Questions and Observations

Free Markets, Free People

D-Day plus 65 years

Yesterday evening I thought about what was occurring at the same time 65 years before in Europe. Young paratroopers of the 82nd and 101st Airborne Divisions as well as the British 6th Airborne Divison and 1st Canadian Parachute Battalion were headed in for night combat jumps with the mission of securing key bridges and road junctions and setting up blocking positions to prevent German reinforcements from reaching the beaches of Normandy. Of the 17,000 US airborne troops engaged in operation Overlord, 1,003 were KIA, 2,657 were WIA and 4,490 were declared MIA.

At the same time, off that coast, the largest amphibious assault fleet the world had ever seen, drawn from 8 allied navies (6,939 vessels: 1,213 warships, 4,126 transport vessels (landing ships and landing craft), and 736 ancillary craft and 864 merchant vessels), began gathering. 19 and 20 year old young men, who to that point had never seen a shot fired in anger nor fired one themselves, would get their baptism in war on Omaha, Gold, Utah,  Swordand Juno beaches. In all 160,000 allied troops would land that day.

Eisenhower meets with US Co. E, 502nd Parachute Infantry Regiment (Strike), photo taken at Greenham Common Airfield in England about 8:30 p.m. on June 5, 1944.

Eisenhower meets with US Co. E, 502nd Parachute Infantry Regiment (Strike), photo taken at Greenham Common Airfield in England about 8:30 p.m. on June 5, 1944.

At Pointe du Hoc, the US 2nd Ranger Battalion assaulted the massive concrete gun emplacements that commanded the beach landing sites. They had to scale 100 foot cliffs under enemy automatic gunfire to reach them. When they did, the found out the guns had been moved further inland. They pressed their assault, found them and destroyed them and then defended the location for two days until relieved. The operation cost them 60% casualties. Of the 225 rangers who began the operation, only 90 were still able to fight at its end.

On Omaha beach, the US 1st and 29th Infantry Divisions landed opposite the veteran German 352nd Infantry Division. They had sited their defensive positions well and built concrete emplacements which were all but immune from bombardment. The initial assault waves of tanks, infantry and engineers took heavy casualties. Of the 16 tanks that landed upon the shores of Omaha Beach only 2 survived the landing. The official record stated that “within 10 minutes of the ramps being lowered, [the leading] company had become inert, leaderless and almost incapable of action. Every officer and sergeant had been killed or wounded [...] It had become a struggle for survival and rescue”. Only a few gaps were blown in the beach obstacles, resulting in problems for subsequent landings.

Leaders considered abandoning Omaha, but the troops that had landed refused to stay trapped in a killing zone. In many cases, led by members of the 5th Ranger Battalion which had been mistakenly landed there, they formed ad hoc groups and infantrymen infiltrated the beach defenses and destroyed them, eventually opening the way for all. Of the 50,000 soldiers that landed, 5,000 became casualties of bloody Omaha.

Canadian forces landed at Juno. The first wave suffered 50% casualties in the ferocious fighting. The Canadians had to fight their way over a sea wall which they successfully did. The 6th Canadian Armoured Regiment (1st Hussars) and The Queen’s Own Rifles of Canada achieved their 6 June objectives, when they drove over 15 kilometres (9 mi) inland. In fact, they were the only group to reach their D-Day objectives.

By the end of D-Day, 15,000 Canadians had been successfully landed, and the 3rd Canadian Infantry Division had penetrated further into France than any other Allied force, despite having faced strong resistance at the water’s edge and later counterattacks on the beachhead by elements of the German 21st and 12th SS Hitlerjugend Panzer divisions on June 7 and June 8.

The Brits landed at Sword and Gold beaches. At Gold the 50th (Northumbrian) Infantry Division landed with heavy casualties, but overcame the obstacles and drove about 10 kilometers off the beach.

Led by amphibious tanks of the 13th and 18th Hussars, the landings on Sword went rather well with elements of the 8th Infantry Brigade driving 8 kilometers off the beach.

And the final beach, Utah, saw the 23,000 troops of the US 4th Infantry Division land. Through a navigation error they landed on the western most part of the beach. That happened to be the most lightly defended as well. Taking full advantage of the situation, the division fought their way off the beach and through the German defenses linking up with the 502nd and 506th Parachute Infantry Regiments of the 101st Airborne Division which had dropped in the night before and secured the inland side of the beach exits.

The liberation of Europe had begun. But it was costly. Of the total 10,000 casualties suffered that day on the beaches by the allies, the US had 6,603 of which 1,465 were killed in action. The Canadians suffered 1,074 casualties (359 KIA) and the British had 2,700.

Men who had never set foot on the continent of Europe before died trying to liberate it that day. Today most of them lie in quiet graveyards near where they fell, the only piece of land ever claimed, as Colin Powell said, was enough to lay them to rest. 65 years ago, as the guns boomed, the shells exploded and desperate and courageous men made life and death decisions on the bloody sands of Normandy beaches, the fate of the world literally hinged on their success.

I think it is important, on this day to remember that. It is also just as important to remember that had the rest of the world taken the threat posed by the evil of Nazi Germany seriously earlier than they did, the possibility exists that such a fateful landing would never have been necessary.

But it was. And to those who made it, liberated Europe and destroyed the evil that was Nazi Germany, they have my undying respect and deserve to have what they did -and why they did it – remembered by all for eternity.

~McQ

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Wow, That Stimulus – Just What Was Needed! More, Please!

Another indicator that those in charge haven’t a clue about what they’re doing and anything they say or claim should be taken with a large grain of salt.

Chart: Innocentbystanders.net

Chart: Innocentbystanders.net

So let’s see, given the “logic” which has driven the “solution” thus far, what this calls for is more stimulus money, right?

~McQ

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Recession Over? Not Yet Says NBER

Some indicators are looking better, but others, not as good:

While the U.S. economy is showing signs of stabilizing from a recession that started in December 2007, it’s “way too early” to say the contraction is over, said the head of the group that officially makes the call.

Gross domestic product estimated on a monthly basis “had a trough earlier this year, but it is way too early to say that it is a true trough rather than a pause in a longer decline,” said Robert Hall, who heads the National Bureau of Economic Research’s Business Cycle Dating Committee.

So while you continue to hear the happy talk about economic recovery, the experts aren’t yet ready to say whether we’ve bottomed out or are just taking a breather in the midst of a longer decline.

~McQ

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Zyklon B 2.0

Barack Obama recounted the contributions of Islam yesterday during his speech in Cairo. This may not have been what he was talking about:

German media outlets reported last week that a Saudi inventor’s application to patent a “killer chip,” as the Swiss tabloids put it, had been denied.

The basic model would consist of a tiny GPS transceiver placed in a capsule and inserted under a person’s skin, so that authorities could track him easily.

Model B would have an extra function — a dose of cyanide to remotely kill the wearer without muss or fuss if authorities deemed he’d become a public threat.

The inventor said the chip could be used to track terrorists, criminals, fugitives, illegal immigrants, political dissidents, domestic servants and foreigners overstaying their visas.

Another wonderful tool for the state.  My guess is it will be beta tested in NoKo.

~McQ

[HT: Neo]

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“More Czars Than The Romanovs”

That’s what John McCain has said about the Obama tendency to appoint “czars” to oversee various issues. As McCain points out, these czars operate outside of any real oversight.

And apparently there’s going to be another new “czar” in town. A – are you ready for this? – “pay czar”.

The Obama administration plans to appoint a “Special Master for Compensation” to ensure that companies receiving federal bailout funds are abiding by executive-pay guidelines, according to people familiar with the matter.

The administration is expected to name Kenneth Feinberg, who oversaw the federal government’s compensation fund for victims of the Sept. 11, 2001, terrorist attacks, to act as a pay czar for the Treasury Department, these people said.

A tendency toward fascism?

I’d have to say yes. There’s no question that this is a very deep intrusion into the management of a company which will have negative consequences on down the road (the companies still compete for talent in the same pool as companies not under these restrictions). But apparently their competitive health is less important than enforcing some arbitrary and political level of “fair” compensation.

~McQ

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Government Motors? Oh Yeah …

Politics and special interests now run General Motors – a company which should be making business decisions based on what is best for the company and its future and not what is best for some politician:

Rep Barney Frank (D-Mass.) won a stay of execution on Thursday for a General Motors plant in his district that the automaker had announced it would close.

No other lawmaker has managed to halt the GM ax. As chairman of the House Financial Services Committee Frank oversees the government’s bailout program, known as TARP. Frank’s staff said the lawmaker spokes with GM CEO Fritz Henderson on Wednesday and convinced him to keep the Norton, Mass. plant open for at least 14 months.

Because what happens in about 14 months boys and girls?

The 2010 midterms. And who controls all the bailout programs? Why the guy who was able to change Government Motors mind on the plant in his district.

Of course had some backbench freshman congressman from a red state district made the same request, what do you suppose the answer would have been?  It doesn’t get any more blatant than this — but who among our “leaders” has the stones to call him on it?

About the only thing you could hope for in this instance is a bankruptcy judge would say “no dice” and force GM to carry out its original plan, but as stagemanaged as this whole bankruptcy procedure is, I doubt something like that would happen.

~McQ

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Twitters Moved

You may have  noticed that the twitter posts about the daily economic stats are gone.  They have been moved over to the sidebar, under the add banners.

This will give me the ability to provide the ongoing econ updates via my phone–just as I am posting this–while keeping the main blog section untouched.

This should be a solution that pleases everyone.

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Socialism In America

Perhaps the time has come to be perfectly frank. We Americans live in a socialist country. In point of fact, we have for quite some time, even though private property has a long, continuing and still revered position in our society. To be sure, we aren’t an entirely socialist country, but instead a mixed one that teeters between the two extremes of collectivism and freedom (i.e. socialism and capitalism). In the past century or so, however, the scale tipped noticeably toward the socialism side, and we are now at the point where capitalism is not the dominant force. Of course, there are many who will disagree with my assessment.

Conor Clarke, for example, offers the following to dispel notions that we have become a socialist country:

Government vs. Private Ownership

Government vs. Private Ownership

Conor explains:

Have you heard that the United States is headed toward socialism? Jonah Goldberg says it is. Alabama Senator Richard Shelby says it is. Phyllis Schlafly says it is. Richard Viguerie says it is. The Republican National Committee says it is. We must be getting pretty close.

[...]

The hot-pink portion of this pie chart is the percentage of listed American business assets that have recently been nationalized by the American government (ie, General Motors). Obama’s version of socialism is so sneaky you can hardly see it!

(And there is some reason to think this actually overstates the portion of the corporate landscape that’s been nationalized, but more on that at the end of the post.*)

While the chart above would appear at first glance to be pretty dispositive of the issue (if the federal government owns so little, can we really be socialist?), it actually begs a huge question. If the segment of the economy effectively nationalized in the past several months is so vanishingly small, why is it necessary for taxpayers to fund trillions of dollars to save it? We’ll come back to that.

Next, Jon Henke observes:

NOTE: The fact is, American has always had a mixed economy, as do all modern, developed economies. The question is not one of category – capitalism or socialism? – but of degree.

[...]

Obama is not socialist. But he is more comfortable with centralizing economic power. As that centralization proceeds, the focus of public interest will shift from “how do we fix the immediate economic problems?” to “how do we fix the problems we created when we tried to fix that temporary problem?” That is when the pendulum can swing back towards decentralization and individual empowerment.

Jon takes a more organic view of the subject. That is, he posits the governing structure of the US as subject to the tolerance of the polity for centralized control of the economy. In his view, just because Obama “is more comfortable with centralizing economic power” that does not mean that we have become a socialist nation. Instead, we are merely experiencing a swing of the political pendulum towards socialism that will inevitably swing back towards the capitalism node. Left unsaid is how often that pendulum has swung away from socialism in the past 100+ years. More importantly, Jon’s assertions beg their own question — i.e. how “comfortable” must a politician and/or the populace be with centralized power before we can safely label it socialism?

In addition to the above, another line of argument is sure to be made (if it hasn’t been already) that we cannot possibly be a socialist country because private property has not been outlawed and the people as a whole do not own and control the means of production. Truly, this is the argument that Conor attempts to support with his graph (not that Conor necessarily agrees with that argument, just that he is holding up evidence that would tend to suggest socialism is not at hand). Essentially, although socialism comes in many forms, a primary ingredient is that the state (on behalf of the people) have dominance over the means of production instead of private concerns. The most extreme form, of course, is where all private property is abolished and the state decides what will be produced, by who, when and how much. Much milder versions such as social democracy exist today that, while they allow private property and much more freedom than, say, Stalinist North Korea, maintain a firm grip over the economy as a whole. Is there any doubt that Germany is a socialist country for example? The question then is, where does America fit when it this spectrum of socialist possibilities, if it fits at all?

At bottom, the problem with these sorts of arguments is almost always definitional. If I start arguing that communism never works and use the Soviet Union as an example, someone is sure to pipe up “that wasn’t real communism” followed by a neat explanation how Lenin and Stalin perverted what the true communists wanted in order to seize power for their own means. In order to avoid that annoyance, let’s at least agree on the dictionary definition of socialism:

An economic system in which the production and distribution of goods are [owned and] controlled substantially by the government rather than by private enterprise, and in which cooperation rather than competition guides economic activity. There are many varieties of socialism. Some socialists tolerate capitalism, as long as the government maintains the dominant influence over the economy; others insist on an abolition of private enterprise. All communists are socialists, but not all socialists are communists.

The definition above comes from the The American Heritage® New Dictionary of Cultural Literacy, Third Edition, and I think sums up the idea nicely. The one thing missing is the word “ownership” which, I expect, someone will insist upon, so I’ve inserted the words “owned and” into the definition. As luck would have it, this is the very concept that I think is missed by almost everyone who discusses whether or not we are a socialist country.

Specifically, what is the difference between ownership and control? Looking again to the dictionary, here is a good legal definition of “ownership”:

“one’s exclusive right of possessing, enjoying, and disposing of a thing.” 72 So. 891. The term has been given a wide range of meanings, but is often said to comprehend both the concept of possession and, further, that of title and thus to be broader than either. See 139 N.W. 101. See fee simple.

The primary concept behind ownership is that of exclusivity, such that if I own real property, for example, I can by right exclude all others. Without the ability to exclude, my “ownership” is something less than complete and the use, enjoyment and alienation (a fancy word for selling, trading or giving away) of property is limited.

To illustrate the idea, consider that you own a piece of real property (Blackacre) which is rich with gold and silver mines, oil, and an abundance of flora and fauna. In short, it is a little slice of heaven and it is all yours. Or at least it would be if were not for the fact that the flora are mostly designated as protected, the fauna are all listed as endangered, and the mineral deposits are tightly regulated, all to the extent that you cannot make any real use of your land except to look at it from a neighbor’s yard in humble admiration for its splendor. Not only are you prevented from drilling or mining on your property, you cannot even build a house or structure of any kind because that might disturb the protected species. The rules and regulations governing Blackacre are so ominous, that you can’t even sell it without first offering it to the government for a price it will set in its own arbitrary discretion. Furthermore, just on the other side of Blackacre is the Pacific Ocean fronted by a lovely beach, to which the law declares access must be allowed for the public, and there is nothing you can do to prevent them from traipsing across your wonderland. In short, you may own Blackacre in title, but you have very little, if any, control.

Of course, at least here in America, the laws and regulations aren’t quite that strict. And the vast majority of people would agree to at least some controls over private property to prevent the owners from harming other property or people (e.g. pollution, building setbacks to prevent fire, etc.)[ed. - let's ignore Coasean bargaining for now, shall we?]. At some point, however, those restrictions on the owner’s use become so burdensome as to effectively deprive the owner of any real control. The same can be said for the ownership of capital, which can be anything from money to a large factory for building tractors. When the government sets up enough rules and regulations affecting the use and enjoyment of that capital, the fact that ownership is nominally in private hands does not somehow render that government as something other than socialist.

Now, getting back to our definition of socialism, which is more important, “ownership” or “control”? To my mind, this isn’t even a close call. Without control, ownership is next to meaningless. Therefore, if the state has the ability to control the means of production (a.k.a. capital), whether directly through ownership, or indirectly through law and regulation, I contend that such state should be deemed socialist.

Think of a scale that measures the owner’s rights in her own property and how, with each new government missive, that ownership indication drops a little more. Where the state’s intervention becomes intolerable will be different for each person, but from a definitional standpoint, that intervention represents socialism. When the scale registers a significant enough intervention into the owner’s rights, socialism becomes the prevalent factor in the control of property, and private, capitalist “ownership” is either dulled or altogether neutered. Again, without the ability to control that capital, ownership is a meaningless concept that should be left out of the conversation.

Accordingly, when Conor suggests that we are not a socialist nation because the government only owns an almost immeasurable portion of the corporate assets of this country, I suggest that he use a new measurement. Specifically, one that measures the amount of control that “owners” have over their property/capital/etc. That graph would look significantly different in my estimation.

Furthermore, when Jon states that Obama is not a socialist, he’s just comfortable with centralizing economic power, I ask that he consider what ways centralizing power (i.e. control over the means of production) is not socialist, and that he provide a few examples for clarification. Also, if the pendulum is going to swing back towards more decentralization (i.e. less control over capital), how far back would it have to go before most people could be reasonably certain that we are not, in fact, a socialist nation? How far back does he think it would have to go, or is his contention that the pendulum simply hasn’t swung into socialist territory? In considering those questions, I’d ask that the concept of control, rather than titular ownership, be the dominant factor in deciding where the state stands vis-à-vis socialism.

As I see it, we’ve been living with socialism in this country for a very long time. The only difference has been one of degree and magnitude. Its pervasiveness has ebbed and flowed over the decades, but American’s tolerance for it has grown substantially, even if many of us don’t like to call the governance we desire “socialism.” Unfortunately, that’s exactly what it is, and it’s only going to become more prevalent and intrusive. After all, why would anyone who is comfortable with centralizing economic power stop it? They’ll just call it something else and move on with asserting they’re control until one day you’ll be gazing longingly at Blackacre from the public beach, because that’s the only place where you can legally see it.

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Short-sighted Partisan Politics Makes For Bad Decisions

And nothing could make that point better than this:

Defense Secretary Robert Gates isn’t ruling out spending more on missile defense than what he’s asked for in next year’s budget if North Korea or other nations increase threats against the United States.

Gates said the missile tests by North Korea over the past week appear to have attracted more support on Capitol Hill for missile interceptors.

Candidate Obama was pretty darn sure that these interceptors just weren’t needed because, you know, they just weren’t! Russia isn’t our enemy anymore and we get along fine with China – where’s the threat?!

Well during the entire lead up to the 2008 presidential campaign, North Korea and Iran were flinging missiles around right and left each, seemingly, with longer ranges and larger carrying capacity.

Ignored. In fact, as I recall, Obama dismissed Iran as not much of a threat at all. Something about Iran being a ‘tiny’ country that ‘doesn’t pose a serious threat.’ Certainly not one that required a missile defense.

Politics. All politics. Nothing based in reality, but instead dismissive rhetorical hand-waves designed to please the base. And those who controlled Congress picked up on the tune and danced to it.

Now, suddenly, by doing almost exactly the same thing they’ve done for some years, North Korea has managed to resurrect the need for a missile defense?

Why now?

Well that’s easy. Now they’re governing, suddenly not having an armed missile land on friendly territory during their watch is a priority.

Politics. The only real reason they opposed it previously is because the other side wanted it.

Of course, if questioned about why this is different than when NoKo and Iran did this sort of thing the last few times, I’m sure they’d find a way to spin it that they think wouldn’t make them seem so short-sighted, petty and partisan (read the article, there’s plenty of spin included).

That won’t change the fact one bit that they were indeed short-sighted, petty and partisan.

~McQ

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Obama’s Cairo Speech

Yes, I’ve read it. As with most of Obama’s speeches, it is a good speech and as with most of his speeches, hits all the right notes and says all the right things. What it all means, however, remains to be seen. One of the things I’ve learned so far with Barack Obama is not to take what he says too seriously as he is prone to ignore his own words or change his mind.

I also wonder if it will be considered a goodwill speech or a lecture by many. I know Israel isn’t going to be particularly happy about portions of it.

I compliment him for addressing some rather controversial issues (and this is where my thoughts about “lecturing” come from) such as women’s rights, religious freedom and democracy. None of the problems he addresses will change because of his speech nor is what he said new or original. He also spoke about Jews and quoted the Torah in Egypt which I found rather interesting.

Terrorism? The word was never mentioned. The closest he gets is talking about “extremists”. While he addressed some controversial issues, he avoided this one altogether.

And, unfortunately, he validated an Al Qaeda talking point about torture by claiming “I have unequivocally prohibited the use of torture”. While he may feel that his point is important and the truth, it is a rookie mistake to hand enemies validation like this. He also tried to have it both ways with Iraq, claiming we’re better off without Saddam but essentially condemning the action that made that possible. Again, he probably thought that was an important point, but all it does is validate the other side’s talking (and recruiting) points.

Obama claims this speech establishes a framework for a new era of cooperation with the Islamic world. And, of course, that mostly has the US doing the giving and the “Islamic world” doing the taking. What that means, in real terms, about establishing a new era of cooperation with the nations of Islam, remains to be seen. But given what was outlined, it seems to pretty much be business as usual wrapped up in an eloquent rhetorical wrapper marked “new and improved”.

Anyway, just a few thoughts. You should take the time to read the speech. But, as I implied earlier, Obama is outstanding at talking the talk. Walking the walk, on the other hand, hasn’t yet proven to be his strong suit.

~McQ

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