Friday, February 26, 2021

Most Political Debates, Summarized in Two Conversations

The majority of America's political debates can be summarized in just two short conversations:

SCENE ONE

A: "Look at this wide-ranging, comprehensive legislation that will change everything." 

B: "Have you actually read it? This legislation spans several volumes, much of it indecipherable. If it really replaces the existing paradigm, then you're seeing a bonanza for politically-connected players as they swoop in to provide what this legislation requires." 

A: "Under existing legislation, your side benefited because you passed it and your friends and lobbyists doled out contracts based on your understanding of the legislation. Why it is a problem if we do the same thing?"

B: "Well, if it works, we're going to catch hell because it'll look like we didn't know what we were doing before, so I'm going to try to stop it. Then we'll copy the parts we think we can incorporate into our existing framework, take the credit, and let the judges resolve any poorly-worded sections." 

A: "Sounds like you've got a lot of faith in lawyers and litigation, but go ahead and try to stop us. We'll blame you for harming the poor, handicapped, [insert vulnerable group], and the country by not passing this." 

B: "How are you going to fund the legislation? More taxes? Good luck with that." 

A: "We will do exactly what you do--borrow money. We're the federal government. We can borrow as much as we want." 

B: "What's next? Are you going to promise voters a unicorn in every backyard?"

A: "If it wins us the election, why not?" 

SCENE TWO 

A: "We've been getting complaints about [INSERT GOVERNMENT AGENCY]. They are too slow." 

B: "We can centralize the work, but eventually we'll become a sprawling, intractable 
bureaucracy and lose all efficiency we gained pre-consolidation." 

A: "But right now, by spreading the work across different local and state agencies, we're creating unnecessary complexity." 

B: "Sure, but we're also reducing opportunities for centralized corruption and giving residents an easier time contacting local officials, who are more closely situated to the issues." 

A: "That may be true, but decentralization also potentially creates entrenched political fiefdoms because multiple agencies can slow down the work deliberately or claim they are not getting enough credit or recognition. Can't one entrenched city council hold up the entire process if it rejects accountability or if it tacks on additional requirements purely to justify its existence or expansion?" 

B: "Sort of. The more decentralized a government process, the more lawyers are required to navigate the system. In other words, more government complexity reduces personal agency, but also potentially improves the system as it adapts over time while keeping lawyers, judges, and legal associations in the loop." 

A: "So decentralization oftentimes means more lawyers, which either improves efficiency or reduces it based on finding the right lawyer; on the other hand, centralization might makes everything easier by creating a 'one-stop shop' but in doing so, eventually increases the risk of corruption." 

B: "In theory, the smaller the country and the smaller the population, the better centralization works, whereas the larger the country and the more diverse the population, the better decentralization works. This, however, is only a theory. Many other factors are in play, such as inflation, social cohesion, etc." 

END SCENE

© Matthew Mehdi Rafat (February 2021)

Bonus: In the spirit of political cartoonist Tom Toles, I'll add the following sidebar to the first scene: "It's almost as if an independent third party could somehow help." 

Saturday, February 13, 2021

Jocko Willink and the Fog of War

I've copied a Twitter thread below. With so many technological standards, a simple copy-and-paste across different platforms is no longer possible, but I've done my best to clean up the content. 

Original interview is here: https://tim.blog/2018/06/04/the-tim-ferriss-show-transcripts-jocko-willink-on-discipline-leadership-and-overcoming-doubt/ 

________________

One day, when Americans are paying war crime reparations to Iraq, I want you to remember this 2018 @tferriss interview with John Gretton Willink aka @jockowillink, former @USNavy officer. 

[The photo below appears to be from Iraq and USA's 173rd Airborne Brigade, NOT #JockoWillink.]
ImageThe issue of mentioning prisons in the interview will soon become obvious... ImageWillink continues defending the military industrial complex. Does he realize General Eisenhower popularized the term as a warning? ImageYou don't have true freedom if your country and its citizens require debt to survive. From @nntaleb: "To the ancients, someone in debt was not free, he was in bondage." ImageAlso, re: freedom in USA, "As of July 2019, the United States had the highest number of incarcerated individuals worldwide, with about 2.12 million people in prison." ImageWars are often fought not only to capture another country's resources or to prevent a rival's territorial conquests, but to place the defeated country in debt. The debt is usually demarcated in the victor's own currency, thus strengthening liquidity of victor's currency and victor's ability to impose economic as well as legal terms. Image"What difference does it make to the dead, the orphans and the homeless, whether the mad destruction is wrought under the name of totalitarianism or in the holy name of liberty or democracy?" -- Mahatma Gandhi ImageCal Fussman: "I turned to the editorial page of a British newspaper. A cartoon depicted a giant Statue of Liberty wearing sunglasses & clutching a bayoneted machine gun towering over tiny Iraqis, who were throwing back stones. There were a lot of ways to feel about that cartoon." Harold Pinter: "The crimes of USA have been systematic, constant, vicious, remorseless, but very few people have actually talked about them. You have to hand it to America. It has exercised a quite clinical manipulation of power worldwide while masquerading as a force for universal good." Almost forgot about Afghanistan: There was "'a reasonable basis to believe' that members of the Afghan National Security Forces, the US armed forces and the CIA had committed 'war crimes,' including torture and rape." I’ll end with a cautionary quote from Vietnam War veteran Paul Coates: “When you’re in the military, the only thing coming at you is military information. It’s just like being in America: You are totally brainwashed. Everything around me supported the war in Vietnam, so I bought into it.” And so it goes.

Wednesday, February 10, 2021

The Democratic National Convention was a Farce -- and So is the Impeachment

Hunter S. Thompson once said Democrats don't learn. Today, Congress apparently finished Day 2 of an impeachment trial against a president no longer in office. I say "apparently," because no one sane is voluntarily watching the trial, nor does anyone believe enough votes exist to convict. Democrats seem unable to comprehend Republicans voting for a trial did so the same way an apiarist pretends to befriend bees in order to take their honey. (The analogy isn't perfect, because unlike the Democratic Party, professional apiarists understand danger and wear protection before walking into a hive.) In any case, the Democrats, having won Congress by less than a 1% margin and the presidency only because too many people voted for the Libertarian Party, are approaching a second impeachment as if Donald Trump is Richard Nixon reincarnated. An American history lesson is warranted, and we'll start from last year.

Not until after the 2020 Democratic Convention did I realize uninvited Representative Tulsi Gabbard was, like VP pick Kamala Harris, a mixed Desi. The popular media had hit us so many times with stories of Harris's ethnic background--visions of Obama and sugar plums surely dancing in their heads--they ignored the fact that the Democrats' messages of unity and diversity were contradicted by a single absent person. 

As an immigrant with an American passport--I no longer call myself American, preferring a more distended designation--everything indicates I stand to reach the upper echelons of political power only if I conform and agree with one of two sides. In elevating a mismatched duo of prosecutor and public defender to the top of the Democratic Party while literally shutting out anti-war dissenters, there is no longer any difference between the Democrats and the Republicans except on the issue of abortion. Decades of unchecked military spending since Archbishop Ngô Đình Thục and Catholic Joseph McCarthy dragged Americans into Vietnam have given the military-industrial complex a holy victory: total control of America's political structure with an obedient Catholic leading the way. 

Conventions were not always this way in America, that alleged land of the free. At the 1968 Democratic Convention, reporter Dan Rather was attacked by security personnel as he attempted to question a delegate being removed, and Senator Andrew Ribicoff dared go off-script, criticizing Mayor Daley's Gestapo-like tactics. (Catholic Richard Daley responded by insulting Ribicoff's Jewish background.)

Each generation doubtless feels called upon to reform the world. Mine knows that it will not reform it, but its task is perhaps even greater. It consists in preventing the world from destroying itself. Heir to a corrupt history, in which are mingled fallen revolutions, technology gone mad, dead gods, and worn-out ideologies, where mediocre powers can destroy all yet no longer know how to convince, where intelligence has debased itself to become the servant of hatred and oppression, this generation starting from its own negations has had to re-establish, both within and without, a little of that which constitutes the dignity of life and death. -- Albert Camus (1957)

The conflict's genesis? The Vietnam War aka the American War of Aggression. One faction of the Democratic Party, led by George McGovern and Eugene McCarthy (not to be confused with pro-war Joseph McCarthy), was anti-war, and another, led by Hubert Humphrey, favored continued military action with the objective of forcing a negotiated settlement. The unpopularity--and infeasibility--of the war was underscored by VP Humphrey in 1965, who wrote, "American wars have to be politically understandable by the American public."

American wars have to be politically understandable by the American public. There has to be a cogent, convincing case if we are to have sustained public support. In World Wars I and II we had this. In Korea we were moving under UN auspices to defend South Korea against dramatic, across-the-border conventional aggression. Yet even with those advantages, we could not sustain American political support for fighting the Chinese in Korea in 1952. Today in Vietnam we lack the very advantages we had in Korea. The public is worried and confused. -- VP Hubert Humphrey, in 1965, ten years before the last USA serviceman left Vietnam

As part of the generation that grew up under multiple Iraq invasions--not just for oil, but natural gas--Humphrey's words sound quaint. It was against this conflicted backdrop and a mandatory military draft that the 1968 Democratic National Convention occurred, ensuring a volatile event. Policemen beat anti-war protesters using batons, knowing they had the full support of Chicago's leadership. Consequently, for at least one day, Americans couldn't tell the difference between the Chicago mob and their own government. How did the Democratic Party go from being so concerned about anti-war sentiment that it was willing to beat protesters in broad daylight to barring anti-war politicians from their own Convention? The answer is gerrymandering, another name for political segregation. Put simply, if you divide enough factions into their own districts, you can easily govern any group not already in power by ensuring conflicting opinions never meet in a public forum, thus sputtering and stalling out. Post-WWII, though the prevailing framework internationally
and domestically has been more "divide and govern" than "divide and conquer," American students are taught Western democracies promote optimal communication between conflicting groups.

[G]errymanders will only get worse (or depending on your perspective, better) as time goes on—as data becomes ever more fine-grained and data analysis techniques continue to improve. What was possible with paper and pen—or even with Windows 95—doesn’t hold a candle (or an LED bulb?) to what will become possible with developments like machine learning. And someplace along this road, “we the people” become sovereign no longer. -- Justice Kagan, dissenting, Rucho v. Common Cause (2019) 

In 1992, when Americans lacked conflicting viewpoints about the supremacy of their political system, Francis Fukuyama talked about the end of history. A mere decade later, General Colin Powell would cheerlead America into Iraq, another Vietnam, proving history was very much alive and continued to repeat itself. From that debacle arose Abu Ghraib and the destruction of America's credibility, which included the Democratic Obama/Biden administration assassinating an American citizen without due process. "The dumb are never with us for long, and there is a lot of evidence to suggest that Republicans learn faster than Democrats..." 

We now arrive at 2021, when the Democratic Party is impeaching a president already out of office, repeating the same highfalutin bullying that made Trump so popular in the first place. I've heard of security theater, in which the government takes actions that "make people feel more secure without doing anything to actually improve their security," so perhaps this impeachment falls under the category of "political theater." Why, then, does it seem so much more pernicious than any Shakespearean tragedy? 

© Matthew Mehdi Rafat (February 2021)

If it weren't for this constant struggle on the part of the few creative types to expand the sense of reality in man, the world would literally die out. We are not kept alive by legislators and militarists, that's fairly obvious. We are kept alive by men of faith, men of vision. They are like vital germs in the endless process of becoming. -- Arthur Miller (USA)

Tuesday, February 9, 2021

2021 Wall Street Quotations

In February 2021, I decided to start a collection of quotes from Wall Street executives and pundits. 

February 9, 2021: "Now there are, with very few exceptions, no sectors that are cheap. [Yet] I think the market will gradually grind up during the year. I don’t see a correction anytime soon, unless the situation changes dramatically." -- 
JP Morgan's co-president Daniel Pinto (source: CNBC) [Shiller P/E Ratio 35.62]

February 10, 2021: "If there is a bubble anywhere, it is not in the equity market, it is in the fixed-income market." -- Cathie Wood, chief executive of ARK Invest (source: CNBC) [Shiller P/E Ratio: 35.59]   

February 17, 2021: from Eddy Elfenbein's blog:

Mark Hulbert has an interesting column at MarketWatch. It’s about a trio of academics who have devised a bubble-spotting formula. 

"Applying the formula the researchers derive, I calculate there is an 80% chance that the Technology Hardware, Storage & Peripherals index will be 40% lower than today at some point in the next two years... Though no other industries satisfy the researchers’ definition of a bubble, two others come close. They are also in the technology arena: Semiconductors and Semiconductor Equipment, and Software. Why focus on an industry that may be in a bubble, rather than the market as a whole? Prof. Greenwood told Barron’s that he and his fellow researchers learned from their study of the history of bubbles that they 'rarely are marketwide' events. Far more common, he said, is for a bubble to manifest in certain pockets of the market even as other sectors remain undervalued."

March 26, 2021: from Barron's, by Andrew Bary, headline: "Higher Taxes? Deficit Spending? Why the Stock Market Isn't Worried." [Shiller P/E Ratio: 35.75] 

March 27, 2021: from Bloomberg, by Ishika Mookerjee, Albertina Torsoli, and Lisa Pham, headline: "Funds Bet on a Consumer Boom to Rival 'Roaring Twenties.'" [Shiller P/E Ratio: 35.75] 

[Note: The Great Depression--and stock market crash in 1929--occurred after the excesses of the Roaring Twenties, as well as indications Germany would not honor WWI reparations.] 

April 8, 2021: from CNBC, by Kevin Stankiewicz, quoting Wharton School finance professor Jeremy Siegel: "It isn’t until the Fed leans really hard then you have to worry. I mean, we could have the market go up 30% or 40% before it goes down that 20%... We’re not in the ninth inning here. We’re more like in the third inning of the boom." [Shiller P/E Ratio: 36.81] 

April 11, 2021: "The path of least resistance for US equities remains higher." -- Bill Miller, CFA (S&P 500 4128.60)

April 15, 2021: "From a traditional perspective, the market is fractured and possibly in the process of breaking completely." -- David Einhorn 

May 23, 2021: "In real terms, the home prices have never been so high. My data goes back over 100 years... I don’t think that the whole thing is explained by central bank policy. There is something about the sociology of markets that’s happening." -- Robert Shiller, CNBC.com [Shiller P/E Ratio: 36.86]