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Saturday, December 21, 2013

Famous Last Words: I don't do quagmires

Following up on the last post about whether Kennedy would have avoided a Vietnam quagmire, just a quote from a press conference with then Defense Secretary Donald Rumsfeld on Iraq in 2003:
Rumsfeld: I have since gone to the dictionary. And I have looked up several things, one of which I can't immediately recapture, but one was "guerrilla war", another was "insurgency", another was "unconventional war" --
Q: "Quagmire"?
Rumsfeld: Pardon me?
Q: "Quagmire"? (Laughter.)
Rumsfeld: No. That's someone else's business. Quagmire is -- I don't do quagmires. (Laughter.)
Secretary of Defense Donald Rumsfeld and Coalition Provisional Authority Administrator L. Paul Bremer III

Saturday, November 23, 2013

Countering the Counterfactual: Would Kennedy Have Avoided the Vietnam Quagmire? Reflections 50 Years After the Facts

President Kennedy meeting with Taylor and McNamara on Oct. 2, 1963, when withdrawal of American military "advisers" was supposedly decided. This was formalized on Oct. 5, according to White House tapes, and issued as National Security Action Memorandum 263 on Oct. 11.

On the occasion of the fiftieth anniversary of John Kennedy's assassination it seems appropriate to reexamine one of the preeminent historical counterfactuals: whether Kennedy would have avoided the US escalation of the war in Vietnam had he lived and been reelected to the presidency. Or are quagmires (like meltdowns) politically seemingly inevitable?

Ian Buruma makes the rather extreme claim in a recent commemorative piece "The Kennedy Temptation" that
Some of Kennedy’s most ardent admirers still like to believe that he would have prevented the escalation of the Vietnam War had he lived longer. But there is no evidence for that at all.
While I have limited patience with Oliver Stone-like revisionist historiography, there is rather serious evidence in the historical record that Kennedy had in fact already committed the US to unconditional withdrawal of the first 1000 American military "advisers" by the end of 1963 and the rest of the 17,000 by the end of 1965, on Oct. 2, 1963, six weeks before his death. This has been known to serious historians since the 1990s, and has been confirmed by many contemporaries who had been close to Kennedy. Moreover, he had always been firmly opposed to sending any combat troops to Vietnam, against the advice of the Joint Chiefs of Staff he was given as early as 1961. Whether he would have stuck to this decision under later circumstances is ultimately metaphysically unknowable, but to say that there is no evidence at all strikes me as willful historical blindness.

Let me just point to the serious sources which, whether you agree with their interpretations or not, at least refute Ian Buruma's claim that "there is no evidence at all":

Roger Hilsman, To Move a Nation: The Politics of Foreign Policy in the Administration of John F. Kennedy, Doubleday, 1967.

John M. Newman, JFK and Vietnam, Warner Books, 1992 (and see the book review "What Would He Have Done?" by Arthur Schlesinger Jr. in the New York Times).

Robert McNamara, In Retrospect: The Tragedy and Lessons of Vietnam, Vintage Books, 1995.

Howard Jones, Death of a Generation: How the Assassinations of Diem and JFK Prolonged the Vietnam War, Oxford University Press, 2003.

James K. Galbraith, "Exit Strategy: In 1963, JFK ordered a complete withdrawal from Vietnam," Boston Review 01 Sept 2003 (and see the exchange between Noam Chomsky and Galbraith in the Boston Review 01 Dec 2003).

James G. Blight, Janet M. Lang, and David A. Welch, Virtual JFK: Vietnam If Kennedy Had Lived, Rowman & Littlefield, 2010.

While McNamara suggested to Kennedy that he make an immediate public announcement of the withdrawals to make them irreversible (which Kennedy's press secretary Salinger did at a press conference on Oct. 2), Kennedy seemed intent on obfuscating the unconditional and complete nature of this withdrawal to not seem to be putting pressure on Diem and interfere with his own reelection by creating a "who lost [Indo]China issue", or so these authors suggest.

I will not enter the debate on what this evidential record does or does not prove. Suffice it to say that there is such a record which cannot be dismissed out of hand. Instead I would like to point out two other sources that have not been mentioned in this context.

1. Daniel Ellsberg, originally as convinced a Cold Warrior as Kennedy, whose creditentials as a whistleblower on American duplicity during the Cold War and in particular in Vietnam does not need to be established here, based on confidential conversations with Robert Kennedy before his death, reports in his book Secrets: A Memoir of Vietnam and the Pentagon Papers (Viking Penguin, 2002, pp. 194-7) that John Kennedy was adamantly opposed to sending combat troups to Vietnam. According to Ellsberg, Robert Kennedy said "We didn't want to lose in Vietnam or get out. We wanted to win if we could. But my brother was determined never to send ground combat units to Vietnam." If the war proved to be unwinnable, according to Bobby, President Kennedy would have aimed for a "Laotian" compromise neutrality solution (p. 195). This deep aversion to US combat involvement was based on Kennedy's one-day visit to Vietnam in 1951, where the hopeless and self-delusional French position was something he never wanted the US to find itself in (pp. 196-7). Apparently he had been informed by the American consular official Edmund Gullion that "The French have lost. If we come in here and do the same thing we will lose, too, for the same reason. There's no will or support for this kind of war back in Paris. The home front is lost. The same thing would happen to us." (p. 196, and this three years before the final French defeat at Dien Bien Phu!).

2. The morning edition of the New York Times of 22 Nov. 1963 (just hours before the assassination) carried the headline "Kennedy plans to withdraw US advisors from Vietnam" (I may be paraphrasing here). This is not what you will find if you now search the Times' digital archives for that date, but my cynical journalist father (then working for the pre-Murdoch New York Post) stashed away a copy in our basement in New York that I later chanced upon (subsequently destroyed in a basement flood) for reasons of his own. If any reader can retrieve a copy of this morning edition with this headline, I would much appreciate being informed.

Ultimately, counterfactual history is an unscientific enterprise -- there is no possibility of proof or refutation. However, that does not imply that it is completely futile to try to marshall evidence.

Daniel Ellsberg gives a nice summing up of the issue (Secrets, p. 195):
I believed him [Robert Kennedy], and still believe him, that his brother was strongly convinced that he should never send ground troops to Indochina, and that he was prepared to accept a "Laotian solution" if necessary to avoid that. If true, that subjective conviction and readiness would mark John F. Kennedy as significantly different in his attitude toward our stakes and appropriate strategy in Vietnam from both Lyndon Johnson and Richard Nixon, neither of whom shared this felt constraint or readiness to concede under some conditions. Whether President Kennedy, if he had survived, would have lived up to this conviction in the face of a crisis in 1965 is (as his brother acknowledged) another question, unanswered.

Saturday, October 5, 2013

Tea Party Shutdown Revealed to be Chinese Plot to Destroy American Hegemony: A Creditanstalt IB Exclusive Report!

Frank Sinatra (left) in The Manchurian Candidate (1962) and Rep. Paul Ryan (right) speaking at CPAC in Washington D.C. on February 10, 2011

The Creditanstalt Intelligence Bureau (IB), based on an exclusive leak of top-secret NSA dossiers obtained by Edward Snowden, outs the Tea Party faction of the Republican Party as covert ‘Manchurian Candidate’ agents of the Chinese Communist Party (CCP) bent on once-and-for-all destruction of American global economic and political hegemony.

The story in brief:
  • Tea Party leaders, masquerading as ultrapatriotic know-nothing Americans, are actually Chinese sleeper agents wittingly or unwittingly programmed to self-destruct American power as part of a long-term CCP subterfuge program initiated by Chairman Mao Zedong in the 1960s, codenamed “Manchurian Candidate II (MCII),”  inspired by the 1959 novel and 1962 hit movie.
  • Their chief media outlet, Fox News, long ago aligned itself with the Chinese MCII program after News Corporation Chairman Rupert Murdoch reached an agreement in 1993 with the CCP to allow his Sky TV network to broadcast in mainland China (after dropping BBC from his programming and other acts of groveling self-censorship – see NY Times, NY Review of Books and Guardian revelations about Murdoch’s China connection).

Chinese President Jiang Zemin shaking hands with with Rupert Murdoch during a private meeting at the Beverly Hilton Hotel in Beverly Hills, California, November 2, 1997

  • The wealth of the Tea Party’s chief financial backers, the Koch brothers, goes back to their father Fred’s petroleum activities in the Soviet Union under Stalin. Fred Koch disguised his communist sympathies after returning to the US by becoming a rapbid spokesman for the John Birch Society.
  • Manchurian Candidate II follows upon previous failed Chinese subterfuge programs against America such as currency manipulation (now undermined by accelerating Chinese wage inflation) and the American gross obesity epidemic due to addictive consumption of high-fructose corn syrup (now undermined by McDonald’s promotion of salad bars). Both of these programs were initiated during the Nixon administration, and achieved their early success due to the subtle but effective brainwashing and heavy doses of MSG Nixon had been subjected to during his historic meetings with Mao in Beijing.
  • Chinese leaders realized that they could never overtake America by economic growth alone due to their declining birthrate and the limitations of a pure catch-up strategy, as became clear after the Japanese relative stagnation in the 1990s. Their current reliance on MCII is proving to be much more cost effective while preserving the façade of a nativist, anticommunist, anti-big-government grassroots movement. 
A number of prominent commentators have pointed out that the Tea Party Republicans’ use of the debt ceiling as an instrument of political blackmail is tantamount to assisted suicide for American economic and political hegemony, and threatens the stability of the entire economic structure of the Western world (see e.g. Simon Johnson’s “The Loss of U.S. Pre-eminence,” the IMF’s Christine Lagarde’s recent speech, Kenneth Rogoff’s “America’s Endless Budget Battle” or Jonathan Freedland’s “Shutting Down the World?”; read them in the context of my 2009 web essay). While isolationists in America’s past were eager to turn their backs on the rest of the world, their Tea Party descendants actually seem willing to sabotage the foundations of their own country for the purported principle of denying their citizens access to (near but not universal) health insurance, something every other industrialized country has enjoyed for decades cheaper and more effectively than the USA. That the shutdown is not really about ‘Obamacare’ is something leading Republicans have admitted in the meantime:
“We’re not going to be disrespected,” conservative Rep. Marlin Stutzman, R-Ind., [told the Washington Examiner]. “We have to get something out of this. And I don’t know what that even is.”*
President Obama’s cancelation of his Asian trip this week to APEC and ASEAN meetings is already a notable triumph for MCII, since it decisively undermines his ‘Asian pivot’ strategy that the Chinese rightly see as targeted against their great-power aspirations in the Asia-Pacific region.

Even without the Snowden documents it is clear just on a cui bono basis alone that there can be no other rational explanation for the Tea Party’s hijacking of the Republican Party and its unprecedented flirtation with US default than China’s covert Manchurian Candidate II program. The only alternative—pure pleasure in playing a game of chicken with President Obama at the American people’s expense—is patently implausible.

The Tea Party Caucus would like us to believe that the government shutdown and debt-ceiling showdown are a desperate but justifiable game of chicken to forestall ‘Obamacare’, big government and deficits. After the Creditanstalt IB revelations, however, we now know them to be solely in the interests of China’s strategy for world hegemony, in which Tea Party politicians are witting or unwitting pawns. (Still from Rebel Without a Cause)

[The Creditanstalt Intelligence Bureau wishes to point out to the particularly dense that the above is a (reverse) satirical exercise in “The Paranoid Style in American Politics.” Since the game of chicken the Tea Party Caucus is pursuing is indistinguishable in its effects from the purported Chinese Manchurian Candidate II strategy outlined above, the distinction between real foreign sleeper agents and libertarian American patriots seems entirely moot.]

Saturday, August 24, 2013

Terrorism as the New McCarthyism, the Independent as the New Chicago Tribune?

The Wikipedia defines McCarthyism as
the practice of making unfair allegations or using unfair investigative techniques, especially in order to restrict dissent or political criticism.
Sound familiar? See any resemblance to the UK's playing "harddrive" with the Guardian, or detaining David Miranda for nine hours under section 7 of the Terrorism Act (see previous post) and subsequently justifying it by claiming that the information he may or may not have been carrying would abet terrorists (not that he himself was engaged in terrorism or had any intention of communicating sensitive information to such persons). The Home Office spokesperson went on to say that
 Those who oppose this sort of action need to think about what they are condoning.
Does this mean that criticism of illegal government detentions on human rights grounds is now itself a form of abetting terrorism? We seem to be rapidly approached the Alice-In-Wonderland, Catch-22 world where black is white and lies are truths and anyone who questions the government has already provided sufficient proof that they are "un-American," "terrorists," enemies of the state. 

By that logic the fact that I own a pressure cooker would be sufficient to justify my detainment, since said pressure cooker could easily fall into the hands of terrorists such as the Boston Marathon bombers (and in fact a hapless Long Island family's web searches led to a "perfect storm of terrorism profiling" by a police task force –which, however, did not "press [her] husband on the dilemma facing liberals over whether quinoa consumption is ethically sound – many Bolivians can no longer afford their staple food now everyone in Brooklyn is eating it.").

The wife's conclusions cut to the heart of the matter:

This is where we are at. Where you have no expectation of privacy. Where trying to learn how to cook some lentils could possibly land you on a watch list. Where you have to watch every little thing you do because someone else is watching every little thing you do.

All I know is if I'm going to buy a pressure cooker in the near future, I'm not doing it online.

I'm scared. And not of the right things.
We expected this of the Stasi and the KGB, we are used to this logic in the Mad Czar's and Mad Ayatollahs' realms, but now it is coming a little too close to home for comfort.

But why write about these things in a blog on Meltdown Economics and Other Complex Catastrophes? Well, I would classify what is happening as one of the classical complex catastrophes:
The Bureaucratic Black Hole
A complex organization (be it a government, a business, an international body, a union or an NGO) will always make mistakes ("stuff happens"), and will always be obsessed with preventing bad publicity about them from getting out. So its highest priority will be to cover its ass. It will become paranoid and need to control everyone on the inside and the outside. It will need to suppress dissent, bag whistleblowers, battle the press, spy on everyone and eliminate the threats of real or imagined enemies. It can become a black hole from which nothing escapes.

This is why in democracies we have constitutional checks and balances, separation of powers. This is why we have legal due process. This is why we have a free press. To nip the Bureaucratic Black Hole in the bud, to reverse its abuses before they become irreversible. Anybody still remember Locke or Montesquieu or Mill? Because the alternative is tyranny. I thought we held these truths to be self-evident. But now it seems that only fools like Bradley Manning and Edward Snowden still subscribe to them (the real weakness of American education: they still teach civics as if pupils are supposed to believe this rubbish – but then, hypocrisy is the tribute that vice pays to virtue).

The Independent's Turning of the Screw

But the Snowden/Greenwald/Miranda story just took a further Machiavellian turn in yesterdays The Independent. Potentially damaging state secrets are being leaked, and not by Snowden, it seems, although the leak is being made to look like he had. Under the headline
Exclusive: UK’s secret Mid-East internet surveillance base is revealed in Edward Snowden leaks
The Independent reveals the existence of a secret GCHQ facility in the Middle East that captures telecommunications from undersea fiber-optic cables and relays them for analysis to the GCHQ and the NSA. The article insidiously suggests that Snowden leaked this information, but a very close reading reveals that the authors are only insinuating that this kind of information must be part of Snowden's (still undisclosed) cache of data, not that Snowden has revealed it to The Independent, or anyone else for that matter.

And that is exactly what Greenwald and Snowden reply in The Guardian: neither he nor Snowden are the source of this information, and both have been exceedingly careful to avoid leaking anything that could harm anyone or damage legitimate national interests.

So who leaked this information and why? Since the purpose rather obviously seems to be to discredit Greenwald and Snowden as potential traitors and abettors of terrorism, one can only conclude that it is the UK government itself, a conclusion Snowden also comes to:
It appears that the UK government is now seeking to create an appearance that the Guardian and Washington Post's disclosures are harmful, and they are doing so by intentionally leaking harmful information to The Independent and attributing it to others. The UK government should explain the reasoning behind this decision to disclose information that, were it released by a private citizen, they would argue is a criminal act.
The Bureaucratic Black Hole working to the second power? Not for the first time have intelligence gathering and disinformation campaigns been compared to a House of Mirrors. But if the UK government is voluntarily leaking its crown jewels (which may not have been so crown or jewels, however) and wantonly damaging the ostensible national security in a silly and transparent attempt to take revenge on Greenwald and Snowden, who should be punished for treason? David Cameron and The Independent?

For history buffs there is a strange precedent for a newspaper leaking a vital national secret that might abet the nation's enemies, and the legal prosecution that followed: the Chicago Tribune's leak of Battle of Midway intelligence in 1942.  The Chicago Tribune was a fiercely anti-Roosevelt newspaper (and vice versa), but not unpatriotic. It revealed that the US Navy had advance knowledge of the disposition and intentions of the Japanese, which it exploited to overwhelming effect in the decisive Battle of Midway, knowledge that could only have been obtained (although the Tribune did not say this explicitly) by cryptanalysis of Japanese radio communications. In any but a narrow legal sense it was treasonous (the censorship rules at that time did not apply to leaking information about enemy plans, even if that information had been obtained by secret cryptanalysis, something which was soon changed). Fortunately for the US, Japanese intelligence did not deign to read the Chicago Tribune (or the Congressional Record, for that matter, where the affair had been discussed in open session), apparently falling victim to that other bureaucratic vice, closure, thinking their codes unbreakable. While the Roosevelt administration brought charges before a grand jury against the Chicago Tribune for treason, the Navy Department eventually pressed to have them dropped, since pursuing the case would have meant officially disclosing the cryptanalytic breaking of the Japanese codes. Something similar was involved in the persecution of the Rosenbergs for espionage. Although the case was not dropped, the decisive evidence based on the VENONA decrypts could not be revealed in the public record.

Is the Midway case an example of freedom of press, as the Tribune claimed at the time, or treason and potential disaster gone unpunished for even higher national security reasons? It differs from the Independent's case, so it seems, because the leak was against the government's wishes rather than in its Machiavellian interests (the Tribune's "embedded" reporter Stanley Johnston had accidentally seen Admiral Nimitz' secret message about Japanese dispositions on a ship returning from the Battle of the Coral Sea, something the Tribune did not acknowledge at the time and certainly was a violation of military secrecy*). It also was not disclosing secret information of public interest to right alleged government abuses, Snowden's and Ellsberg's defence. It was simply a scoop.

The Chicago Tribune has recently engaged in some self-reflection on its role in the Midway reporting 71 years ago following the Snowden revelations (but before the parallel Independent case), and while still unapologetic as to the treason charges, tends to the cautionary side about condemning whistleblowers and their supporting newspapers.

Final historical footnote on the House of Mirrors question: If you read Dina Goran's excellent paper (p. 681) on the Tribune/Midway scandal closely, you'll find another example of extreme Machiavellianism that the UK government might want to study further to hone its badly deteriorated skills. On Dec. 4, 1941 (three days before Pearl Harbor), the Chicago Times (also a vociferously isolationist paper) had published a scoop with Roosevelt's plans for Army mobilization. In turns out (only revealed in 1976) that the Tribune obtained a copy of those plans from a deliberate plant of the Political Warfare Department of BSC (British Security Coordination) and the FBI, apparently to discredit the isolationists!

*[Postedit 27 Aug 2013]: For more on how the Tribune's reporter Stanley Johnston may have obtained access to Nimitz' dispatch about the Japanese order of battle before Midway, see this Naval History site.

Are we getting sucked into the security state's Bureaucratic Black Hole?

Will we be manipulated into losing our way in the House of Mirrors?

Wednesday, August 21, 2013

Edward Snowden at the Mad Czar's Polonium Tea Party

The 'Creditanstalt' Intelligence Bureau has obtained an exclusive photo of NSA whistleblower Edward Snowden's life in his newly adopted country.

Snowden is shown here being entertained by his hosts at the posh Pine Bar of the Hotel Lux in the manner befitting his political status.

Mad Czar (standing on the right): Take some more sugar with your Polonium* tea, dear?

Edward Snowden (seated at left): How can I take more sugar when all the sugar was used up in Ryazan*?

*Guide to the perplexed: the 'Creditanstalt' Intelligence Bureau recommends this site for background material and a documentary video, as well as John Dunlop's site for the most recent in-depth analysis and David Satter's recent ruminations [postedit 13.9.2016].

The 'Creditanstalt' is an equal opportunity satirical website.

Tuesday, August 20, 2013

"You've had your fun. Now we want the stuff back." The Surveillance State Crosses the Rubicon and Starts Playing Harddrive

     "You've had your fun. Now we want the stuff back."

This is how a high representative of the UK's government threatened The Guardian's editor, Alan Rusbridge, to get back the NSA material Edward Snowden has been leaking to The Guardian's reporter Glenn Greenwald.

But now the surveillance state really seems to have crossed the Rubicon. Not only have British authorities subjected Greenwald's Brazilian companion David Miranda to nine hours of illegal interrogation under schedule 7 of the Terrorism Act while in transit through Heathrow Airport, but according to Rusbridge they have also started playing "harddrive" with The Guardian:
And so one of the more bizarre moments in the Guardian's long history occurred – with two GCHQ security experts overseeing the destruction of hard drives in the Guardian's basement just to make sure there was nothing in the mangled bits of metal which could possibly be of any interest to passing Chinese agents. "We can call off the black helicopters," joked one as we swept up the remains of a MacBook Pro.
The surveillance state really seems to have finally crossed the Rubicon here, where it is no longer protecting us, the citizens, but primarily itself (although early NSA whistleblower William Binney's 2007 arrest by the FBI at gunpoint in the shower may be the first adumbration of such a crossing). Although who is having fun at whose expense is unclear, since if the GCHQ "security experts" really thought they had plugged the security leak by physically destroying some hard drives they were displaying gross incompetence in this digitally networked age (more likely they were just trying to live up to the intimidating goons from all the Hollywood action films they watch down there in Cheltenham on boring winter evenings).

Lord Acton was right: power corrupts, and absolute power corrupts absolutely. A surveillance state that has the ability to monitor all of its citizens without constitutional due process will sooner or later deliberately abuse that power for its own ends, if only to cover its own ass that it has this secret and unconstitutional power in the first place. The nightmare of human rights activists and NSA whistleblowers has come true, and the Orwellian chickens have finally come home to roost. The era of star chambers (think FISA court) and lettres de cachet (think section 7), when rulers could arbitrarily arrest and torture their subjects at their whim according to edicts that no one could even know, let alone challenge in a court of law, seems to have returned with a vengeance.

Meanwhile, back here at this blog, I have also been "having my fun" at the NSA's expense with my satirical blogs about the NSA's SWIFT program (see posts 1, 2, 3, 4, in case you missed them).

But this is getting really serious, and the threat to freedom of speech and the press is no longer a joking matter. So in the possibly few remaining moments of freedom still vouchsafed us I will indulge my satirical evil demon one last time and give you the 'Creditanstalt' Intelligence Bureau's take on the Miranda scandal:

The Inside Story on the David Miranda Interrogation: Nine Excruciating Hours on the Loo

While it is clear that David Miranda, Brazilian companion and sometime courier for Guardian reporter Glenn Grennwald, was not legitimately detained by British authorities at Heathrow airport last Sunday under schedule 7 of the Terrorism Act, it has been a mystery until now why he needed to be detained for all of the legally permitted nine hours if the authorities really only wanted to confiscate his electronic devices.

The 'Creditanstalt' Intelligence Bureau has now learned the real reasons for this long detention. While the Metropolitan Police Service (MPS) claims that Miranda had been offered legal representation and was attended by a solicitor, in fact he was attended to by renowned British physician John Wesley (a contemporary of our beloved Jonathan Swift and author of the standard textbook Primitive Physick Or an Easy and Natural Method of Curing Most Diseases), who attempted to apply his acclaimed purgative to extract data thumb sticks Miranda had hidden in private parts of his person. Informants tell us, however, that Miranda was so constipated from his flight from Berlin that the process was not complete even after the nine hours permitted by the law.

However, the MPS did manage to obtain small samples of stool that have now been shipped to the NSA's reactivated Kellogg laboratories for analysis. By drawing on all of the NSA's SWIFT program resources, the MPS hopes to be able to determine whether Miranda does in fact entertain insurrectionary thoughts that would permit the retroactive application of section 7 of the Terrorism Act and justify his detention.

Noted British physician John Wesley (left) preparing to apply
his celebrated physick to our hard-won civil liberties (right) at the Heathrow Transit Lounge.

Saturday, August 17, 2013

NSA's SWIFT Program Draws on Secret Kellogg's Laboratory Research Tradition

Rare historical photo of the Kellogg fecal analysis laboratory, early 20th century, in Battle Creek, Michigan (from Madhouse: A Tragic Tale of Megalomania and Modern Medicine, by Andrew Scull, Yale University Press, 2005,  p. 85, courtesy of Google Books).

In response to our Freedom of Information Act request, the US government has now revealed that the NSA's SWIFT surveillance program (see our previous reports 1 and 2) has been drawing on a long subterranean American tradition of fecal analysis going back to John Harvey Kellogg, the famous inventor of breakfast cereals and avant-garde health reformer of the early 20th century (see above book excerpt). This revelation ranks with the CIA's recent acknowledgement of the existence of Area 51 for U-2 spy plane testing during the 1950s as a revolution in our understanding of conspiratorial Americana.

Kellogg's sanatorium at Battle Creek emphasized a healthy intestinal flora (a subject medical experts have only rediscovered recently with Fecal microbiota transplantation (FMT), also known as stool transplants), the proper care of which through hydro and yoghurt enemas would lead to a "squeaky-clean intestine."

What was not known until now is that Kellogg's fecal laboratory, inspired by the early work of 18th century neuro-fecal pioneer Jonathan Swift, was also engaged in classified research on fecal thought analysis in cooperation with the American Secret Service. The Secret Service, after failing to prevent the assassinations of presidents Lincoln and McKinley, hoped to be able to detect and preempt future plots against the president on the basis of mass screenings of municipal sewage. However, the primitive state of American waste disposal at the time resulted overwhelmingly in the identification of dray horses as the 'usual suspects.' This brought the Secret Service into conflict with the ASPCA due to their harsh water-boarding interrogation methods, so the project ultimately had to be abandoned.

Early "horseboarding" interrogation techniques rightly outraged Americans' humanitarian instincts, and led to the abandonment of the program.

In returning to this line of research with modern methods, the NSA hopes to overcome these limitations and perfect the surgical identification of fecal plotting signals by separating the wheat from the dray.

Remember: Every bowl of Kellogg's Corn Flakes™ you eat contributes in its own little way to the War on Terror.

Friday, August 16, 2013

Snidpets*: Essays in Economic Biography, Part I

The persistence of a traditional press corp still unable to do their fact checking on the Wikipedia has induced the 'Creditanstalt' to issue the following press release with more extensive details about the qualifications of the members of our Monetary Advisory Committee.

Distinguished Members of the 'Creditanstalt' Monetary Advisory Committee: Snidpet Biographies, Part I

Eugen von Böhm-Bawerk (1851 – 1914)

A recent resurrection from the grave to our committee, Böhm-Bawerk, like Schumpeter, was Austrian Finance Minister intermittently from 1895 until 1904. His legacy as finance minister is disputed: while economic historian Alexander Gerschenkron criticized his "penny pinching, 'not-one-heller-more-policies'," and lays much of the blame for Austria's economic backwardness on Böhm-Bawerk's unwillingness to spend heavily on public works projects, Joseph Schumpeter praised Böhm-Bawerk's efforts toward "the financial stability of the country." Thus his main claim to membership in the committee must remain the fact that his visage is the only one to have graced an actual banknote (the Austrian 100 Schilling):

Böhm-Bawerk has the distinction of being the only one of the committee members whose visage has graced an actual banknote, thus incontrovertibly establishing his position as an eminent monetary economist.

His theory of capital emphasized "roundaboutness" as a source of increasing wealth, and he was a fierce critic of the labor-theory-of-value foundations of Marxism. He has been called Austria's second greatest economist after von Mises by George Reisman, who also states that von Mises would have considered him the greatest (so much for the consistency of preferences).

Professor von Böhm-Bawerk demonstrating the superiority of roundabout methods of production at his Viennese Stammlokal Cafe Central, where he rubbed elbows with his Marxist nemeses Trotsky and Stalin.

Friedrich von Hayek (1899 – 1992)

Friedrich von Hayek was the greatest advocate of the liquidationist school of business cycle theory. He received the Nobel Prize in Economics in 1974. Building on his Viennese colleague Böhm-Bawerk's (see entry above) concept of the "average period of production," Hayek blamed the business cycle on excessive investment in the expansion phase due to the inflationary effect of too low interest rates set by the central bank, followed by a period of 'liquidation' to eliminate redundant business enterprises and capital. Until the natural purgative of liquidation had been completed, he argued, the economy could not revive. This strongly influenced policymaking at the time, particularly the US Treasury Secretary under Hoover, Andrew Mellon, and had strong connotations of self-flagellating penance for previous profligacy, an attitude well known in the Judeo-Christian moral tradition.

In contrast, his principle nemesis Keynes considered a deep depression to be simply analogous to a broken magneto in a car which should be repaired according to the best engineering practice and not moralized about and accepted as unavoidable fate. Thus in Hayek's view, presumably, the Great Depression of the 1930s was caused by excessive investment in railroads and vaudeville theaters in the 1920s, and could not be overcome until these had been driven into bankruptcy and scrapped by the depression to make way for automobiles, airplanes, radio, TV and the talkies (his fellow Austrian capital-theorist Schumpeter might have put the causality the other way around).

In the event, the railroads did not need to be scrapped (although the same could not be said of the vaudeville halls), and recovery in the 1930s was driven quite effectively by the ultimate inflationary liquidationist investment –  armaments (and to a lesser extent civilian infrastructure and housing).

Hayek has subsequently become the darling of both right-wing libertarian thinkers and naive believers in the self-organizational information processing capabilities of unfettered markets. 

Hayek's best-known book is The Autobahn to Sausagedom (1944; 1955 American edition: The Interstate to Obesity), where he denounced central planning (the "nanny state") as incompatible with individual freedom of waistlines. It was a major influence on Milton Friedman's 1980 bestseller Free to Lose (UK Margaret-Who? edition: Free to Gain, often erroneously cited as Free to Maim), who otherwise thought Hayek's Prices and Production a very flawed book and his Pure Theory of Capital unreadable

Irving Fisher (1867 – 1947)

Fisher has been called "the greatest economist the United States has ever produced" for his famous 1929 prediction just before Black Friday that the stock market had reached "a permanently high plateau" (which was undoubtedly much more accurate than Glassman and Hassett's similar 1999 prediction of "Dow 36,000" – the 'Creditanstalt' places a high value on the accuracy of economic forecasts!). In contrast to modern bonus-guaranteed bankers (and like Schumpeter, see below), he had skin in the game and subsequently lost most of his substantial personal wealth. He made amends with his 1933 theory of debt deflation, though this was eclipsed by Keynes' General Theory (which seems strangely fitting for a theory of deflation). He brought the quantity theory of money up to date, and made major contributions to general-equilibrium (including an innovative design for a nifty hydraulic analog app) and capital theory (e.g., contesting Böhm-Bawerk's theory of "roundaboutness," see above, a critique that later received support from Paul Samuelson).

Fisher's hydraulic computer for calculating equilibrium prices, which he actually built and used in lectures, from his 1891 Yale PhD thesis. Compare the elegance of this design with Böhm-Bawerk's contemporary 'roundaboutness' machine (above).

Fisher was also a strong believer in the "focal sepsis" theory of physician Henry Cotton (as well as eugenics, prohibition, and Kelogg's vegetarianism and fecal analysis  NSA-SWIFT take note!) and had numerous sections of his schizophrenic daughter Margaret's bowel and colon removed in Cotton's clinic, eventually resulting in her death (see Madhouse: A Tragic Tale of Megalomania and Modern Medicine by Andrew Scull)  another confirmation of Keynes' dictum that "Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back. I am sure that the power of vested interests is vastly exaggerated compared with the gradual encroachment of ideas."

Joseph Schumpeter (1883 – 1950)

 Schumpeter established his monetary credentials during a brief stint as Austrian Finance Minister in 1919 at the onset of the hyperinflation, and as president of the private Biedermann Bank, whose bankruptcy in 1924 also ruined him personally, forcing him to take day jobs at such provincial universities as Bonn and Harvard. His great ambition in life was to be the world's best economist, best horseman, and best lover, but to this day there is still no consensus about which if any he achieved. He turned the liquidationist school (see Hayek entry) on its head by declaring "creative destruction" to be the paramount disequilibrium virtue of capitalism. He was highly influenced by and a secret admirer of Marx (whether Groucho, Chico or Karl is unclear) and Charlie Chaplin in The Great Dictator. But he was also a great detractor of Keynes, whom he never forgave for overshadowing him as a lover (at least according to Niall Ferguson) and financial speculator (horsemanship was apparently no contest).

Part II of Snidpets of Economic Biography will appear shortly and cover the remaining members of the 'Creditanstalt' Monetary Advisory Committee:

Michael Kalecki (1899 – 1970)
John Maynard Keynes (1883 – 1946)
Carl Menger (1840 – 1921)
Ludwig von Mises (1881 – 1973)
Oscar Morgenstern (1902 – 1977)
John von Neumann (1903 – 1957)

*The word "snidpet" is a neologism amalgamating the two words "snide" and "snippet" (Snidpet = Snide + Snippet), and is hereby copylefted © by the 'Creditanstalt,' Anstalt des öffentlichen Aborts.

Thursday, August 15, 2013

Who Are Those Masked Men on the 'Creditanstalt' Monetary Advisory Committee?

I have been repeatedly asked about who serves on the 'Creditanstalt' Monetary Advisory Committee (MAC) that recently supported the nomination of Janet Yellen over Larry Summers for the chairmanship of the Board of Governors of the US Federal Reserve, and what are their credentials?

At the 'Creditanstalt' we have a strict policy of only inviting dead economists of the highest international standing to serve on our committees, in accordance with the recommendations of Representative Paul Ryan, US Congress, who has recently been promoting Milton Friedman (†2006) for the Fed chairmanship (even though he is not an Austrian but still very much dead).

Currently, the members of the MAC are drawn from the greater Vienna community as well as leading foreign economists:

Irving Fisher (1867 – 1947)
Friedrich von Hayek (1899 – 1992)
Michael Kalecki (1899 – 1970)
John Maynard Keynes (1883 – 1946)
Carl Menger (1840 – 1921)
Ludwig von Mises (1881 – 1973)
Oscar Morgenstern (1902 – 1977)
John von Neumann (1903 – 1957)
Joseph Schumpeter (1883 – 1950)

It has been our experience that these distinguished economists have a much easier time reaching a consensus in the afterlife than they ever did during their often highly contentious lifetimes.

Meetings of the 'Creditanstalt' Monetary Advisory Committee take place at the Vienna Central Cemetery and are occasions for high pomp and circumstance. Shown here is the quantity theory of money being taken to its ultimate resting place (in the long run burial plot for defunct theories).

Wednesday, August 14, 2013

What Does Germany Want, Revisited

Timothy Garton Ash has a very conciliatory piece in the New York Review of Books on The New German Question. This gave me an opportunity to revisit my December 20, 2011 blog What does Germany want (and why she can’t have it)? in a letter to the editors I wrote last Sunday:

To the editors:

Timothy Garton Ash (NYR,  August 15, 2013) has given a very judicious and balanced account of Germany’s dilemma at the eye of the Euro storm. And as a non-economist he should be especially commended for touching all of the relevant economic bases.

In the end, however, he stops just short of connecting all of the dots, preferring to concentrate on the admittedly important governance issues, and fails to draw the inevitable conclusion, namely, that the two cornerstones of Germany’s highly successful economic model are incompatible with the survival of the Eurozone and the welfare of its other members.

These cornerstones are, first, Germany’s well-known principled refusal, or shall we say, grudging and last-minute minimal capitulation, to a certain amount of mutualization of risk (Eurobonds, banking union) necessary to overcome the centrifugal tendencies inherent in an incomplete currency zone such as the Euro (see the work of the London School of Economics’ Paul de Grauwe for an exposition of this self-destructive tendency, as well as George Soros in these pages). The European Central Bank’s President Mario Draghi has had to unilaterally (although probably with Merkel’s implicit acquiescence) step into the breach with his OMT “whatever it takes” program to effect a “perils of Pauline” rescue. While Draghi plugged the rapidly eroding dike of Euro collapse last summer with the use of only his thumb, so to speak (expending no funds whatsoever in support of peripheral creditworthiness), the Bundesbank, spearheaded by its resolute President Jens Weidmann, in the venerable German tradition of Heinrich von Kleist’s overrighteous avenger Michael Kohlhaas, has still seen fit to take the ECB to the German Constitutional Court to challenge the compatibility of OMT with the ECB’s mandate. As Garton Ash rightfully point out, many Germans are still obsessed with the 1923 hyperinflation rather than the much more relevant 1931/2 Brüning austerity episode of their own tragic history.

Even more important, it seems to me, is Germany’s attachment to the second cornerstone – running 6% current account surpluses year after year in the name of “competitiveness.” Everyone is in favor of “competitiveness,” whatever that means, but current accounts are globally a zero sum game. If the rest of the Eurozone becoming more like Germany means that the entire Eurozone should run 6% current account surpluses with the rest of the world, we are in real trouble. Not only will the other major trading partners (US, UK, China, Japan, the developing world) never accept this, it is really a form of beggar-thy-neighbor policy because it pushes the necessity of generating effective demand for full employment unto the shoulders of others. Remember, Germany re-attained its much admired “competitiveness” since 2000 for the most part (though not exclusively) by forcing its real wages to grow more slowly than its productivity, lowering its consumption share to a level incompatible with long-term macroeconomic stability. This is not something every nation can indulge in (even China) without triggering a collapse of global effective demand – the US (or Spain, Ireland, Portugal and Greece for that matter) cannot play consumer of last resort forever. That this is really the heart of contemporary Germany’s economic DNA comes out clearly in Jens Weidmann’s 2012 speech at the Bank for International Settlements.

There are few apparent solutions to this inner-European current accounts imbalance short of Euro breakup, reevaluations and default. The present austerity and “internal devaluation” policy of the European Commission attempts to right the deficits of the debtor Euro periphery by slashing government spending (including on education, infrastructure and R&D) and lowering wages by means of mass unemployment levels not seen since the 1930s (all the time swinging the censer of nebulous “structural reforms”), while hopefully leaving the surpluses of the core countries and the stability of their banks untouched. While after a period of immense social misery this could restore “real exchange rate” export competitiveness, it is more likely to undermine than enhance their technological competitiveness and human capital in the long run (not to mention encourage the emigration of their best and brightest). Or the core could recycle its surpluses with unending bailouts (the “Transferunion” Germans so rightly fear, in the worst case just creating more Italian Mezzogiornos), or, on a more positive note, by investing in an EU Marshall plan. And finally, the core,  primarily Germany, could lower its current account surplus by increasing domestic consumption via higher wages, and raising internal investment, thereby sucking in imports from the rest of the Eurozone. An astute policy of a weak Euro would even allow Germany’s competitiveness with respect to the rest of the world to remain unchanged while this mutually beneficial rebalancing took place.

However, the fetish of the strong DM has been replaced by the idolatry of Germany’s Euro current account surplus. And while Germany has done quite well with this policy, it still has not sunk in that it is fundamentally incompatible with the survival of a healthy Eurozone. Even the Netherlands (not to mention France), a core Eurocore state, is being forced to abandon the austerity ship. Germany’s present stance, even if light years better than its Wilhelminian and Hitlerian precedents, is essentially predatory, masquerading as housewifely morality. Unfortunately, no amount of tinkering with EU governance will succeed until these fundamental issues are addressed.

Gerald Silverberg
Vienna, Austria

At Byzantine Banking Central: Summers vs. Yellen is a No Brainer

"Look, if you can't stand the Byzantine intrigue, perhaps you should get out of the cabal."
(Warren Miller/The New Yorker)

The claqueurs of Larry Summers (and to a lesser extent Janet Yellen) have been rustling the pages of the media (and presumably backroom connections, with President Obama playing coy) for their candidate for the chairmanship of the Federal Reserve Board, but not without a backlash, particularly at the New York Times.

Thus Paul Krugman has already come out for Yellen or against Summers, as has Maureen Dowd in today's op-ed The Summers of Our Discontent.

The 'Creditanstalt' monetary advisory committee has now unanimously decided on a recommendation and issues the following press release:
Appointing Janet Yellen is a no brainer - she is experienced, a top economist, personable and confidence inspiring. So why are we even debating Larry Summers, who is only some of these things, but comes with the toxic baggage of repeatedly putting his foot in his mouth going back a long way (remember the 1991 third-world toxic wastes memo - now the object of intense NSA-SWIFT scrutiny?).
Nevertheless, in his current Saul-to-Paul incarnation Summers has converted from the religion of deregulation to the slayer of the austerity dragon while expressing scepticism about the efficacy of quantitative easing. Brad de Long breaks a lance for Summers in the Financial Times and on his blog/NY Times: "Larry Summers has an edge as the most creative thinker likely to successfully think outside the box should outside-the-box thinking be called for." 
The 'Creditanstalt' monetary committee thinks that outside the box is precisely where Larry Summers belongs, and where he can make the best contribution to economic science and policy making. Being inside an institutional box, whether the World Bank, the Treasury, or the Presidency of Harvard, has never really suited him. Thus appointing Janet Yellen to the Fed chairmanship, in the quaint American expression, is simply a no brainer.
Vienna, August 14, 2013

Friday, August 9, 2013

Breaking News: Mass NSA Dismissals Confirm 'Creditanstalt' July 28 Prediction!

Reuters reports today that the National Security Agency (NSA) intends to dismiss 900 of its 1000 system administrators, in line with our prediction in our July 28 blog "Forget PRISM":
The NSA now proposes to fire its thousands of mathematicians and computer scientists and replace them with low-wage medical laboratory technicians rendered unemployed by the ongoing Great Recession (this is the real reason Edward Snowden decided to get out of the business now).
Reuters reporter Jonathan Allen claims that this action results from former NSA system administrator Edward Snowden's revelations:
The National Security Agency, hit by disclosures of classified data by former contractor Edward Snowden, said Thursday it intends to eliminate about 90 percent of its system administrators to reduce the number of people with access to secret information.
People have begun to question what the symbolic meaning of these domes left behind by the NSA in Germany really is.

However, the 'Creditanstalt' intelligence bureau's informants continue to maintain that the real reason for the mass dismissals is the replacement of the NSA's ill-fated PRISM and other computer-science-based projects by SWIFT, based on impeccable neuro-fecal foundations (see previous blog for details on how SWIFT will work).

General Keith Alexander, the director of the NSA, unwittingly let the cat out of the bag at the press conference with his remark that "We've got to push out more, I recognize that."

His other main security change - the so-called two-man rule that no one can go to the bathroom unaccompanied - has also proved highly unpopular among remaining NSA employees, with female employees even raising accusations of sexism.

Remember: You heard it first on this blog!

Monday, July 29, 2013

'Creditanstalt' Exclusive: How the NSA's SWIFT Program Will Work

President Obama giving the green light for the NSA's new SWIFT program (photo courtesy of creative photoshopping at

The 'Creditanstalt' intelligence bureau has obtained exclusive access to the Presidential Directive recently issued by President Obama authorized the National Security Agency (NSA) to proceed at maximum speed in implementing its new SWIFT Program, the replacement for the disgraced and ineffectual PRISM Program recently outed by whistleblower Edward Snowden (see yesterday's report).

To avoid the dysenteric decision problem well known to mathematical logorrheaticians (see e.g. the classic paper by Alan Turding, "On computable flushings, with an application to the Abscheidungsproblem," Proceedings of the London Fecal Matter Society, Ser. 2, Vol. 42, 1937), the NSA intends to implement a clever branch-and-bound algorithm to zero in efficiently on target DFTs (this codeword has been variously deciphered as 'de facto troublemakers' and 'defecating terrorists' by our informants) while respecting US constitutional principles.

To simplify, NSA agents will first take samples from the top-level discharge sewers (see photos below) to determine if any subversive activity is taking place in a given municipality. While this encompasses discharges from all individuals in the region, the Foreign Intelligence Surveillance Court (FISA) has ruled that it does not violate the constitutional prohibition on unwarranted searches, nor does it store metamatter (e.g., anal identifiers), the chief weakness of the PRISM program.

NSA specialists taking samples from the highest-order domains.

If a subversion alarm is triggered, the NSA will then sample feed-in lines to close in on the source, using the branch-and-bound algorithm to minimize expenditures while preserving effluent anonymity.

Early NSA experiments with branch-and-bound algorithms in the 1950s, like the CIA's experiments with LSD, proved misguided and had to be covered up.

Recursive application of the method will allow the NSA to zero in on the guilty party in exponential time without violating the privyacy of the general population.

Improved version of the branch-and-bound algorithm developed at Indiana University will allow the NSA to rapidly target the guilty DFT. The names of individuals in this case study have been changed to zoological classes to respect privyacy.
An advanced projects subgroup at NSA has been experimenting with video surveillance and fecal recognition software. However, it is still unclear whether the FISA court will find this consistent with the fourth amendment's constitutional requirement for public analymity.

The NSA has already begun visual acquisition experiments at various locations in the USA, even though the FISA court has not yet ruled on their constitutionality (photo courtesy of Spiegel Online).

NSA fecal recognition software still has trouble differentiating elephant dung (top) from bear scat on apple diet (below; photos courtesy of Wikipedia Commons). The NSA has refused to release its human feces archive on national security grounds.