Sunday, July 22, 2018

Dear Kids: It's Up to You Now, and It Always Has Been

Philip Larkin was more right than he realized. They do f*ck you up, your mum and dad, but this time, they've managed to f*ck up the entire world. Let us count the ways--and provide a few lessons from their failures. 

1. Segregation has been the defining feature of 21st century Western civilization, as has constant warfare. You'd think more people would make the connection between conflict and segregation, but you'd be overestimating humanity's ability to self-analyze--especially when much of its wealth derives from selective inflation in residential property. Seen properly, segregation constitutes unconscionable insider trading on the future of one's neighborhood at the expense of all other residents. 

To fight this alliance between respectable taxpayers and the shills they elect, we must understand segregation is not the natural result of registering property, respecting property rights, insurance company incentives, or Hernando de Soto-style capitalism. ("The issue in the 21st century in the West is assetless paper and everywhere else it is paperless assets.") It is the result of lawyers and governments creating legal systems that prioritize tax revenue using short-term metrics (i.e., not factoring in long-term costs of segregation) and then delivering services based on assumptions of expected tax revenue. To take one extreme example, during the 1992 L.A. riots, LAPD cordoned off affluent Beverly Hills, leaving Koreatown and other minority areas to fend for themselves. Of course more prosaic examples that expose segregation's long-term inefficacy exist, but by now, even the most myopic must see two systems: one for respectable taxpayers, and another for the ones left behind invisible lines until a crisis makes them visible. 

Once we realize the primary evil in the world can be reduced to a single phenomenon, we can marshal our resources to eliminate it. Unlike abstract wars on poverty and terrorism, a war on segregation is capable of producing tangible results. Complexity by and for lawyers can be made simple; government hiring practices can be reformed to avoid nepotistic job structures often benefiting one race, one religion, or one ideology; and mafias thriving in the ruins of political neglect can be co-opted. 

Any decent sociologist or city planner's goal should be to create James J. Guild's Indonesia, the opposite of segregation: 

This is not a city of sanitized and detached nuclear families living in insulated bubbles and disconnected from one another. It’s a city of bonds, where neighbors — probably because they are packed together so densely — chat with one another and hang out on the curb eating fried tempe with raw chilis. The city may not be perfectly planned, but everyone that lives here — minus the super rich — experience and share in those imperfections together.

There has never been a sustained War on Segregation. Its supporters are too numerous, too united, too powerful. Brown vs. Board of Education failed even as it succeeded, but as the world becomes increasingly globalized and diverse, I foresee mandatory conscription if civilization is to continue.  

2. Any entity that can attract and deploy capital without consequences will become corrupt--often with unforeseen consequences. For example, study Project MKUltra or review America's "black budget," estimated at 50 billion USD annually (as of 2016). Ted Kaczynski, a domestic terrorist caught only because a family member recognized his handwriting, was part of Project MKUltra. Some lessons: community collaboration and other factors not part of any formal accounting mechanism can be more valuable than tools valued at billions. Meanwhile, progress is often packaged with expensive bells and whistles to prevent you from seeing the gifts proffered are less valuable than the ones you already have. 

3.  Incremental change is common in advanced societies because compromise is a sign of maturity. When consistent, incremental change occurs in pursuit of a specific goal benefiting all--educational reform, tax reform, etc.--progress continues. When incremental change occurs because political factions are preserving their own bailiwicks, social cohesion suffers, revolution inches closer, and propaganda proliferates. If you see stagnation and greater inequality--potentially fatal self-inflicted wounds when others are improving living standards--be flexible in your choice of location unless you have a long history in one place.
From Jim Rogers' Street Smarts (2013)
4.  Don't read or listen to people who rely on secondhand information. Every single scenario has two sides--look at Barry Seals' life, for example--and remember: if one person's motives and motivations vary so vastly by the month, large organizations with hundreds of individuals cannot be summarized in neat packages. 

5. You will hear others telling you to keep your "inner child." They mean your sense of wonder. To that end, watch and find good movies. Almost anything with Audrey Hepburn, Marilyn Monroe, Cary Grant, or Hong Kong filmmaker Wong Kar-Wai will do. These are my sources of wonder--yours may differ. 

6. Be careful whenever you establish legal preferences. First, all laws will be enforced by Establishment-minded employees, whether police, lawyers, or judges. Second, the enforcement of the law matters far more than the law itself. (Selective drug arrests and prosecutions are simple examples of the aforementioned principle.) Third, the original purpose or intent of any law will always degrade or attenuate, and as society itself changes, laws made by previous legislators are more likely to be useless over time--except to characters within the Establishment desiring to entrap political or other enemies.

7. In the end, the world is filled with charlatans, liars, and thieves, but it has always been this way, and one of your ancestors may have been one of them. Your lack of knowledge about the past--and the future--does not excuse you from being honest and forthright. In the end, each generation must contend with an ever-increasing pile of dung, so get your shovel, and get to work. 

Wednesday, July 11, 2018

Book Review: Murakami's Norwegian Wood: Sex, Suicide, and Love in 1960s Japan

"Don't feel sorry for yourself. Only assholes do that." 
A cross between Joyce's Ulysses and Kerouac's On the Road, Haruki Marakumi takes the reader on a stumbling, windy journey from teenager to adult in Norwegian Wood (2000). Set in the 1960s, our protagonist Watanabe is out of place at his university but takes on habits--obsessive cleaning, wanton sexual flings, etc.--of his more polished, affluent students. He quickly tires of the pomp and false fronts--characterized by one suicide after another--and sets out to find himself. In the meantime, he is caught between two women: Naoko, a friend in a strange, bitter love triangle who cannot bring herself to consummate her relationship with Watanabe more than once; and Midori, a carefree, unpredictable woman also out of place among affluent classmates but from a working class background that grounds her and her sister. Midori is so captivating, so passionate, the book pales until she enters, like the Kate Winslet character in the 2004 film, Eternal Sunshine of the Spotless Mind. Later, another woman enters the mix and allows Watanabe to move forward, but until the very end, his desires vacillate between a love he cannot have and a love he cannot predict. 

Unfortunately, the translation from Japanese to English creates stilted dialogue. Only Midori's conversations seem unforced. Perhaps Watanabe intended Midori to be the only interesting character in the book, but it's hard to believe he deliberately made all other characters bleak in order to let Midori's light shine that much brighter. If you can tolerate the dreary first 65% of the book, the final 35% is well worth your time. 

Saturday, June 30, 2018

For Anthony Bourdain

I can explain suicide to you. It's as simple as an analog TV's antennae. 

Some people are lucky--the manufacturer delivers the set, and it's ready to watch straight out of the box. The antennae sticks up in exactly the right places, making it easier to stay close to home. 

Others, not so lucky. Their antennae needs adjusting for a clear picture, or they'll receive only static. Most of the time, though, it works, so life goes on. 

And the rest? Companies call them defective, defying perfect QC. Ones who kept these TVs keep adjusting the antennae because the pictures and sounds, when they come through, are the brightest and most interesting in the neighborhood. 

And only this TV, this antennae, could show you the world from a Colombian barrio rooftop, a Vietnamese restaurant with plastic chairs, and a tiled floor with foul-smelling Icelandic fermented shark. 

But the antennae, as we mentioned, is defective. No one knows how to make the right adjustments, and nothing dampens its signal. Its sharpness captures every smell, every song note, and every person (especially his first love). It's all in there somewhere, jostling around, looking for a place to call home, until one day, he decides the cacophony is too much, too bright, too much. 

He turns it off.

Dedicated to Anthony Bourdain (1956-2018) 

Thursday, June 14, 2018

America in 2018: Debtor Democracy

America's debt-fueled economic model is incompatible with merit and possibly tolerance once we account for physical and educational segregation. A debtor democracy cannot succeed without new immigrants and/or new residents willing to contribute to ensure existing and new debt rolls over. As with America's entitlement programs, its political structure is geared not towards resolution of problems but using debt to pass responsibility to future generations. 

Outsiders fail to appreciate how much American inequality and de facto segregation are premised on assumptions of meritocracy. When almost 50% of your population is without significant assets in a debtor democracy, the foundation cracks, causing the younger generation to question capitalism and other values. In short, at the same time the status quo needs to be preserved in order to repay debt, the younger generation has every incentive to break its shackles. We have arrived at this troublesome scenario in large part because of the ways debt and the tax code, especially the mortgage interest tax deduction, have promoted segregation. 

Rather than attempting to fix segregation in ways that identify deserving residents, America's government has outsourced the task of social cohesion to private schools and private banking institutions--with one notable exception. A teenager poorly educated has little choice but to rely on parental connections--increasingly tenuous as segregation increases--or join America's military, the sole entity the government has decided is worthy of its direct involvement in identifying talent. 

Consider a society where the government borrows virtually unlimited money to promote a program heavily biased in favor of men while using the men in increasing meaningless ways as wartime readiness favors technology, economic agreements, and diplomacy over brawn and manpower. Such a society will inevitably create tensions between its banking sector--and, by default, the private sector--and its government by issuing bonds and inviting foreign investment in ways that favor the status quo over residents' well-being. In a dictatorship, such an approach may be viable; in a democratic republic, it is suicide. Welcome to America in 2018. 

Saturday, June 9, 2018

Scandinavian Military Conscription: Cyberattacks & the Failure of Diplomacy

Sweden recently enacted mandatory military service, following Norway's lead. Both countries claim they must be ready in the face of renewed Russian threats, but Crimea's one-off aside, it's hard to believe higher troop counts will prevent continued cyberattacks and disinformation campaigns. The truth is the United Nations' failure to create a deterrence framework for cyberattacks has opened the door for useless and counterproductive military expansion and recruitment. 

Notwithstanding diplomatic shortcomings, cyberattacks present substantial and difficult problems under the military's existing approach of deterrence. For example, when should a country launch physical attacks against another country's cyberattacks? When the cyberattacks impact more than 2% of GDP? When they result in actual theft or loss above a certain threshold? What evidentiary standards ensure impersonation hasn't occurred? What is the penalty for online false flag operations? As of 2018, no one knows. 

Consequently, until a framework for proportional response to cyberattacks can be formulated, Scandinavia's sudden interest in military readiness revolves around trade and access to international markets. Note that almost all international trade still occurs through shippingnecessitating protection through naval cooperation and port securityIn the modern world, whether your country's products get safely from Point A to Point B depends on your leverage in trade agreement negotiations, which can be tied to NATO membership or alliances. Such membership is not a casual affair but one involving long-term financial and other commitments. NATO members are required, on paper, to spend at least 2% of their budgets on military spending to ensure proper readiness; however, much of these taxpayer monies will not be used to improve domestic disaster readiness or the lives of military recruits but on military hardware and products from the U.S. and its partners. 
Jim Rogers' Street Smarts (2013)
In the meantime, non-NATO countries, especially Russia and China, are building alternative trade routes on land (aka new Silk Road) or through bridges, presenting a threat to ever-increasing military expenditures that assume constant or increased shipping volumes

Now that we have a proper overview, I'm concerned about the discourse in Scandinavian countries following legislation on military conscription. One Swede wrote

Sweden needs to impose tax reliefs and increase salaries for its military members as two instruments to meet policy goals. Even if this could result in higher costs, the Swedish government must come to conclusion that the current spending levels are insufficient to meet its own goals, making its latest mandatory conscription policy merely symbolic.

Interestingly, his approach mirrors the United States' desire for Sweden to increase its military spending from around 1% of its budget to 2%. I researched him online, and he is an intern for the Republican Party in America, the pro-military political party. I added the following comments to his post, and I'll share them here as well: 

The United States has mismanaged its economy and harmed social cohesion by failing to properly audit its military spending. The benefits you mention--as well as job preferences for veterans in the private sector--are tied to trillions of dollars of debt post-9/11, most of it on adventurism and some of it on the jobs and benefits you mention. 

One reason these benefits exist is because military volunteerism is often the primary way for citizens and non-citizens to avoid working low-level, dead-end jobs in small American cities. Such spending is not popular in larger, more affluent American cities with diversified economies because people with options don't generally want to join an entity that has arguably lost every war since Vietnam. Where such spending is popular in larger cities, it is often tied to high-paying private sector jobs, i.e., defense contractors.   

In short, the U.S. military has the military benefits you mention as a de facto jobs program, especially for young men in rural areas with underdeveloped private sectors. A country able to create enough meaningful jobs in the private sector may find its military overlooked by most of its citizens. In such a situation, it may need to resort to conscription to maintain troops ready to assist in case of domestic disasters (earthquakes, floods, etc.). In the absence of a clear and present danger or need to spread economic gains more equitably across territories, your advice to increase military spending seems beneficial to countries with military spending as primary economic catalysts rather than countries focused on social welfare and social cohesion. 

Feel free to contact me with any questions. I haven't visited Sweden yet, but Uppsala is on my list :-) 

I often quote Eisenhower in my writing, and I'll quote him again: "Every gun that is made, every warship launched, every rocket fired, signifies in the final sense, a theft. The cost of one modern, heavy bomber is this: a modern, brick school in more than 30 cities."

American discourse once recognized citizens could not have both thriving domestic infrastructure and excessive military spending, i.e., "guns vs. butter." In other words, do you want a new aircraft carrier or a new university? When presented with the question directly, almost every citizen will choose the latter. Absent active war or a credible threat, fear or a lack of common sense are needed to choose the former. Accordingly, the so-called Russian threat is being used by NATO and its allies to convince Europe and other countries (e.g., Saudi Arabia) to maintain the military-industrial complex and its trillions of dollars of debt--debt that is unsustainable without additional buyers of weaponry or presumed naval dominance in trade.
Jim Rogers' Street Smarts (2013)
I never imagined a world where diplomacy would be actively thwarted or ignored in order to promote ever-increasing military spending, regardless of necessity or results. Even tiny Singapore has caught the bug: "[D]efense constitutes the largest item in the annual national budget." 
Chua Beng Huat's Liberalism Disavowed (2017)
You're never too young to be indoctrinated, I guess.
Remind me... does Singapore have any enemies besides SARS?
It's as if everyone in the world has forgotten the reason the United Nations was created: to prevent war through superior diplomacy and, by implication, unnecessary military spending. But of course people haven't forgotten the reasons for diplomacy at all--they've replaced international diplomacy with trade agreements and import-export or development banking institutions, reducing the United Nations' efficacy through fragmentation and rendering it a body for social progress and humanitarian aid rather than conflict avoidance. Such changes have serious implications for smaller and less developed countries wishing to maintain their independence and for larger, more developed countries like Turkey, which has realized NATO membership does not automatically confer greater labor and trade cooperation. (Notice how few Turkish products are on European supermarkets' shelves?) 

A world where no international body commands the moral weight necessary to ensure peace without de facto military bribes to larger countries means a world where "might makes right," and larger, more economically-powerful countries can take advantage of smaller countries. Such regression is tragic. Witness Woodrow Wilson's speech on the League of Nations, later the United Nations:  

There is only one power to put behind the liberation of mankind, and that is the power of mankind. It is the power of the united moral forces of the world, and in the Covenant of the League of Nations the moral forces of the world are mobilized. For what purpose? Reflect, my fellow citizens, that the membership of this great League is going to include all the great fighting nations of the world, as well as the weak ones... They enter into a solemn promise to one another that they will never use their power against one anther for aggression; that they never will impair the territorial integrity of a neighbor; that they never will interfere with the political independence of a neighbor; that they will abide by the principle that great populations are entitled to determine their own destiny and that they will not interfere with that destiny; and that no matter what differences arise amongst them they will never resort to war without first having done one or other of two things--either submitted the matter of controversy to arbitration, in which case they agree to abide by the result without question, or submitted it to the consideration of the council of the League of Nations. 

Has everything America championed become dust in the wind? Do we not realize freedom from war and freedom from a police state require sober statesmen and worldwide cooperation to corral private and public weapons markets? Every soldier who joined the military or was conscripted did so because he or she trusted the government not to waste their time, effort, or sacrifices. To that end, neither military leaders nor international bodies have adapted to the threat of unconventional warfare, which vitiates most military expenditures. No matter what Hollywood tells you, nations that cannot resolve agricultural tariffs or shootings of unarmed journalists but seek to increase military cooperation require sleight of hand to maintain such strange juxtapositions. May all of us--not just Scandinavians--remember why diplomacy exists before we weaken domestic economies and social cohesion in honor of the military-industrial machine and its debt-fueled, precarious expectations. 

Bonus: "The United Nations has no power to prevent war, but it can try to avoid another war. The U.N. will be effective only if no one neglects his duty in his private environment. If he does [neglect his duty], he is responsible for the death of our children in a future war." -- Albert Einstein, at Lincoln University in 1946 

Thursday, June 7, 2018

Book Review: Mingfu's The China Dream

Liu Mingfu discusses the scourge of hegemony, preferring superpowers that balance each other's excesses and tendencies to overreach. However, he is too sanguine on military spending, seeing it as necessary for deterrence. To justify continued military spending worldwide, he even argues the military has a more educated population than the civilian population on a per capita basis, but cherry-picks above a certain rank and references a Joseph Nye quote out of context to make his argument. 
Mingfu admires Russia's military history, especially in WWII, and claims Marxism's economic ideals helped influence America by making it more moderate. He likely means unions and socialist leaders like Eugene Debs. 
The book would have improved with an American editor clarifying some gaps. Nevertheless, it is a must-read for anyone interested in China's views on the rest of the world. 

Bonus: "A country that makes enemies everywhere in the world, no matter how large or powerful, is a country that will never be safe." 

Tuesday, June 5, 2018

Book Review: Jim Rogers' Street Smarts aka Thoughts from a Southern Gentleman

Jim Rogers has had one heck of a life. From a small town in Alabama to the Ivy League to all around the world on a motorcycle, his insights are never preachy. He covers a wide range of topics, including one particularly negative anecdote about his former co-worker, George Soros. (FYI: even back in the day, consent decrees were worthless.) 
Big on commodities, Rogers promotes farming as the job of the future. He reasons food prices have been too low, and--just as in gold/silver mining or oil exploration--low commodity prices usually cause fewer producers and/or lower production, often leading to a crash. As prices and producers decline, new (and presumably more efficient) investors, seeking profits, will enter, rebalancing the supply/demand equation. At some point, prices will rebound, and the higher prices will create a snowball effect for both buyers (no longer concerned with deflation) and producers, especially if banking institutions issue loans. The alternative, a government-controlled economy, is inferior because it generally will not allow entities to failAn avowed capitalist, Rogers explains, "The cure for high prices is high prices. It always works...." "The Soviets did not have anything because nobody produced anything, and nobody produced anything because prices were set so low." 

To his credit, Rogers realizes the flaws in his own paradigm and lambasts the Federal Reserve's easy money policies. Excessive Federal Reserve economic intervention is harmful, he argues, excoriating both Greenspan and Bernanke. In Rogers' experience, capitalism provides a self-reinforcing mechanism for regeneration aka creative destruction. It's true Rogers is known as a "bear," which means he makes money when companies fail, but the characterization of bias is unfair--every hedge fund manager sells short. 
Readers interested in politics will enjoy Rogers' comments on domestic and international affairs, including details about his new home, Singapore, and his reasons for relocation. 
On the black market.
Two passages stand out: 1) "As recently as 1987 the United States was a creditor nation."; 2) "America is borrowing money to pay for military hardware that sits and rusts in the sun. The man who manufactures the hardware makes money, but after that, there is no beneficiary. The investment does not represent an ongoing source of production, the way a canal or a railroad does." 
There are too many jerks in the financial world, but Rogers seems to be one of the good guys, someone who's never forsaken or forgotten his humble Southern roots. 

Bonus: Rogers shares a lot of information on Singapore. See below for excerpts.
The "genius of Singapore": public housing programmes for all.
HDB flats in Singapore (2018)