Sunday, 26 February 2012

Which Arab Season?

When the founding fathers of America  brought forth a new nation, conceived in liberty, and dedicated to the proposition that all men are created equal they changed the world forever. Many believed that such a country could not long endure, that such a nation was neither possible,plausible or permissible. How wrong they were.

"Conceived in liberty" that men might own themselves, be their own masters was a shattering blow whose effects are still rattling dictators & enslavers.

 "The proposition that all men are created equal" gave each a stake in a nation of free men, a radical idea that would make men and women from all over the world patriotic citizen's.

That noble experiment in liberty worked, worked beyond the dreams of those founding fathers. America became a magnet for millions & a beacon of hope in some of the darkest days of humanity. Freedom made America rich & and those countries who followed that template of economic freedom also found prosperity.

 When vile men slaughtered the innocent on 9/11 in the name of Islam America & American's showed the tolerance of liberty: how many countries would see their people react so well? We mourned in Ireland, 3/4 of the first responders that died were Irish or of Irish descent. What is less well known is that the attacks left 30 Muslim children orphaned. America's strength from her founding principles was her ability to bind people from all faiths & countries as one free people. Osama Bin laden could kill civilians & knock the towers but he could not change that & the Armageddon of Islam versus the West was a creature of his perverted mind.

This is not to say that America was perfect, slavery darkens the past but the nation paid in blood, nor that those freedoms that made America great & rich are not being now radically undermined, but it is worth reminding ourselves of why & how the United States inspires.

In kleptocracies in North Africa, countries where business cannot be done without bribing some government official, where the army picks off the best business opportunities & the presidential family amasses billions that radical message of liberty is inspiring again. 

It is not Islamacists nor some terrorist factions that are behind the Arab Spring. That season is the child of ordinary freedom loving men & women, men created equal with us in their desire to live free,decent lives. They are inspired, not by Che Guevara or Lenin but by Steve Jobs & Larry Page. This is a capitalist revolution, much more Tea Party than Occupy Wall St.  

They may yet be betrayed as the partially have been in Egypt with the army retaining control. They may yet fail, as in Syria where the price of their failure will be slaughter, barbaric torture & even worse repression. As I write 100,000 civilians in Homs are cold, hungry & being slaughtered by Russian artillery. Sadly Israel, the one country that could stop the slaughter of Homs cannot intervene.

Powerful elites & kleptocrats do not give up their privileges easily & even if the protesters do succeed with free elections, the best organised & funded political parties in all these countries will be the Muslim brotherhood or its equivalent. That is a call to all free nations' civil society, not an excuse to repress.

I have seen it argued that America should have helped crush the movement in Egypt, for Israel's sake. That would have been a terrible betrayal of the founders, of the very idea of nation, conceived in liberty, and dedicated to the proposition that all men are created equal. If Israel can only be kept safe by keeping the people of Egypt in slavery then Israel  will never be safe. America has always been a friend to freedom: that policy has made the world a freer, safer place and made every free nation America's ally. Repression not only would betray Americas most profound ideals but would store up hatred & resentment for centuries.  

I have talked to men and women involved in the struggle to own themselves as free people in countries not run to enrich an elite. They want the right to work, open businesses & get on with their lives. For this, like the men of Valley Forge, they are willing to die. Many already have. Does it matter that they are Muslim? That they follow a different faith than I? 

When the riots in the British cities were at there height last summer 21 year old Muslim,, Haroon Jahan was one of three men murdered. Hours after holding his son as he died on the street his father Tariq Jahan was appealing for calm, for no further deaths or revenge attacks. On the worst night of his life Tariq's faith inspired him to save other families the grief he was enduring.  He succeeded & prevented a certain race riot breaking out in Birmingham.

As in Scott Fitzgerald said, the fundamental decencies of life are unequally divided. Just as the creeps from Westboro find justification in the Bible for picketing the funerals of fallen heroes, bad men will find justification for terror in the Koran. It may even be there but the men & women that that protest & hope for a better future are not those men. It would be Osama Bin-laden's greatest victory & a posthumous revenge if he succeeded blinding us to that.

ECB grennmailing Ireland- A La Kermit

What do you have if you hold a green ball in one hand and a green ball in the other hand? The bawdy riddle, current the last time the Muppets were in the cinema brings to mind the European Central Bank , the ignored institution in the story of Ireland's financial crash.

The answer was Kermit the Frog's undivided attention & the ECB has not just the Irish Government's undivided attention but near total control over that Government. The green balls are the short term funds of the Irish banks. Without this funding none of the still existing Irish banks could function. Troubled banks are forced to rely on one of their main destroyers for funding lifeline.

The ECB is a Franco-German institution: describing it a "European" despite the fact it now has a token Italian , albeit a fairly brilliant token Italian, as its head, is a lie. Draghi was appointed because the Germans had lost their candidate & the French just had their turn, in the person of the startlingly incompetent Trichet. The French, in the kind of corrupt back-room deal in which they specialise, still got one up by having the Italian on the six person board to resign to make way for a French candidate: it is hardly likely he brings as little to the party as Trichet but one is not sanguine.

The ECB has used our Kermit The Frog position stifle any official criticism of it's own role in the disaster & to ensure our government does not break ranks on debt payback, both to bondholders & to the moneypit that is the ELA. This is blackmail.

Under the Maastricht treaty the ECB has a duty of to ensure the stability of banks in the Eurozone. Trichet ignored this to the point of deliberate negligence.

Short-term paper (bonds) are heroin to banks, providing funds that need to be repaid in relatively short order. Commit to much of those funds to loans & a bank is dependent on rolling the bonds over rather than repaying them. That is financial addiction: cold turkey of a bond market withdrawal leads to disastrous results.

Irish banks were allowed create just such an addiction trap between 1999 & 2007: the first 8 years of the Euro. As low interest rates encouraged more borrowers & property asset prices increased, the amount of collateral and loans increased, the vicious circle meant that deposits could not fund loans. (Some of those deposits were themselves the direct result of loans: fractional reserve banking is magic)

This growth in lending out paced the ability of deposits to fund it so the banks were relying more & more on short term Eurobonds. The Euro had gotten the banks over the exchange rate issues of borrowing abroad.

Lending grew from €120b in 2000 to €400b in 2006 and by 2006 Eurobonds accounted for €129b of the funding for that credit. Why was the ECB NOT warning the Irish Government about this massive inflow of credit? Why were no steps taken to to regulate this Amazon of euro's flowing into Irish banks. Did a compound annual growth of over 28% in lending in the final 3 years of the boom not ring alarm bells in Frankfurt?

If the answer is No, then Trichet was a fool, if yes, a knave. Either way the collapse of the Irish banks happened due to ECB negligence and we need to make this very clear to Europe. Then we need to stop paying the ELA debt to our own Central Bank.

We can compromise on that, we are a reasonable people. We will pay the money in, but instead of electronically burning it, the Central Bank will credit the government with the funds. We still pay our debt, but costlessly to ourselves, not to as a holocaust to the German Gods of Moral Hazard & Hard Money.

Perhaps it is time to consider what charges might be brought against Mr Trichet for his dereliction of duty. An arrest warrant might concentrate minds.


The Koch brothers are oil billionaires regularly attacked by the left in America for donating to free-market & conservative think-tanks. Shamelessly the Obama election campaign has cranked up those attacks. This letter, a response to that demonisation, is both a wonderfully elegant riposte & a clear defence of a free society. I got it on the web & think it is worth keeping.

Mr. Jim Messina
Campaign Manager
Obama for America

Dear Mr. Messina:

Because every American has the right to take part in the public discourse on matters that affect the future of our country, I feel compelled to respond directly about a fundraising letter you sent out on February 24 denouncing Koch. It is both surprising and disappointing that the President would allow his re-election team to send such an irresponsible and misleading letter to his supporters.

For example, it is false that our “business model is to make millions by jacking up prices at the pump.” Our business vision begins and ends with value creation — real, long-term value for customers and for society. We own no gasoline stations and the part of our business you allude to, oil and gas refining, actually lowers the price of gasoline by increasing supply. Either you simply misunderstand the way commodities markets work or you are misleading your supporters and the rest of the American people.

Contrary to your assertion that we have “committed $200 million to try to destroy President Obama,” we have stated publicly and repeatedly since last November that we have never made any such claim or pledge. It is hard to imagine that the campaign is unaware of our publicly stated position on that point. Similarly, Americans for Prosperity is not simply “funded by the Koch brothers,” as you state — rather it has tens of thousands of members and contributors from across the country and from all walks of life. Further, our opposition to this President’s policies is not based on partisan politics but on principles. Charles Koch and David Koch have been outspoken advocates of the free-market for over 50 years and they have consistently opposed policies that frustrate or subvert free markets, regardless of whether a Democrat or a Republican was President.

If the President’s campaign has some principled disagreement with the arguments we are making publicly about the staggering debt the President and previous administrations have imposed on the country, the regulations that are stifling business growth and innovation, the increasing intrusion of government into nearly every aspect of American life, we would be eager to hear them. But it is an abuse of the President’s position and does a disservice to our nation for the President and his campaign to criticize private citizens simply for the act of engaging in their constitutional right of free speech about important matters of public policy. The implication in that sort of attack is obvious: dare to criticize the President’s policies and you will be singled out and personally maligned by the President and his campaign in an effort to chill free speech and squelch dissent.

This is not the first time that the President and his Administration have engaged in this sort of disturbing behavior. As far back as August, 2010, Austan Goolsbee, then the President’s chief economic advisor, made public comments concerning Koch’s tax status and falsely stated that the company did not pay income tax, which triggered a federal investigation into Mr. Goolsbee’s conduct that potentially implicated federal law against improper disclosure of taxpayer information. Last June, your colleagues sent fundraising letters disparaging us as “plotting oil men” bent on “misleading people” with “disinformation” in order to “smear” the President’s record. Those accusations were baseless and were made at the very same time the president was publicly calling for a more “civil conversation” in the country.

It is understandable that the President and his campaign may be “tired of hearing” that many Americans would rather not see the president re-elected. However, the inference is that you would prefer that citizens who disagree with the President and his policies refrain from voicing their own viewpoint.Clearly, that’s not the way a free society should operate.

We agree with the President that civil discourse is an American strength. That is why it is troubling to see a national political campaign apparently target individual citizens and private companies for some perceived political advantage. I also hope the President will reflect on how the approach the campaign is using is at odds with our national values and the constitutional right to free speech.

Philip Ellender
President, Government & Public Affairs
Koch Companies Public Sector, LLC

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