnesses, and represented our family in the civil trial against the conspirators. The jury affirmed his findings, providing our family with a long-sought sense of closure and peace, which had been denied by official disinformation and cover-ups. Now the findings of his exhaustive investigation and additional revelations from the trial are presented in the pages of this important book. We recommend it highly to everyone who seeks the truth about Dr. King’s assassination.” — Coretta Scott King.

The US Department of Justice issued a report in 2000 that explains their investigation into their own possible guilt in the assassination found no evidence to warrant further investigation. Dr. King’s son issued the following statement rebuking a “self-study” rather than the independent investigation the King family assert the evidence demands:

“We learned only hours before the Justice Department press conference that they were releasing the report of their results of their “limited investigation,” which covered only two areas of new evidence concerning the assassination of Dr. King. We had requested that we be given a copy of the report a few days in advance so that we might have had the opportunity to review it in detail. Since that courtesy was not extended to us, we are only able at this time to state the following:

1. We initially requested that a comprehensive investigation be conducted by a Truth and Reconciliation Commission, independent of the government, because we do not believe that, in such a politically-sensitive matter, the government is capable of investigating itself.

2. The type of independent investigation we sought was denied by the federal government. But in our view, it was carried out, in a Memphis courtroom, during a month-long trial by a jury of 12 American citizens who had no interest other than ascertaining the truth. (Kings v. Jowers)

3. After hearing and reviewing the extensive testimony and evidence, which had never before been tested under oath in a court of law, it took the Memphis jury only one (1) hour to find that a conspiracy to kill Dr. King did exist. Most significantly, this conspiracy involved agents of the governments of the City of Memphis, the state of Tennessee and the United States of America. The overwhelming weight of the evidence also indicated that James Earl Ray was not the triggerman and, in fact, was an unknowing patsy.

4. We stand by that verdict and have no doubt that the truth about this terrible event has finally been revealed.

5. We urge all interested Americans to read the transcript of the trial on the King Center website and consider the evidence, so they can form their own unbiased conclusions.

Although we cooperated fully with this limited investigation, we never really expected that the government report would be any more objective than that which has resulted from any previous official investigation.”

Let’s summarize: Under US Civil Law, covert US government agencies were found guilty of the assassination of Dr. Martin Luther King, Jr. Dr. King was the leading figure of the Civil Rights Movement, a Nobel Peace Prize winner, and widely recognized as one of the world’s greatest speakers for what it means to be human. The family’s conclusion as to motive was to prevent Dr. King from ending the Vietnam War because the government wanted to continue its ongoing covert and overt military operations to control foreign governments and their resources.

It is therefore a factual statement that under US Civil Law, the US government assassinated Dr. King.

People of sufficient intellectual integrity and moral courage to apply critical thinking skills will embrace the trial evidence and testimony, jury conclusion, and King family analysis as appropriate and helpful information in seeking the facts.

People who at least temporarily reject challenging information out of fear might say something like, “The government killed Dr. King? That’s a crazy conspiracy theory!”

Let’s consider that statement.

When someone says that a body of evidence is “crazy,” or a “conspiracy theory” (meaning an irrational claim easily refuted by the evidence) that’s a claim. With a claim comes a burden of proof. In this case, the person would have to demonstrate command of the facts to explain and prove why the evidence from the civil trial is somehow “crazy” and refute the evidence.

If the person can do this, it would be tremendously helpful in understanding the facts. However, we know from our experience that such statements almost always have zero factual support, and that the person making such a claim literally doesn’t know what they’re talking about.

We also know from our experience, a person making such a statement is really voicing an emotional reaction something closer to the spirit of, “The government killed Dr. King? Ok, I read and understood the paragraphs about the trial and evidence. I read Mrs. King’s and her son’s statement. I haven’t invested the time to verify how valid that information is. I’m not stupid, but because the implications of what that means is so disturbing, I’m going to deny anything about it could possibly be true as my first response. If I’m going to continue being in denial and refuse to discuss the evidence, I’ll attack the messenger.”

We also need to consider the lack of coverage by US corporate media of this compelling evidence, trial verdict, and King family testimony from over 30 years’ analysis of the facts. Recall the evidence of US corporate media reporting being infiltrated by CIA agents to propagandize Americans’ access to information. This included the Director of the CIA’s admission to Congress that they have over 400 agents working in corporate media to make the US public believe what the CIA wants them to believe.

In 2006, George Washington University used a Freedom of Information Act request to obtain the US military’s “Information Operations Roadmap.” This formerly secret and approved document details present US government strategies to generate propaganda, and then attack Internet alternative media that provides dangerous facts and discussion. The military promoted the term, “Fight the net.”

Although I won’t enter the burden of proof here, you may know that there are similar and related bodies of evidence that the US government assassinated other American leaders. The 1975 Senate Church Committee disclosed that the US government initiated and helped assassination attempts on multiple foreign heads of state.

If we were discussing how the population of some other nation could employ critical thinking skills to understand current events from anytime in history, we would certainly understand the importance to anticipate disinformation from government, danger of controlled media, and assassination as a political weapon.

Failure to do so would appropriately elicit the label attributed to the first dictator of the Soviet Union, Vladimir Lenin. Such people who believe what their government tells them when the history and present have overwhelming objective evidence to explain, document, and prove that the government is typical of so many other historical self-serving oligarchies are:

“Useful idiots.”

To the extent the United States today is any different from all other nations and all other times is up to your exercise of critical thinking skills.

And that said, think and choose carefully: choices have consequences, especially our most important ones.

More Evidence We’re Losing Our Freedom : Personal Liberty™

January 17, 2014 2:44 pm / Leave a comment

More Evidence We’re Losing Our Freedom : Personal Liberty™.

More Evidence We’re Losing Our Freedom

PHOTOS.COM

The latest Index of Economic Freedom has just come out, and the news for the United States isn’t good. The study, a joint effort of The Heritage Foundation and The Wall Street Journal, concludes that economic freedom in the United States has declined again. This is the seventh year in a row this has happened.

For more than 200 years, the United States led the world in economic freedom. For many of those years, we were also the most prosperous Nation in the world, as we demonstrated that economic abundance was one of the happy consequences of economic freedom. Now, many other nations are confirming the same thing.

But we aren’t. Now, we’re not even in the top 10 of the 178 countries the study measured. Thanks a lot, Barack Obama! And Congress. And, yes, even the U.S. Supreme Court. All have been complicit in the unrelenting assaults on free enterprise in this country.

In an opinion piece in The Journal, Terry Miller, one of the study’s directors, had this to say: “It’s not hard to see why the U.S. is losing ground. Even marginal tax rates exceeding 43% cannot finance runaway government spending, which has caused the national debt to skyrocket.”

But out-of-control government spending is just one of the areas where the United States is in decline. As Miller wrote: “The Obama administration continues to shackle entire sectors of the economy with regulation, including health care, finance and energy. The intervention impedes both personal freedom and national prosperity.”

So if the U.S. is losing economic freedom, how is the rest of the world doing? Believe it or not, economic freedom is actually improving in most of the world. According to the study, 114 countries of the 178 in the study enjoyed an increase in economic freedom in the past year. And some 43 countries scored their highest ranking ever in the index’s 20-year history.

Leading the list once again is Hong Kong, which scored 90.1 on the 100-point scale. Following it in the “free” category are Singapore, Australia, Switzerland, New Zealand and our northern neighbor, Canada.

Rounding out the top 10 in the “mostly free” category are Chile, Mauritius, Ireland and Denmark. Then comes Estonia. The United States finally shows up next, at 12th on the list. Yes, it’s hard to believe, but even Estonia did better than the U.S. this time.

Maybe that shouldn’t be a surprise. It turns out that several countries in Eastern Europe that used to be dominated by the Soviet Union are thriving now that they have embraced free-market economies. According to the study, Estonia, Lithuania and the Czech Republic are the European countries that gained the most economic freedom in the past 20 years.

Congress, are you listening?

According to the study, 18 countries in Europe have reached new highs in economic freedom. They include Germany, Sweden, Poland and Georgia. On the other hand, five countries — Greece, Italy, France, the United Kingdom and Cyprus — scored lower than they did when the first index appeared 20 years ago.

No surprise on which countries are on the bottom of the list. In descending order, they are Iran, Eritrea, Venezuela, Zimbabwe, Cuba and North Korea. All are known for despotic governments, government-run economies and few, if any, property rights — oh, and one other thing: the abject poverty endured by most of their citizens.

The study measures economic freedom in 10 different categories under four broad areas, which it calls the pillars of economic freedom. They are,

  1. The Rule of Law, which includes property rights and lack of corruption;
  2. Limited Government, measured by fiscal freedom and controls on government spending;
  3. Regulatory Efficiency, such as business freedom, labor freedom and monetary freedom; and finally,
  4. Open Markets, as measured by freedom to trade, investment freedom and financial freedom.

Does it really matter how a country scores on economic freedom? Absolutely!

“Countries achieving higher levels of economic freedom consistently and measurably outperform others in economic growth, long-term prosperity and social progress,” Miller wrote.

It is an outrage that this country, whose freedom and prosperity made us an inspiration for the world, is now measurably on the decline. The report says that the U.S. has suffered “particularly large losses in… control of government spending.” But we already knew that, didn’t we?

The latest jobs report from the U.S. Bureau of Labor Statistics confirms just how shaky things have become in the U.S. economy. While forecasters expected new jobs in December to exceed 200,000, the BLS number came in at a lowly 74,000.

Yet even with that disappointing number, the unemployment rate in this country somehow dropped 3/10 of a point, from 7 percent to 6.7 percent. How is that possible?

It turns out that nearly five times more people stopped looking for work in December than found new jobs. An estimated 347,000 Americans left the labor force and are no longer counted among the unemployed.

Clearly, there’s the solution to make the unemployment numbers look good. If enough people who don’t have jobs simply give up looking for them, unemployment in this country would drop to zero. Wouldn’t that give the Obamaites something to crow about?

The sad truth is that the actual number of people with jobs in this country — the so-called “labor participation rate” – is at a measly 62.8 percent. That’s the lowest number since 1978.

“[T]his year’s index demonstrates that the U.S. needs a drastic change in direction,” Miller wrote.

Indeed it does. But as long as Harry Reid holds the reins as Senate Majority Leader, we’re not going to get it. Happily, that could change in a big way this November, when he could receive a well-deserved demotion to Minority Leader.

I’ll have a lot more to say in coming days on the key elections that could make that happen. In the meantime, keep reminding your friends that Ronald Reagan got it right when he said: “Government is not the solution to our problem; government is the problem.”

The latest Index of Economic Freedom confirms the wisdom of the former President’s remark. The more government gets out of the way, the more a country will prosper. The results of five years of Obama prove that the opposite is true, too.

Until next time, keep some powder dry.

–Chip Wood

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