The World & Beyond

The writings of a global transient.

Author: Gordon Haave (page 1 of 3)

The Best Heath Care In The World

Donald Trump has further angered the establishment right by saying that part of the problem with Republicans is opposition to National Health Care.

Trump Can Win“That’s part of the problem with the Republicans, somehow they got fed into this horrible position,” Trump said. “We’re going to take care of people.”

Im not writing to take sides on this issue one way or the other, but rather to at least make sure that people arent debating the issue under a false premise, as I used to when I listen to right-wing talk radio.

In the US there has been for the last 20 years a wide ranging argument over healthcare. The debate is completely warped by roughly half of the country believing that the US has The best health care in the world even if there are some issues, and perhaps costs are high.

I used to believe this in the 90s when I listened to Rush Limbaugh every day and read National Review.  Why? I had never rush_limbaugh
been to another country outside of first class vacations with my parents or once when I went to Montreal with my French class in 8th grade. I had no basis for believing this whatsoever, and yet I believed it. I wasnt alone.  Tens of million of Americans believe this without any evidence whatsoever.

For the record: It is not true. Its a massive, monstrous lie. I have used medical services in: Italy, Albania, Poland, Latvia, Kenya, Tanzania and Panama. It was better than the US everywhere except Albania where I had to bribe the nurse 100 dollars the night my daughter was born.

Kenya Doctors

In Kenya if you get sick you walk to the Pharmacy. Whos in the Pharmacy? A doctor. An African doctor? Yup. And guess what? Hes great. Hes spent the last 10 years treating sick people and had to do his first years out in the bush treating people 18 hours a day with horrific diseases. He exists to treat people who are sick, not to build a practice around convincing people to get back surgeries they dont need and over 50% of the time dont work so that he can bill their insurance 100K.

You walk in, you talk to him. He knows what you have. He treats sick people all day, 6 days a week, 12 hours a day or more. You dont fill out any paperwork or listen to the person in front of you complain that her copay is 25 when she thinks it should only be 20.

He gives you pills, you give him 10 dollars. Transaction complete.

And its not just for minor things. I had Malaria in Tanzania and the medical care was excellent.

In Latvia I cracked some ribs after riding a bike out to the Rumbula forest where 25,000 jews were massacred over a few days. (https://en.wikipedia.org/wiki/Rumbula_massacre).

I was in bad shape when I woke up the next day. So, I went to the doctor. Now, it turns out there isnt much you can do for cracked ribs anyway, but this is how the process went: I checked in. The lady behind the desk asked me what was wrong. I told her. I filled out one very small form. She told me it would be about an hour. I asked if I could go to lunch and come back. She said sure, take your time, you wont lose your place. So i went and had lunch and a couple of beers. I went back and walked right into the doctor. 40 euros.

In Italy once my Italian friend took me to the doctor. I didnt wait at all. After figuring out quickly that I needed antibiotics my friend and he discussed payment a bit before the doctor said Eh, dont worry about it.

I have become so disgusted with US healthcare that I worry about getting sick in the US. Last year on my way to Panama I started to feel sick and thought good thing Im leaving the US.

In the US how often do you listen to people worry about their health insurance? Its nearly constant. Yet I have never once NOT ONCE.. heard my friends overseas worry about their health care ever. Either they have national health insurance, or, there is a free market in health care and they can get health care at a reasonable price.

Yet, tens of millions of Americans believe this monstrous lie? Why? it fits in with the American exceptionalism that has been drilled into their heads.  Something I will be writing about more in another post.

Propaganda and the Military

As an add-on to yesterdays post about propaganda, I would like to drill down a bit on the use of propaganda and its relation to the U.S. military and the various wars it is constantly engaged in.

In the 1960s as the TV sets became ubiquitous in American homes and watching the evening news was a family affair, the military had yet to grasp just how influential the television could be in shaping public opinion about Military conflicts.

As a result, reporters were relatively free to report on battlefield conditions in Vietnam, air candid interviews with troops, and report what they wanted about the conflict. The result was pictures such as these:

Napalm girl Vietnam Execution

Both Presidents Johnson and Nixon were outraged that reporters would show images such as these. The Presidents believed that the media had an obligation to help America win the war, and if that meant lying about it then so be it.

An excellent 10-minute documentary highlights the beginning of this conflict, which started with Morely Safers report on August 5, 1965, following a Marine search and destroy machine which showed Marines burning peoples homes to the ground:

The medias free access to report on Vietnam brought Johnsons presidency to an end and ultimately forced the United States out of the war.

The White House and the Military learned from this lesson, and in 1983, they banned the press altogether for the first two days of the Grenada Operation.

Next up was the first Gulf War.

The 24-hour news coverage of it gave the impression of unprecedented press access to the war. The reality was the opposite. The Militarys policy on press reporting was spelled out in Annex Foxtrot which stated:

News media representatives will be escorted at all times. Repeat, at all times,

It also created press pools which the military supplied with its own information and video, and Annex Foxtrot also gave the military the power of prior restraint, which allowed it to censor press reports before they were released.

One might expect that the press would have complained. In my opinion, the press should have refused to cover the war at all, and instead, let military reporters provide information so that at least the public would know clearly where the information was coming from. However, that didnt happen.

Instead, the press presented the affair as an almost non-stop Hollywood action movie, complete with its heroes and villains, and made temporary stars out of many of the on-screen subjects. This was good for ratings, and that was more important than ethics.

In short, the world only got to see what the Military wanted it to see.

This standard of close to 100% Military control over news coverage has, in fact, gotten worse. Now the media helps to stage PR stunts for the government. The iconic video of Iraqis toppling the statue of Saddam Hussein was nothing more than a PR stunt, conducted by a small group of Iraqis, journalists, and Marines themselves.

Journalists on the ground cautioned their editors that it was a relatively minor event, only to be admonished by his editor that he, the journalist, was in the wrong for not seeing the importance of it.

A 3 minute summary of the event is here:

The major media, along with the government, blew the event up into a major story of historical significance. Time has proved that to be wrong, as it turns out the Iraqis werent as excited to have us invade their country as the government and media had us believe.

The lesson in all of this is that since Vietnam the press has become a propaganda arm of the United States Military and that one should believe literally nothing that is said by the major media on military or foreign policy affairs.

This will become as clear as can be if one examines our relationship with Iran, which will be the subject of my post tomorrow.

Americans Are Inundated With Propaganda and Dont Know It

As an add-on to yesterdays post about propaganda, I would like to drill down a bit on the use of propaganda and its relation to the U.S. military and the various wars it is constantly engaged in.

In the 1960s as the TV sets became ubiquitous in American homes and watching the evening news was a family affair, the military had yet to grasp just how influential the television could be in shaping public opinion about Military conflicts.

As a result, reporters were relatively free to report on battlefield conditions in Vietnam, air candid interviews with troops, and report what they wanted about the conflict.  The result was pictures such as these:

 

Napalm girl Vietnam Execution

 

 

 

 

 

 

Both Presidents Johnson and Nixon were outraged that reporters would show images such as these.  The Presidents believed that the media had an obligation to help America win the war, and if that meant lying about it then so be it.

An excellent 10-minute documentary highlights the beginning of this conflict, which started with Morely Safers report on August 5, 1965, following a Marine search and destroy machine which showed Marines burning peoples homes to the ground:

The medias free access to report on Vietnam brought Johnsons presidency to an end and ultimately forced the United States out of the war.

The White House and the Military learned from this lesson, and in 1983, they banned the press altogether for the first two days of the Grenada Operation.

Next up was the first Gulf War.

The 24-hour news coverage of it gave the impression of unprecedented press access to the war.  The reality was the opposite.  The Militarys policy on press reporting was spelled out in Annex Foxtrot which stated:

News media representatives will be escorted at all times. Repeat, at all times,

It also created press pools which the military supplied with its own information and video, and Annex Foxtrot also gave the military the power of prior restraint, which allowed it to censor press reports before they were released.

One might expect that the press would have complained.  In my opinion, the press should have refused to cover the war at all, and instead, let military reporters provide information so that at least the public would know clearly where the information was coming from.  However, that didnt happen.

Instead, the press presented the affair as an almost non-stop Hollywood action movie, complete with its heroes and villains, and made temporary stars out of many of the on-screen subjects.  This was good for ratings, and that was more important than ethics.

In short, the world only got to see what the Military wanted it to see.

This standard of close to 100% Military control over news coverage has, in fact, gotten worse.  Now the media helps to stage PR stunts for the government.  The iconic video of Iraqis toppling the statue of Saddam Hussein was nothing more than a PR stunt, conducted by a small group of Iraqis, journalists, and Marines themselves.

Journalists on the ground cautioned their editors that it was a relatively minor event, only to be admonished by his editor that he, the journalist, was in the wrong for not seeing the importance of it.

A 3 minute summary of the event is here:

 

The major media, along with the government, blew the event up into a major story of historical significance.  Time has proved that to be wrong, as it turns out the Iraqis werent as excited to have us invade their country as the government and media had us believe.

The lesson in all of this is that since Vietnam the press has become a propaganda arm of the United States Military and that one should believe literally nothing that is said by the major media on military or foreign policy affairs.

This will become as clear as can be if one examines our relationship with Iran, which will be the subject of my post tomorrow.

Getting rid of your phone

A lot has been written about people becoming slaves to their Smartphones.  That was (and perhaps still is) the case with me. Previously I saw the phone as a liberator because the phone and the computer allowed me to do what I do, which has included vastly simplifying my life in all regards but still being able to run my business.

Well, having simplified almost everything else, my main problem was this damn phone I am checking every 30 seconds.

I had started trying to set limits for myself around 3 months ago. Limit 1 was simply not to use it in the car whatsoever. Limit 2 was turning it off at 9pm and not turning it on in the morning until I showered and made my coffee.

iphone-iphone5-colors

 

Some of these things caused issues because people were used to me answering them promptly, but people started getting used to it.

Prior to the current month-long trip to Panama, Anguilla, and then back to Panama that i am on, my I-phone was on the fritz and I figured it didnt have too long to live. I mentioned this to my ex-wife a month ago and she said she has a near brand-new I-Phone 5 that she got when her step-dad died and I could have it.

Its a big process getting an I-Phone unattached from an apple account, including having the executor of the state prove his credentials, etc.

So, I left off to Panama with my I-Phone and this backup Iphone that still wasnt usable.

On the first week of my trip my I-Phone went dead for good. I was in Panama City at the time.  My first thought was f*ck, I am going to have to buy a phone tomorrow.  My second thought was Eh, I will wait until I am in St. Martin on Sunday, they will be cheaper there, then on the plane I thought Eh, I will just do nothing about it for now, and call Apple on monday.

Its now been two weeks and I still dont have a working phone.  It turns out that Apple really, really wants you to buy a new I-phone, as I am still getting the run around even though I, and the executor of the estate have both jumped through all of the hoops that Apple has asked us to jump through.

A big part of me, however, doesnt really want to get a new phone.  I am perfectly happy without one.

The first day in Panama without a phone went like this:

I was making plans with friends. Most people outside the US communicate on whatsapp, which now I didnt have.

So, I just emailed one guy in the group and said just email me back when and where to be, I dont care what we do really.

I got a response back an hour later and that was the extent of my planning

instead of the usual messaging between 3-4 different people and the endless Im here, where are you?  messages.

On Sunday my plane to St. Martin was late, so I missed my ferry to Anguilla and had no way of telling the lady who was going to pick me up at the ferry (the free wifi at the SXM airport never works). I also didnt have any minutes on my Anguilla phone (just a cheap piece of junk).

At first I panicked a bit.  Suddenly I had a problem because I did not have a phone, but in the end I just walked 100 yards to a place with wifi and sent her a skype message.

In any event, I have been totally happy without a phone.   I do have a google voice number so I can make and receive calls over my laptop.  Also, anyone who really needs to get in touch with me can do so by skype, email, or Facebook.  However, it sure feels great not being distracted by constant text and whatsapp messages.

I will of course have to get another cell phone.  I would prefer if Apple would just unlock this perfectly good one that I have, but I have a feeling that they wont.  In that case, I am certainly not going to buy an I-Phone, just so I dont reward Apples behavior.

I have a client who has never owned a smartphone.  When I first met him 2.5 years ago I was incredulous that this tech-savvy guy didnt have one, but I am starting to come around to his way of thinking and perhaps I will go that route.

I want you to turn off cellphone

If I do eventually get this I-Phone activated I will learn how to implement the features that only allow calls and texts from select numbers for much of the day.  Maybe Ill allow an hour of texts in the morning, and another in the afternoon.

 

Otherwise, I am enjoying the peace and quiet and the increase in my productivity from not having a phone.

I highly suggest that everyone try turning their phones off Friday afternoon and not turning them back on until Monday morning.  I guarantee that you will enjoy it.

In Defense of An Asshole, the Case of Martin Shkreli

(I understand that Shkreli has announced that he will reduce the price but has not said what the new price will be. Thus is no matter. This analysis stands whether the price is $100 or $750 per pill)

The vilification of Martin Shkreli, who the Internet has dubbed “The World’s Biggest Asshole”, raises a number of interesting issues.

Questions:

  1. What is the proper price for the drug Daraprim?
  2. Why was it selling for far less very recently?
  3. Is Shkreli, in fact, an asshole?
  4. Who is more moral, Shkreli or the Internet Masses?

Answers:

  1. Roughly $750 per pill.
  2. Because the previous owners were more concerned about their reputations than Shkreli is.
  3. Yes, he is, that is why he was able to realize the revenue maximizing price.
  4. Shkreli

 

Martin Shkreli

Let’s examine the issue:

 

Daraprim (despite being called an HIV drug in the media) is a drug that treats toxoplasmosis, which is caused by a T. Gondii infection. Some of these patients are sickened because their immune system is weak from HIV.

 

Gondii hospitalizes approximately 9,000 people in the U.S. per year. It kills about 700 of those 9,000. It is preventable as long as you wash your hands after exposure to cat excrement. It is also important to properly prepare your food.

Congenital Toxoplasmosis effects about 3 per 100,000 live births.

Turing (Shkrelis Company)  has stated that at $13.50 per pill revenues are about $5 million per year. $5 million/ $13.50 = ~370,000 pills produced per year. At roughly 9,000 patients hospitalized per year, that equals 41 pills per patient.

What’s the right price for these pills?

cat poop

For many years Glaxo sold them for $1 per pill. Glaxo sold the rights to Core Pharma in 2010. Core Pharma over a few years raised the price up to $13.50. Core than sold to Turing, which raised the price to $750 per pill.

 

So, in a relatively short period the price went from $1 per pill to $750 per pill.

 

Why is that?

 

From the drug marketer’s point of view, there is a pricing sweet spot that maximizes revenue. The payors (mostly insurance companies, and various government programs) do a cost benefit analysis on treatments to decide which treatments they are going to cover. The analysis can be complicated, but for the purposes of this article it comes down to “is it cheaper for us to pay for this treatment, or to pay for an alternate treatment and/or the side effects of not treating at all?”

Ideally a drug marketer would price his drug at the perfect price where it is just high enough that the payors are willing to cover that price.

What is the ideal price point for Turing? I sure don’t know, but I do know this: Shkreli has done this before, and backed with $90 million of venture capital money has surely done the most in-depth analysis of the matter, considering all the many variable involved.

So, in answer to question 1, the revenue-maximizing price is $750. From the standpoint of the business owner, that is what the price “should” be.

gsk logo

If that is the case, why didn’t Glaxo or Core raise the price that high? Were Glaxo analyst’s idiots who could not figure out that the sweet spot was well over $1 per pill?

Were Core Pharmaceuticals analysts slightly better than Glaxo analysts, raising prices from $1 to $13.50 but not realizing that it could have been raised to $750?

When analyzing the price to sell Daraprim at that analysis must take into

account not just the potential revenues but also the liabilities. As this case has proven there is a downside to sharply raising drug prices, namely, the wrath of the public and politicians.

In this case it is not a surprise that the price that the three companies were willing to sell Daraprim at is inversely proportional to their size.  Glaxo is a massive company that carefully navigates public opinion and the halls of Washington to maximize its profits, which includes doing things that make it look bad to the public for little or not gain. Core Pharma is a smaller company.  I cant find the financials at the moment (appears to be private), but it is far smaller than Glaxo, although it has a few big drugs such as Adderall.  Core was willing to take some reputational risk as an expanding company that needed the revenues, but again not wanting to bring the wrath of Washington or the public down upon it.

So just who exactly could wring the last cent of value out of Daraprim?  Why, none other than the internets Asshole of the Year, Martin Shkreli, who has shown over the years that he is not concerned in the least about his reputation.  And besides, for a company his size the money to be made here is such that even if forced out of business after a few years he would retire a very wealthy man.

So, in essence, (and in answer to question 3) all of this happened because Martin Shkreli is an asshole, and doesnt care if the public hates him.

Having settled that Shkreli is an asshole, does that make him more or less moral than the Internet masses?

Let’s examine this for a moment.

We have already determined that the best guess for the revenue-maximizing price for the drug is $750 per pill. The Internet masses insist that the drug should be sold for $13.50. That is, society wants Turing to bear a loss of 736.50 per pill.

There are three groups of people who can possibly bear this cost.

  1. The payors (most of them huge insurance companies or government medical care).
  2. The marketing, Shkreli
  3. Society at large.

Morality is of course subjective, but I see no reason why it is more moral for society to demand that Shkreli bear this cost while not demanding that the payors bear some of it, and, more importantly, for outraged individuals not being willing to bear some of it themselves.

Further, let’s not forget that Core Pharmaceuticals could very well have kept marketing this drug at 13.50 per pill as a sleepy little operation, but decided to cash in instead, knowing full well what Turing was going to do. The same goes for Glaxo when it decided to sell to Core.

I for one could not have done what Shkreli did, but I am also not demanding that anyone else pay to alleviate my outrage.

Solutions: This entire episode is already grist for more government regulation. However, if society is as outraged as it claims then there are some fairly easy free-market solutions.

CoreRx-Pharmaceuticals1

There is no reason why the insurance companies, perhaps with the assistance of large charities, can’t band together to buy the marketing rights to out-of-patent rare drugs and market them at a more “normal” profit margin. The outraged of the Internet could also chip in as well, as could companies like Glaxo and Core.   Ehen they want to get rid of marketing an old drug such as this instead of selling out they could simply contribute it for free or at a reasonable price to such an organization.

 

Instead, expect to see the Pharmaceutical companies engage and rent seeking and look for government subsidies in order not to raise the prices on these drugs too much.

Turning a Liability into Authenticity: Why Trump Can Win

I think Trump can win.

Trump Can Win

Dont laugh.  Yes, a lot of  people think hes  a loudmouth and a jackass.   (Fun Fact:  I was his paperboy at his Greenwich mansion when I was 13-15).  However, I think Trump is shrewd and that he knows precisely what he is doing:

He is figuring out how to turn his biggest liability into an asset and he will emerge as the only candidate on the Republican side who is viewed as having any authenticity.

The common wisdom is that Trumps popularity is fleeting, and that he is simply tapping into the frustration that many voters have with a Washington that seems out of touch with the mainstream and is appearing more and more corrupt to the average American.

This is clearly showing up in the polls:

 

Trump Change Washington

 

However, the conventional wisdom is that Trump is not a serious candidate and that ultimately is just a distraction to the actual campaign.

I think that the conventional wisdom is wrong.  I believe that Trump is a serious candidate and even has a decent shot at winning.

First, lets discuss the political landscape that he is looking at:

What the people believe no longer matters and they are starting to wake up to that.    A recent academic study by two professors using over 20 years of data shows that Congress literally DOES NOT CARE what the people think.

They key quotes from the study:

 

Multivariate analysis indicates that economic elites and organised groups representing business interests have substantial independent impacts on US government policy, while average citizens and mass-based interest groups have little or no independent influence.

 

“The preferences of the average American appear to have only a minuscule, near-zero, statistically non-significant impact upon public policy.

 

Simply put:  Your opinion doesnt matter.

 

Lets say you want to change that.  You think you are going to have the ability to pick among 10+ Republican candidates for President and therefore have an impact.  There is just one problem:  They all believe the same things.  As Mark Cuban recently pointed out:

 

The Republican Party requires that all their presidential candidates conform to consensus, If you dont agree with every platform of the party, not only are you called a RINO, a Republican in Name Only. You are considered unelectable in primaries and become a source of scorn on Fox News. Thats a problem.

 

There is literally almost no difference between the candidates (excluding Trump) on almost any issue.  This is despite the fact that Republicans have widely divergent views on things such as immigration and the warfare state.  Whereas Rand Paul was thought to be a potential candidate who was against endless U.S military aggression, he has since largely sold out to the warfare state and thus also jettisoned his credibility as someone who might significantly reduce the size of government. The only ideological difference that I can see between any of the other candidates is that Chris Christie is the most ardent supporter of warrantless spying while Paul is its strongest critic.

In this backdrop a significant portion of the electorate has been looking dimly at the prospect of a Bush V. Clinton matchup.  With no clear front-runner on the Republican side many have joined the race, but I have yet to see any explanation about why a Walker V. Clinton or Rubio V. Clinton is a substantially different race than Bush V. Clinton, and the voters seem to agree with me.

To an outsider this smells like opportunity.  On the Democratic side Bernie Sanders jumped into the race and is polling far higher than the Washington Insiders could have ever thought possible.

On the Republican side we have Trump.

Lets say you are Trump and you want to tap into voter frustration and ride it all the way to the White House, but everyone thinks you are a jackass.

What do you do?

Do you start listing your policy preferences and hope that the electorate likes your policies better than any of the other 10+ candidates, while annoying ?  Of course not.  What if a new-to-the-campaign Trump led his campaign on a tax simplification platform?  Would anyone believe him any more than any of the other candidates? Of course not.  Almost every candidate on both sides of the aisle have talked about tax simplification since  Forbes ran in 1996.  It is a popular idea, yet nobody believes that politicians are serious about it any more and thus nobody thinks it is anything more than another campaign promise.

So what has Trump decided to do?

A.  Hes staked out one big issue (illegal immigration) the he knew would give him an immediate decent-sized base in the Republican Party.

B.  Hes tapped into the frustrations of the electorate with, among other things, his brilliant display pointing out how corrupt the current system is.  As reported in this article from firstlook.org:

 

“I was a businessman. I give to everybody. When they call, I give. And you know what? When I need something from them, two years later, three years later, I call them, and they are there for me.” He added, “And that’s a broken system.”

Repeatedly asked what he got in return for his donations, Trump said: “With Hillary Clinton, I said be at my wedding and she came to my wedding. You know why? She didn’t have a choice because I gave. I gave to a foundation that, frankly, that foundation is supposed to do good.”

The author of the article goes on to say Though it surely wasn’t his intention, Trump was illustrating the key problem with the current campaign finance system.  Except I believe that the author was wrong.  I think it was precisely Trumps intention to point out that everyone else up on the stage was in the business of essentially taking bribes while he of course was not.

A more normal candidate, having established himself as an outsider, might then go on to listing his policy preferences.  However, Trump instead went with:

C.  Amp up the dramatic jackassery to a whole new level.  Why did he do this?  Simply put, for authenticity.  He is, after all, viewed by many as a loud mouthed jackass and a loose cannon.  Instead of trying to deny that and going on the defensive about it he has instead used it as the center piece of his campaign.  Hes Trump.  Hes his own man.  If you vote for him you know what you are getting and nobody owns him.  Do you want to know what his real view is on a certain political issue?  Just ask him. Why would it be anything other than what he says it is?

Now, having established his authenticity, he will go on to step D and start laying out his policy proposals.

What will they be?  In addition to anti-illegal immigration, we already have some idea.

We know that he was against the Iraq War and the Drug War before holding those views was cool.  He further commented in a relatively un-noticed interview with British media that the Crimea was Europes Problem.

As quoted by a blogger from The Hill:

But why isnt Germany leading this one? Trump added. You know Germany is a very rich, very powerful nation. Why arent they dealing on it moreso? Everything’s the United States — were like the policeman of the world.

Indeed.  Why is this the United Statess problem?

As I hinted at earlier, it looks like Trump is going to make tax simplification a big part of his campaign.

No doubt all of the Republican candidates are for tax simplification.  However, if all of them get up on stage and say that it is a hallmark of their campaign, which will you believe?

Indeed, which would you believe on almost any issue?

Just Trump.

Trump also has another thing going for him.   He has made himself immune to gaffes.  When a normal candidate misspeaks during a debate or says something off-color by mistake, it drives the campaign reporting for days or weeks.  Not Trump.  Every time Trump says something offensive the public cares less and less.  After all, thats just who he is.

Time will tell if I am correct.  Perhaps it is a bad idea to bet against a Bush or a Clinton, but If I had to put money on someone else being the next President Id put it on Trump.

Stay tuned.  Ill be updating this thesis as the campaign continues.

Taki in good form

One of my favorite writers is Taki Theodoracopulous.  If you dont know his illustrious career as a columnist you can check in with reading some of his books.

Currently he writes for his own website, Takimag.

Takimag is a collection of eclectic writers.  Some are interesting, some are boring, all generally speak their mind in controversial ways.

I have neglected outing myself as a Taki fan due to some of his more controversial quotes.  However, he recently wrote the following:

I suppose there are some Albanians who are not criminals, but as yet I have not met any.

As my wife and daughter are both Albanian, I can now officially say that I (or my loved ones) have been targeted, giving my cover to out myself as a Taki fan.T

Flaming Howard Marks. Or, why write when you have nothing to say?

NOTE: I wrote this a few months ago but wasnt sure if I wanted to publish it. I decided to today. Yes, I know Howard Marks is one of the great investors of all time. That just makes his meaningless banter even worse.

As someone who enjoys putting my thoughts to paper every now and then I always strive to say something meaningful. Sometimes it is only meaningful to me and not to anybody else, but I try to avoid the temptation of striving to tell the world how smart I am without actually saying anything smart.

And why should I? After all, I am not a hedge fund manager. Around 20 years or so ago when I did work for a hedge fund it became trendy to try to get the quarterly investment letters from hedge fund managers to find out what the real smart guys are actually thinking.

As the internet proliferated and such letters started to be delivered by email it became de rigeur for hedge fund managers to write confidential letters to clients that are clearly targeted to the public as a whole. A case in point is the following letter from Howard Marks of Oaktree. Lets address it line by line:

I want to provide a memo on this topic before I – and hopefully many of my readers – head out for yearend holidays. I’ll be writing not with regard to the right price for oil – about which I certainly have no unique insight

All good investment letters start out with the obligatory humble remark that the author is just another guy with no particular insights.

but rather, as indicated by the title, about what we can learn from recent experience.

Let me guess, sometimes asset prices move in ways that are not largely anticipated?

Despite my protestations that I don’t know any more than others about future macro events – and thus that my opinions on the macro are unlikely to help anyone achieve above average performance – people insist on asking me about the future

Ahh, nice, a second humble remark followed by just how smart everyone thinks he really is and so he will oblige us with his insights.

Over the last eighteen months (since Ben Bernanke’s initial mention that we were likely to see some “tapering” of bond buying), most of the macro questions I’ve gotten have been about whether the Fed would move to increase nterest rates, and particularly when.

You and literally 99.9% of the population loosely involved with finance and/or the stock market.

These are the questions that have been on everyone’s mind.

Yup

Since mid-2013, the near-unanimous consensus (with credit to DoubleLine’s Jeffrey Gundlach for vocally departing from it) has been that rates would rise.

And what was your opinion?

And, of course, the yield on the 10-year Treasury has fallen from roughly 3% at that time to 2.2% today. This year many investing institutions are underperforming the passive benchmarks and attributing part of the shortfall to thefact that their fixed income holdings have been too short in duration to allow them to benefit from the decline of interest rates.

Sometimes everyone is wrong. Who knew?

While this has nothing to do with oil, I mention it to provide a reminder that what “everyone knows” is usually unhelpful at best and wrong at worst.

Thanks.

Not only did the investing herd have the outlook for rates wrong, but it was uniformly inquiring about the wrong thing. In short, while everyone was asking whether the rate rise would begin in December 2014 or April 2015 (or might it be June?)

Yes we got it. The masses were wrong. Were you? What was your prediction?

in response to which I consistently asked why the answer matters and how it might alter investment decisions

So you are the kind of guy who answers questions with questions. Got it. I hate people who do that.

few people I know were talking about whether the price of oil was in for a significant change.

Huh? Ill bet when they were talking about what was going to happen to rates they also werent brining up what they had for dinner the night before also. Did you bring up what could happen to the price of oil when thinking about what would happen to rates? I doubt it.

Back in 2007, in It’s All Good,

Im not going to buy your book.

I provided a brief list of some possibilities for which I thought stock prices weren’t giving enough allowance.

Great, and how did that work out?

>I included “$100 oil” (since a barrel was selling in the $70s at the time)

So you thought what basically every single other person in the market thought.

and ended with “the things I haven’t thought of.”

In addition to the humbling statement in the beginning every single letter like this also has the I am so smart because I anticipate that which cant be anticipated.

I suggested that it’s usually that last category – the things that haven’t been considered – we should worry about most.

Give it a rest. Literally every single book or memo from a guru says this.

Asset prices are often set to allow for the risks people are aware of. It’s the ones they haven’t thought of that can knock the market for a loop.

No shit. Known things are already priced in. Unknown things arent. Thanks for the deep insight.

In my book The Most Important Thing,

Im not going to buy this book either

I mentioned something I call “the failure of imagination.” I defined it as “either being unable to conceive of the full range of possible outcomes or not understanding the consequences of the more extreme occurrences.” Both aspects of the definition apply here.

Yes yes, the standard everyone isnt smart and doesnt think of all the possibilities except you know, me, and every other guru out there who says the exact same thing.

The usual starting point for forecasting something is its current level.

Well of course, what do you propose instead? I cant wait for the deep insight.

Most forecasts extrapolate, perhaps making modest adjustments up or down. In other words, most forecasting is done incrementally, and few predictors contemplate order-of-magnitude changes. Thus I imagine that with Brent crude around $110 six months ago, the bulls were probably predicting $115 or $120 and the bears $105 or $100. Forecasters usually stick too closely to the current level, and on those rare occasions when they call for change, they often underestimate the potential magnitude.

OK, so how would you have analyzed the price of oil 6 months ago without including in that analysis of the information updated every second by participants in the market i.e. the price?

Very few people predicted oil would decline significantly, and fewer still mentioned the possibility that we would see $60 within six months.

I actually did, but I was early. Leaving that aside, what did you think? Christ we are multiple paragraphs into this now and we are still stuck on nobody predicts anything right. I may or may not have, I wont tell you that, but I do know that I think outside the box unlike everyone else!

For several decades, Byron Wien of Blackstone (and formerly of Morgan Stanley, where he authored widely read strategy pieces) has organized summer lunches in the Hamptons for “serious,” prominent investors. At the conclusion of the 2014 series in August, he reported as follows with regard to the consensus of the participants:

Yeah we got it. The serious investors are going to be just as wrong as everyone else.

Most believed that the price of oil would remain around present levels. Several trillion dollars have been invested in drilling over the last few years and yet production is flat because Nigeria, Iraq and Libya are producing less. The U.S. and Europe are reducing consumption, but that is being more than offset by increasing demand from the developing world, particularly China. Five years from now the price of Brent is likely to be closer to $120 because of emerging market demand.

Yup, I was right. Whats the insight here? Oh I got it, everyone is wrong all the time, except for him. Well, me might be wrong, we dont know, but I assure you that after the fact he is capable of pointing out that everyone else was wrong.

I don’t mean to pick on Byron or his luncheon guests.

Then why are you?

In fact, I think the sentiments he reported were highly representative of most investors’ thinking at the time.

Everyone was wrong about oil. We got it. Were you?

As a side note, it’s interesting to observe that growth in China already was widely understood to be slowing, but perhaps that recognition never made its way into the views on oil of those present at Byron’s lunches.

Ah, so, the smart people knew growth in China was slowing AND they used that in their analysis of what might happen to oil? Wow, lets track those people down unlike the serious investors and hedge fund managers as well as all of the buyers and sellers in the oil market who never considered that what happens in China might affect the price of oil.

This is an example of how hard it can be to appropriately factor all of the relevant considerations into complex real-world analysis.

Man, youre right. Taking the leap that what happens to the economy in China might affect oil is just too difficult for most people.

Turning to the second aspect of “the failure of imagination” and going beyond the inability of most people to imagine extreme outcomes, the current situation with oil also illustrates how difficult it is to understand the full range of potential ramifications.

OK great, finally some insight. Please tell us all these things that people who fail to imagine like you do dont understand.

Most people easily grasp the immediate impact of developments, but few understand the “second-order” consequences . . . as well as the third and fourth

OK cool, so you are going to tell us the 5th and 6th order affects that most people dont grasp. Awesome, finally some content.

When these latter factors come to be reflected in asset prices, this is often referred to as “contagion.”

What, you mean banks going under because they loaned money to people who couldnt pay it back is a 5th order consequence? I wonder what consequences 1-4 were.

Everyone knew in 2007 that the sub-prime crisis would affect mortgage-backed securities and homebuilders, but it took until 2008 for them to worry equally about banks and the rest of the economy.

Everyone was smart enough to know the affect on MBS and homebuilders but too stupid to see how it would affect banks? Oh come on. How about the market had no idea just how bad the situation was and just how much the banks were levered against it. Oh, by the way, were YOU smart enough to worry about the banks in 2007?

The following list is designed to illustrate the wide range of possible implications of an oil price decline, both direct consequences and their ramifications:

Great, finally, lets see those 5th and 6th order consequences that we are too stupid to see.

o Lower prices mean reduced revenue for oil-producing nations such as Saudi Arabia, Russia and Brunei, causing GDP to contract and budget deficits to rise.
o There’s a drop in the amounts sent abroad to purchase oil by oil-importing nations like the U.S., China, Japan and the United Kingdom.
o Earnings decline at oil exploration and production companies but rise for airlines whose fuel costs decline.
o Investment in oil drilling declines, causing the earnings of oil services companies to shrink, along with employment in the industry.
o Consumers have more money to spend on things other than energy, benefitting consumer goods companies and retailers.
o Cheaper gasoline causes driving to increase, bringing gains for the lodging and restaurant industries.

With the cost of driving lower, people buy bigger cars – perhaps sooner than they otherwise would have – benefitting the auto companies. They also keep buying gasoline powered cars, slowing the trend toward alternatives, to the benefit of the oil industry.

o Likewise, increased travel stimulates airlines to order more planes – a plus for the aerospace companies – but at the same time the incentives decline to replace older planes with fuel-efficient ones. (This is a good example of the analytical challenge: is the net
impact on airplane orders positive or negative?)
o By causing the demand for oil services to decline, reduced drilling leads the service
companies to bid lower for business. This improves the economics of drilling and thus
helps the oil companies.
o Ultimately, if things get bad enough for oil companies and oil service companies, banks
and other lenders can be affected by their holdings of bad loans.

You have got to be kidding me. The things that EVERYONE has been talking about every day are your insights?

Further, it’s hard for most people to understand the self-correcting aspects of economic events.

Cool, lets learn some things I dont know

o A decline in the price of gasoline induces people to drive more, increasing the demand for oil.
o A decline in the price of oil negatively impacts the economics of drilling, reducing additions to supply.
o A decline in the price of oil causes producers to cut production and leave oil in the ground to be sold later at higher prices.

Is this guy for real?

In all these ways, lower prices either increase the demand for oil or reduce the supply, causing the price of oil to rise (all else being equal). In other words, lower oil prices – in and of themselves – eventually make for higher oil prices. This illustrates the dynamic nature of economics.

Lets sum up the article to this point:

1. I have no special insight on things, I am just a humble guy pressured into sharing my thoughts with you.

2. The crowd is often wrong, including the pros.

3. But, I have special insight into how everyone else is short-sighted.

4. That being said I wont tell you what I thought at the time.

5. But look at these insights I have, which you might have heard 100 times already by anyone else you have spoken to.

Finally, in addition to the logical but often hard-to-anticipate second-order consequences or knock-on effects,

Wait a minute. Earlier you said 1st and 2nd order (even 3rd or 4th) were easy, but that the 5th and beyond were hard. Anyway, is there a single person alive who hasnt extrapolated the fact that when oil prices go down countries which sell oil will receive less money for it?

negative developments often morph in illogical ways.

ok, lets get some fresh insight.

Thus, in response to cascading oil prices, “I’m going to sell out of emerging markets that rely on oil exports” can turn into “I’m going to sell out of all emerging markets,” even oil importers that are aided by cheaper oil.

Assuming anyone has made that argument, if mutual funds hold assets in a wide range of emerging markets than the decision to sell out of emerging markets that rely on oil exports will certainly impact the short term price of all emerging markets as people liquidate their emerging markets ETFs and funds.

In part the emotional reaction to negative developments is the product of surprise and disillusionment. Part of this may stem from investors’ inability to understand the “fault lines” that run through their portfolios. Investors knew changes in oil prices would affect oil companies, oil services companies, airlines and autos. But they may not have anticipated the effects on currencies, emerging markets and below-investment grade credit broadly.

I somehow doubt that considering the past correlations, but again I wonder if he saw all of this coming.

Among other things, they rarely understand that capital withdrawals and the resulting need for liquidity can lead to urgent selling of assets that are completely unrelated to oil.

Perhaps this is true for anyone who entered the market in 2009 and has never bothered to study pre 2009 market history.

People often fail to perceive that these fault lines exist, and that contagion can reach as far as it does. And then when that happens, investors turn out to be unprepared, both intellectually and emotionally.

Perhaps.

A grain of truth underlies most big up and down moves in asset prices

That, and the billions of dollars exchanged in open markets that determine the price.

Not just “oil’s in oversupply” today, but also “the Internet will change the world” and “mortgage debt has historically been safe.” Psychology and herd behavior make prices move too far in response to those underlying grains of truth, causing bubbles and crashes, but also leading to opportunities to make great sales of overpriced assets on the rise and bargain purchases in the subsequent fall.

Sometimes markets get out of control and the wise man sells at the top. Did you?

If you think markets are logical and investors are objective and unemotional, you’re in for a lot of surprises. In tough times, investors often fail to apply discipline and discernment;

People are too bullish at the top and too bearish at the bottom. Got it.

psychology takes over from fundamentals; and “all correlations go to one,” as things that should
be distinguished from each other aren’t.

People panic and run for the exits. OK, got it. However isnt the S&P making new highs?

To give you an idea about how events in one part of the economy can have repercussions in other economic and market segments, I’ll quote from some of the analyses I’ve received this week from Oaktree investment professionals:

Ah, ok. Perhaps you are just a professional blow-hard that relies on your analysts. Great, lets hear some insight:

Energy is a very significant part of the high yield bond market. In fact, it is the largest sector today (having taken over from media/telecom, which has traditionally been the largest). This is the case because the exploration industry is highly capital-intensive, and the high yield bond market has been the easiest place to raise capital.

You have an analyst who knows that the energy industry issues lots of high-yield bonds. Good job with that hire. Youd better give him a raise before a competitor steals him from you.

The knock-on effects of a precipitous fall in bond prices in the biggest sector in the high yield bond market are potentially substantial: outflows of capital, and mutual fund and ETF selling.

Interesting you understand that here, but find it strange when the same thing happens in emerging markets.

>It would be great for opportunistic buyers if the selling gets to sectors that are fundamentally in fine shape . . . because a number of them are. A wise man buys under-priced assets when everyone is panic selling.

Yes. What opportunities do you see?

And, in fact, low oil prices can even make them better.

Like what? Give us some ideas.

An imperfect analogy might be instructive: capital market conditions for energy-related assets today are not unlike what we saw in the telecom sector in 2002. As in telecom, you’ve had the confluence of really cheap financing, innovative technology, and prices for the product that were quite stable for a good while. [To this list of contributing factors, I would add the not-uncommon myth of perpetually escalating demand for a product.

Interesting. Thank you. Finally.

These conditions resulted in the creation of an oversupply of capacity in oil, leading to a downdraft. It’s historically unprecedented for the energy sector to witness this type of market downturn while the rest of the economy is operating normally. Like in 2002, we could see a scenario where the effects of this sector dislocation spread wider in a general “contagion.”

I must have missed the great financial contagion of 2002.

Selling has been reasonably indiscriminate and panicky (much like telecom in 2002) as managers have realized (too late) how overexposed they are to the energy sector. Trading desks do not have sufficient capital to make markets, and thus price swings have been

OK

predictably volatile.

Which you made money off I presume?

The oil selloff has also caused deterioration in emerging market fundamentals and may force spreads to gap out there. This ultimately may create a feedback loop that results in contagion to high yield bonds generally.

So your great insight is that the price of oil will affect emerging markets and the high yield market? Awesome. What do you get, 2 and 20%?

Over the last year or so, while continuing to feel that U.S. economic growth will be slow and unsteady in the next year or two,

OK, finally a prediction

I came to the conclusion that any surprises were most likely to be to the upside. And my best candidate for a favorable development has been the possibility that the U.S. would sharply increase its production of oil and gas. This would make the U.S. oil independent, making it a net exporter of oil and giving it a cost advantage in energy – based on cheap production from fracking and shale – and thus a cost advantage in manufacturing. Now, the availability of cheap oil all around the world threatens those advantages. So much for macro forecasting!

So you thought that a massive increase in the supply of oil and gas would result in a price increase? Didnt you also know that growth was slowing in China?

There’s a great deal to be said about the price change itself. A well-known quote from economist Rudiger Dornbusch goes as follows: “In economics things take longer to happen than you think they will, and then they happen faster than you thought they could.”

Ok whatever.

I don’t know if many people were thinking about whether the price of oil would change,

Well, Byron Weins friends were, as you previously related.

but the decline of 40%- plus must have happened much faster than anyone thought possible.

To be honest, I thought it was, but then again I dont have a clear record to boast of.

“Everyone knows” (now!) that the demand for oil turned soft (due to sluggish economic growth, increased fuel efficiency and the emergence of alternatives) at the same time that the supply was increasing (as new sources came on stream).

Who didnt know that before? Did you have analysts that told you otherwise?

Equally, everyone knows that lower demand and higher supply simply lower prices.

No shit.

Yet it seems few people recognized the ability of these changes to alter the price of oil.

Perhaps

A good part of this probably resulted from belief in the ability of OPEC (meaning largely the Saudis) to support prices by limiting production.

Perhaps. I think it was more that people thought political instability would keep prices high.

A price that’s kept aloft by the operation of a cartel is, by definition, higher than it would be based on supply and demand alone

gee, thanks

Maybe the thing that matters is how far the cartelized price is from the free-market price; the bigger the gap, the shorter the period for which the cartel will be able to maintain control. Initially a cartel or a few of its members may be willing to bear pain to support the price by limiting production even while others produce full-out. But there may come a time when the pain becomes unacceptable and the price supporters quit. The key lesson here may be that cartels and other anti-market mechanisms can’t hold forever.

Yes, this is Econ 101. Thanks

As Herb Stein said, “If something cannot go on forever, it will stop.” Maybe we’ve just proved that this extends to the effectiveness of cartels.

Or maybe the Saudis want to kill the price to hurt the US oil industry, Iran, and Russia.

Anyway, on the base of 93 million barrels a day of world oil use, some softness in consumption combined with an increase in production to cut the price by more than 40% in just a few months.

thanks for the info.

What this proves – about most things – is that to Dornbusch’s quote above we should append the words “. . . and they go much further than you thought they could.”

I would think that a 5th order thinker like yourself could have imagined this.

The extent of the price decline seems much greater than the changes in supply and demand would call for.

You skipped day two of econ 101. Something about pricing at the margin.

Perhaps to understand it you have to factor in (a) Saudi Arabia’s ceasing to balance supply and demand in the oil market by cutting production, after having done so for many years, and (b) a large contribution to the decline on the part of psychology.

Is this your 5th order thinking on display?

(In the “conspiracy theory” department, consider the rumor that Saudi Arabia is allowing or abetting the price drop in order to either punish Iran, Iraq and ISIL; put the U.S. shale oil industry out of business; or discipline the more profligate members of OPEC . . . take your pick.)

It may or may not be true, but it is not a conspiracy to say that the Saudis can affect the price of oil and have been perfectly fine with the decline in prices.

The price of oil thus may have gone from too high (supported by OPEC and by Saudi Arabia in particular) to too low (depressed by negative psychology).

So you are long here?

It seems to me with regard to the latter that the price fell too far for some market participants to maintain their equanimity. I often imagine participants’ internal dialogues. At $110, I picture them saying, “I’ll buy like mad if it ever gets to $100.” Because of the way investor psychology works, at $90 they may say, “If it falls to $70, I’ll give serious thought to buying.” But at $60 the tendency is to say, “It’s a falling knife and there’s no way to know where it’ll stop; I wouldn’t touch it at any price.”

So you are long here?

It feels much better to buy assets while they’re rising. But it’s usually smarter to buy after they’ve fallen for a while. Bottom line, as noted above: there’s little logic in investor psychology

Yeah, we got it.

I said it about gold in All That Glitters (November 2010)

Im not going to buy it, but lets see what you said:

and it’s equally relevant to oil:

This should be good.

it’s hard to analytically put a price on an asset that doesn’t produce income.

Well, you know, you can always see what it is trading for in the open market.

In principle, a nonperishable commodity won’t be priced below the variable production cost of the highest-cost producer whose output is needed to satisfy total demand.

Perhaps the highest cost producer is over-estimating future demand.

But in reality and in the short run, strange things can happen. It’s clear that today’s oil price is well below that standard. It’s hard to say what the right price is for a commodity like oil . . . and thus when the price is too high or too low. Was it too high at $100-plus, an unsustainable blip? History says no:

Well, it did go down 40%

It was there for 43 consecutive months through this past August. And if it wasn’t too high then, isn’t it laughably low today?

Perhaps the oil market 43 months ago is different than today?

The answer is that you just can’t say. Ditto for whether the response of the price of oil to the changes in fundamentals has been appropriate, excessive or insufficient. And if you can’t be confident about what the right price is, then you can’t be definite about financial decisions regarding oil.

So lets sum up the article to this point:

I have no insights whatsoever beyond what everyone else has, but I decided to write this letter because I am so smart and can see 5th order things (despite the fact that I opened this letter pretending that I dont think Im so smart).

In the last few years, as I said in The Role of Confidence (August 2013),

Im not going to buy it

investor sentiment has been riding high.

who knew?

Or, as Doug Kass pointed out this past summer, there’s been “a bull market in complacency.”

I gotta admit, that is wittier than anything you have said so far.

Regardless, it seems that a market that was unconcerned about things like oil and its impact on economies and assets now has lost its composure. Especially given the pervasive role of energy in economic life, uncertainty about oil introduces uncertainty into many aspects of investing.

Yet the S&P is at or near all time highs.

“Value investing” – the form of investing Oaktree practices – is supposed to be about buying based on the present value of assets, rather than conjecture about profit growth in the far-off future.

How can you value an asset without making assumptions about future income streams>

But you can’t assess present value without taking some position on what the future holds, even if it’s only assuming a continuation of present conditions or perhaps – for the sake of conservatism – a considerably lower level.

OK, and?

Recent events cast doubt on the ability to safely take any position.

So you have no idea what to do and cant value anything? And you get paid 2 and 20%?

One of the things that’s central to risk-conscious value investing is ascertaining the presence of a generous cushion in terms of “margin of safety.” This margin comes from conviction that conditions will be stable, financial performance is predictable, and/or an entry price is low relative to the asset’s intrinsic value.

If you cant predict anything, you need to pay a lower price to make sure your margin of safety still exists.

But when something as central as oil is totally up for grabs, as investors seem to think is the case today, it’s hard to know whether you have an adequate margin.

Do you think its up for grabs? can you value it? What do you think?

Referring to investing, Charlie Munger told me, “It’s not supposed to be easy.” The recent events surrounding oil certainly prove that it isn’t.

Thats some great insight right there.

On the other hand – and in investing there’s always another hand – high levels of confidence, complacency and composure on the part of investors have in good measure given way to disarray and doubt, making many markets much more to our liking.

So you are long? what are you long? what are you buying?

For the last few years, interest rates on the safest securities – brought low by central banks – have been coercing investors to move out the risk curve. Sometimes they’ve made that journey without cognizance of the risks they were taking, and without thoroughly understanding the investments they undertook. Now they find themselves questioning many of their actions, and it feels like risk tolerance is being replaced by risk aversion. This paragraph describes a process through which investors are made to feel pain, but also one that makes markets much safer and potentially more bargain-laden.

As the S&P 500 makes new highs?

In particular with regard to the distress cycle, confident and optimistic credit markets permit the unwise extension of credit to borrowers who are undeserving but allowed to become overlevered nevertheless.

We know.

Negative subsequent developments can render providers of capital less confident, making the capital market less accommodative. This cycle of easy issuance followed by defrocking has been behind the three debt crises that delivered the best buying opportunities in our 26 years in distressed debt.

OK great, so you see an opportunity to buy assets on the cheap. Is that what you are doing? What do you like here?

We think it also holds the key to the creation of superior opportunities in the future. We’ve argued for a few years that credit standards were dropping as investors – chasing yield – became less disciplined and less discerning. But we knew great buying opportunities wouldn’t arrive until a negative “igniter” caused the tide to go out, exposing the debt’s weaknesses. The current oil crisis is an example of something with the potential to grow into that role. We’ll see how far it goes.

So you are not long here yet. ok.

For the last 3½ years, Oaktree’s mantra has been “move forward, but with caution.”

You forgot to add and say nothing useful, while telling you all how smart we are.

For the first time in that span, with the arrival of some disarray and heightened risk aversion, events tell us it’s appropriate to drop some of our caution and substitute a degree of aggressiveness.

Wait, so you are long here?

Blowback. This person gets it.

I had trouble sleeping the other night and while browsing around youtube I came across a video posted by someone who was filming in New York City as 9/11 unfolded.  I generally dont watch this sort of thing but clicked on it and was surprised to find rare insight by a female photographer he was walking with.  While most Americans still seem to think that terrorists hate us for our freedoms, this woman had it figured out after the planes hit and while the towers were on fire but still standing.  The video should start at 3:03:

Here is the transcript:

Female Photographer:

Oh theres so many dead people I wonder what George Bush is going to do nowits about time we wake up and fucking stop fucking with other peopleand they will stop fucking with us.  evil.

Its pretty much common sense, but the very idea that the people who are out to do us harm have any sort of legitimate complaints against us is a difficult subject to broach with most Americans.   The facts remain thought that terrorist activity against us is a result of blowback.

On this point I cant recommend enough the book Blowback The Cost and Consequences of American Empire by Chalmers Johnson.

Blowback is unintended consequences of a covert operation that are suffered by the civil population of the aggressor government. To the civilians suffering the blowback of covert operations, the effect typically manifests itself as random acts of political violence without a discernible, direct cause; because the public—in whose name the intelligence agency acted—are ignorant of the effected secret attacks that provoked revenge (counter-attack) against them.

Heres a link to the book:  http://www.amazon.com/Blowback-Consequences-American-Empire-Project/dp/0805075593

If you want to understand how we got to where we are in the world today, this book explains it.

Terrorism and Terrorist have officially lost all meaning

Ive posted before about a proper working definition of terrorism.  Today its time to declare that the word terrorism has officially lost all meaning.  This isnt the first time a word has lost all meaning.  It happens quite a bit.   Sometimes it is the sign of a good thing.  For example, when I was a kid in Connecticut I would see on the news stories of meatheads from Brooklyn of New Jersey heading down to Greenwich Village to Gay Bash i.e. to literally assault homosexuals for being homosexual.  In the last 20 years however you see something different happening.  Gay Bashing has by and large lost all meaning.  When I hear gay bashing I dont think that a homosexual was assaulted, rather I think that some politicians or some conservatives are opposing LGBT rights (see here and here).  The reason the definition of gay bashing is different today is because violent assaults on homosexuals dont happen nearly as much as they used to (of course they still do happen).  This is a good thing.

Another word (or phrase in this case) that is losing all meaning is PTSD.  It used to be that when someone said that they have PTSD that I assumed they had seen combat in Vietnam or one of the endless aggressive wars the United States has waged since then.  Now when I hear someone has PTSD I assume he had a crappy relationship with his father and is un-motivated and depressed and want s to be able to take his dog on airline flights.  That PTSD has changed meanings is generally a bad thing because it leads to less accommodation by society of people suffering from truly traumatic experiences.

Terrorism has lost all meaning.  Governments have learned that the fear of terrorism has allowed a massive expansion of the Warfare State along with the corresponding infringement on civil liberties.  As a result, the accusation of terrorism or terrorist is employed in the most ridiculous of circumstances.

This article is the most recent and best example of all that.  Last week Serbia and Albania had a football match in Belgrade.  During the match a drone carrying a Greater Albania banner that showed Kosovo as a part of “Greater Albania” was flown just over the field.  A Serb player ripped the flag down, causing an Albanian player to retrieve the flag.  A melee broke out and outnumbered 30,000-15 or so the Albanians feared for their lives and fled the field.  A dispute broke out between Serbia and Albania over the incident and Serbia called the Albanian players and coaches “accomplices” to a plan that was a “pre-planned terrorist action”.  Absurd.  (That being said, Albania wasnt much better about the incident, instead whining about racism.)

So is this change in the definition of terrorist a good thing or a bad thing?  I think it is good thing.  Terrorism and the fear of it has been used by governments to such great affect in expanding the Warfare State that the more ridiculous governments get with the phrase eventually more people will start to see through the entire terrorism charade.

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