Monday, March 02, 2009

U.S. Boycotts Durban 2 Conference, Citing bias against Israel

It looks like Obama et al. are beginning to "get it"

The Obama administration decided to boycott a U.N. conference against racism in April because the final communiqu, will condemn Israel, the State Department said Friday. The U.S. also objected to a strong statement in the document favoring reparations for slavery. "We don't look at the text as salvageable," a U.S. official said. Washington stands ready to re-engage with the conference if the passage on slavery is removed and if reference to any one country or any single conflict is dropped, the official said in a clear reference to Israel and the Middle East.

The event in Geneva is a follow-up to the 2001 conference in Durban, South Africa, that was itself mired in controversy. The Bush administration also didn't participate because the communique branded Zionism as racism.

President George W. Bush left it up to President Barack Obama to decide about the so-called Durban II conference. The new administration sent a negotiating team to Geneva on Tuesday to try to influence the language of the document. That decision alone drew criticism. On Friday, the State Department said it had had enough and withdrew. "The document grew from bad to worse," the U.S. official said.

The decision to take part in the preparatory phase was initially praised by the Organization for the Islamic Conference, whose secretary-general said it was "widely perceived by the Muslim world as a credible signal of the new administration's goodwill." The preparatory committee was chaired by Libya with Iran and Cuba as vice chairs.

The U.S. also objected to language against defaming religions because it could limit free speech, the official said. The White House informed Jewish leaders in a conference call Friday morning of its decision. Canada and Israel had already pulled out. Israel had urged that the U.S. do the same.


Films that rewrite history

In the West, we tend to assume that the greatest threats to democracy and liberty come from outside. We think of the totalitarian systems of the last century or fundamentalist terrorism today, but we fail to recognise the viral strain that has developed out of our own entertainment industries.

Over the past dozen or so years, television and movie-makers have managed to blur the border between fact and fiction to an unprecedented degree. They pretend increasingly that their film is based on a true story. Every device possible, from computer-generated imagery to place names and dates thrown onto the screen seek to suspend the disbelief of historically illiterate audiences. Alarmingly, the new technology has coincided with a dramatic growth in conspiracy theories.

The author Damian Thompson has labelled the phenomenon "counterknowledge". This includes the propagation of totally false legends. They may well stem from a completely unbalanced person who genuinely believes in a conspiracy - usually a government one - and who, through the internet, makes it sound plausible to tens of thousands, even to millions of others who also have grievances and are eager to believe the worst. This is done by seizing upon one or two minor discrepancies in a government report, then joining up all the wrong dots to create a monstrous fable that runs completely counter to the facts.

Examples of counterknowledge include the notion that Aids was created in a CIA laboratory, that Princess Diana was murdered by the Secret Intelligence Service, and that the 9/11 attack on New York was orchestrated by the Bush administration. The dramatic decline of traditional moderate forms of religion has resulted in a spiritual void and thus a desperate need to believe intensely in something. This has accompanied the "Wikipedia age". A populist notion has developed that any individual has the right to correct or change the truth according to their own beliefs. It is, of course, the democratic ideal taken to its most grotesque extreme. But in reality it is the opposite of democratic. It is the easiest way for the demagogue to exploit gullibility and ignorance.

The home-produced movie Loose Change takes the ultimate conspiracy-theory approach to 9/11. It is now said to have been seen by more than 100m people on the internet. A few weeks ago, a leading Russian TV channel broadcast Loose Change to mark the anniversary of 9/11. The film was accepted as completely true by the presenters and the studio audience, who debated it in a three-hour prime-time programme.

Studies of internet sites reveal an unholy alliance between left-wing 9/11 conspiracy theorists, right-wing Holocaust deniers and Islamic fundamentalists. Many Muslims throughout the world now believe that no Arabs were involved in 9/11. Significantly, Islamic websites have also been learning from American creationists and have eagerly embraced their theory of intelligent design, which attributes the origin of life to a higher power and opposes theories of natural selection.

In a post-literate society where the image is king, the scope for mischief is almost without limit. I suspect that it will not be long before we see a Holocaust-denial movie. It could take the form of a Da Vinci Code-style thriller, and be packaged as straightforward entertainment.

The commercial potential for such a project is huge, above all in the Middle and Far East. If it were banned under Holocaust-denial legislation in some European countries, this would only convince conspiracy theorists that the Holocaust is a Zionist exaggeration or even invention. Already in British schools, many teachers have stopped mentioning the Holocaust to avoid offending Muslim students. This is because, according to one survey, only 29% of Muslims in Britain accept that the Holocaust took place as western history books describe it.

Political correctness is so easy to exploit. Universities in the United States, supposedly the guardians of intellectual rigour and scientific proof, have been cowed into accepting courses that clearly reject normal standards of evidence. This is perhaps the logical extreme of the anti-hierarchical revolution begun in the 1960s and now taken to a ridiculous and dangerous degree.

It may sound alarmist when one talks of these attempts to fragment proven reality. Yet the effects of counterknowledge and pseudo-history might develop a bigger threat to liberal democracy than the authoritarian onslaughts of Stalin and Hitler. This new insidious power to produce intellectual and scientific chaos is easy to underestimate.

It should be the duty of not just every scientist and historian, but also of every writer, publisher, movie-maker, TV producer and ordinary citizen to fight all attempts to exploit the ignorance and gullibility of audiences. Today's silly conspiracy theory in the West can easily become tomorrow's article of faith in the world at large. Quite simply, we play with facts at our peril. From selling fiction as truth in movies to peddling the big lies of counter-knowledge is not such a very big step after all.


Digging Out of Government's Hole

by Martin Hutchinson

The $787 billion stimulus bill has been signed by President Obama and the $275 billion help for homeowners has been announced and generally well received, but still the stock markets keep dropping. Worldwide, daily new plans for stimulus and rescue are met with daily declines in stock prices and gloomy economic figures. There's a reason for this: the markets have figured out that the deepest economic hole out of which the global economy will need to climb is the one that the world's governments have dug.

The relationship between public sector stimulus packages and output is fairly simple, but it is non-linear and Maynard Keynes was no mathematician. It basically appears to depend on four factors: 1. The share of public spending in GDP; 2. The public sector deficit as a percentage of GDP; 3. The composition of the stimulus package itself - its split between tax cuts, "digging holes and filling them in" unproductive spending and "TVA/Interstate highways" productive spending; and 4. The level of slack in the economy.

U.S. deficit spending during the Great Depression was thus fairly productive. The share of public spending in GDP was low, so increasing it did not greatly impact the private sector. The public sector deficit was low, so the spending was easily financed, without too much "crowding out" of private sector needs. At least some of the spending, the Tennessee Valley Authority, was productive. And the level of slack in the economy in 1933-40 was enormous. Thus if Keynesian stimulus was ever going to work, it should have worked then.

In reality, it didn't work all that well; unemployment remained above 10% until the United States entered World War II in 1941. Part of that failure was due to foolish non-Keynesian policies that dragged the economy down - the Glass-Steagall Act (which de-capitalized investment banks, thus almost closing the capital markets to new issues) and the NRA and unionization policies which raised prices and wages above market levels. Herbert Hoover's 1932 tax increase, the Smoot-Hawley Tariff Act of 1930 and the introduction of Social Security (heavily cash-flow-negative to taxpayers in its early years) also weakened the economy, as did unduly restrictive monetary policy in 1930-33. Conversely, the introduction of bank deposit insurance strengthened it.

Still, even in the Great Depression, the Keynesian case is a difficult one to make, judging by results alone. After all Britain, managed economically by the anti-Keynesian Neville Chamberlain, cut back public spending and emerged from the depression much more quickly and successfully than the United States.

Much though President Obama may not wish to admit it, his stimulus plans are not original. In 2001-02, a combination of a tax cut of 2% of GDP and spending increases of another 4% of GDP (partly the War on Terror, partly the No Child Left Behind Act and partly cyclical) provided fiscal stimulus of about 6% of GDP between the fiscal years (ending in September) 2001 and 2002. Monetary policy was also exceptionally stimulative, with short-term interest rates declining from 6% to 1% within a two-year period while inflation remained positive.

Judging by results, the George W. Bush stimulus worked rather better than the New Deal. It was begun from a position of fiscal surplus, lessening the strain placed on the debt markets by its borrowing, while inflation during the period was suppressed by the deflationary effects of globalization and the Internet. However, it distorted the economy, leading to an undue concentration in the unproductive sectors of housing and speculative finance, while manufacturing and much of the high-skill service sector was outsourced to Asia. Notoriously, the subsequent expansion led to very meager gains in living standards, except for the very rich, while inflation crept up and the federal budget deficit remained in substantial deficit, even at the top of the 2002-07 expansion.

This time around, the conditions for stimulus were much less propitious than in either the Great Depression or 2001-02. Public spending, including state and local spending, was far higher as a percentage of GDP than in the 1930s. In Europe, particularly Scandinavia and in Japan since 1990, we have seen the adverse effect on growth exerted by high public spending. The increase in global public spending through stimulus plans is thus likely to be substantially growth-destroying in its own right.

Second, an exceptionally large stimulus (including bank and mortgage bailouts) has been combined with a public sector deficit that was already excessive to produce a likely federal budget deficit in fiscal 2009 and 2010 of more than 10% of GDP in each year. The difficulties of financing these deficits will unquestionably be very serious, and the adverse effect on the U.S. Treasury's ability to borrow resulting from their probable persistence will be equally severe. Outside the United States, Britain and Japan are notable among other countries that were already in a difficult fiscal position before the downturn hit, and will be in impossible positions as a result of their misguided stimuli.

Third, the Obama stimulus package, having been largely dictated by Senate majority leader Harry Reid (D-Nev.) and House speaker Nancy Pelosi (D-Calif.) consists largely of short-term state budget palliatives or handouts to favored constituencies, with very little TVA-type long-term beneficial spending.

Even in areas where true economic benefits might be expected, such as the $8 billion subsidy to high speed rail, the package has not been designed to favor rail projects in the country's main centers of population and economic activity, which could hugely benefit from their rail systems being brought up to current international norms. Instead, it favors the utterly frivolous project to run a maglev train, the most expensive and least tested technology available, to the isolated casino result of Las Vegas. Politically, that project may be very attractive to Reid, but it is economically almost worthless because of Las Vegas' geographic isolation. It would also be socially highly damaging, forcing the destructive forces of gambling even more deeply into the fabric of American society.

Finally, at the time stimulus began with the bank bailouts last October, there was very little slack in the U.S. economy, with unemployment only around 6%, the Dow Jones Industrial Average at bubble levels over 10,000, house prices still sharply overvalued and the U.S. savings rate still disgracefully moored at around zero. To re-stabilize the economy after its years of imbalance, the savings rate needed to be brought back to its historical level of around 8%, or rather more to make up for the years of nil saving, while the U.S. balance of payments deficit also needed to decline by 5% to 6% of GDP. In such circumstances, injecting yet more wasteful spending into the economy was a wholly perverse approach to the problem.

Going forward, we are now presented with an annual fiscal deficit of 10% of GDP that will be very difficult to finance or to eradicate (and that's without taking account of further costs of any more bank bailouts that the erratic U.S. Treasury or the Federal Reserve may consider necessary.) President Obama's Fiscal Responsibility Summit will find significant cuts in public spending impossible, given the political orientation of the decision-makers and the expectations of their followers. The only approach that will appear feasible is thus one of massive tax increases, delayed sufficiently as to allow recovery from the recession before they take effect.

Substantial tax increases are already scheduled, with the December 2010 repeal of the Bush tax cuts. At less than $200 billion per annum, however, this repeal will go nowhere near far enough. To correct the budget imbalance, it will be necessary to schedule tax increases of at least 4% to 5% of GDP ($600 billion to $800 billion) unless public spending can be cut commensurately. Even those draconian increases would only bring the budget deficit down within historically precedented levels, rather than eliminating it altogether.

Not only will such tax increases have an appalling economic effect, they will also be very difficult to fit into Obama's political timetable. Tax increases that took effect in 2009 or 2010 would be disastrously counterproductive, reproducing almost precisely Hoover's blunder of 1932. However, massive tax increases that took effect in 2011 or 2012 would have an equally massive adverse effect on Obama's re-election chances, particularly if they caused even a minor relapse in the U.S. economy.

Hence, all but modest tax increases are likely to be delayed until 2013 or later, and the U.S. budget deficit is likely to remain at least well above 5% of GDP until then. That will increase U.S. public debt to around 100% of GDP by the 2012 election. It will also cause a massive increase in interest rates, which will doubtless be resisted to the utmost by the Ben Bernanke Fed. That, in turn, will cause a resurgence in inflation, probably at a speed and to a level that will make the late 1970s seem like child's play.

Already, the Producer and Consumer Price Indexes have continued increasing in January, demonstrating that the specter of deflation is no more than a Bernanke fantasy. Once inflation reappears in earnest, accompanied by higher interest rates caused by the excessive budget deficits, Bernanke will not rein in money supply immediately, as he currently claims he would; the unexpected (to him) resurgence in inflation will cause hysterical denial and delay in necessary tightening for at least a six to 12-month period.

The Bernanke problem can only be solved by replacing him when his 4-year term is up next January, but it is not clear whether Obama has either the understanding or the bottle to bring in a Paul Volcker clone to the Fed to do what is necessary.

Internationally, the stimulus expenditures of Japan and Britain are likely to prove equally damaging to those countries' recovery possibilities. Japan will have an election this year, from which an anti-stimulus opposition government may emerge; if so, it will face an uphill fiscal battle more strenuous than that facing Junichiro Koizumi in 2001. In Britain the election need not be held until June 2010, and even after it the feeble David Cameron and George Osborne team seems unlikely to provide much policy improvement.

It's already certain that 2009 will be a thoroughly unpleasant year, and many commentators are coming to realize that 2010 will not be much better. Thanks to stimulus, it now seems likely that 2011 and 2012 will also be years one would rather not experience and only in 2013 and after may some kind of feeble economic recovery emerge. Gee, thanks Maynard!


Mistresses can claim maintenance under new Australian laws

Sounds like converting all relationships into prostitution to me

CHEATING husbands will be open to divorce-style litigation from their mistresses under new laws. Mistresses can now claim income maintenance, property and even superannuation funds under the Family Law Amendment (De Facto Financial Matters and Other Measures), dubbed the "mistress laws", which were passed by the Senate last November and came into effect today (March 1).

The main objective is to remove same-sex discrimination from the Family Court system, but they have left the door open for a raft of de facto relationship claims.

The laws declare that de facto couples who satisfy basic criteria - such as being in the relationship for at least two years - will be treated in the Family Court in the same way as a married couple. It also applies to same-sex couples.

The laws will change the way property is divided by enabling the court to consider the "future needs" of partners, as it does for married couples.

Men or women who have a second relationship outside a marriage are now liable to legal action in the Family Court should the second partner decide he or she deserves income support or a share of assets. This is particularly the case if a child is involved.



Political correctness is most pervasive in universities and colleges but I rarely report the incidents concerned here as I have a separate blog for educational matters.

American "liberals" often deny being Leftists and say that they are very different from the Communist rulers of other countries. The only real difference, however, is how much power they have. In America, their power is limited by democracy. To see what they WOULD be like with more power, look at where they ARE already very powerful: in America's educational system -- particularly in the universities and colleges. They show there the same respect for free-speech and political diversity that Stalin did: None. So look to the colleges to see what the whole country would be like if "liberals" had their way. It would be a dictatorship.

For more postings from me, see TONGUE-TIED, GREENIE WATCH, EDUCATION WATCH INTERNATIONAL, FOOD & HEALTH SKEPTIC, GUN WATCH, SOCIALIZED MEDICINE, AUSTRALIAN POLITICS, DISSECTING LEFTISM, IMMIGRATION WATCH INTERNATIONAL and EYE ON BRITAIN. My Home Pages are here or here or here. Email me (John Ray) here. For readers in China or for times when is playing up, there is a mirror of this site here.


No comments: