Thomas Piketty who? Another fallacy.

As I have previously informed you, the progressive/statist/altruists are all a-twitter about the best-selling book by Thomas Piketty, the French socialist and economist, entitled Capital in the Twenty First Century. Piketty espouses very high taxes on the rich, an additional wealth tax, and redistribution by egalitarian means. The book is likely a best seller because every liberal politician on the globe bought it and plans to adopt it as his/her bible (they don’t otherwise have a bible). They haven’t been this excited since they adopted Keynesian economics to justify massive federal deficits.

But wouldn’t you just know it. The progressive/statist/altruists’ orgasmic bliss has been interrupted by a 26-year-old graduate student in economics named Matthew Rognlie. Even more interesting is that this young man posted it as a response in an economics blog site called Marginal Revolution. Still more interesting, he posted his opinion at 2:45 AM (if you go to the website you’ll need to scan down to find his response). Thus begins the unlikely story of, arguably, the most-influential critique of the most influential economics book of this century (of course, the “century” is only 15 years old). He was asked to present an invited paper at the prestigious Brookings Institution (not exactly a bastion of conservative thought). As a longtime academic, I can tell you that invited papers at prestigious universities and think tanks are highly unusual.

[Source: Meet the 26-year-old who’s taking on Thomas Piketty’s ominous warnings about inequality, by Jim Tankersley]

Piketty had worried in his book that wealth inequality could soon explode at such a velocity that it would continue to widen essentially on autopilot. Wealthy people would accumulate more capital in the form of stocks, real estate and other assets, would continue to earn high returns on them, and then would have more capital to invest. As more and more money became concentrated among the wealthy, less and less would be available to workers. The book turned Piketty into an international celebrity.

Rognlie, however, wrote in his blog post that the French economist’s argument “misses a subtle but absolutely crucial point.” Piketty, he said, might have got the pattern in reverse. Instead of the returns to capital increasing in perpetuity, Rognlie said, they might be poised to decline.

With that quick post, Rognlie was challenging the most politically earthshaking prediction about inequality and the economy in recent memory.

The comment blossomed into a near-unprecedented career opportunity for a student who just recently turned 26 years old, and who remains a year away from earning his doctoral degree. It will culminate… at the Brookings Institution in Washington, where Rognlie will present a research paper before an often-cutthroat audience of all-star economists, including a Nobel Prize winner, Robert Solow, who will critique Rognlie’s analysis.

Organizers say it will almost certainly be the first paper at the prestigious Brookings Papers on Economic Activity that was commissioned based on a blog comment. It is also a rare honor for a graduate student to present a sole-authored paper there; a quick scan of Brookings records shows a similar appearance by the now-renowned economist Jeffrey Sachs when he was a doctoral student in 1979.

“It’s made Matt famous,” said Tyler Cowen, the George Mason University economist who runs the Marginal Revolution blog, and who elevated Rognlie’s comment into a standalone post on his site. “It was brilliantly reasoned and right on target. And very elegant.”

There are two concepts at the heart of Rognlie’s Brookings paper.

One is that Piketty drew too broad a conclusion about the nature of capital in this era than he should have based on the evidence. Piketty assumed that the returns to capital were increasing across the economy. Rognlie found the trend to be almost entirely isolated to the housing sector…

The second  finding was that Piketty probably overestimated how high the returns to capital would be in the future. For his fears to come true, wealthy people who amass more and more capital would need to keep earning a high return on that capital. But, Rognlie’s research suggests, the returns to capital will decline over time… (using) history (as) a guide, the wealth-inequality autopilot will slow itself down over time.

“Piketty’s story has multiple steps to it. I’m sort of showing that one of the steps does the reverse of what he says it does,” Rognlie said in an interview. Those findings, he added, suggest “there doesn’t seem to be a big need for panic” over Piketty’s predictions…

Justin Wolfers, the University of Michigan economist who co-chairs the Brookings confab, said Rognlie’s critique was “easily the clearest” one of Piketty that he had read. “As I read the paper,” he said, “I found myself learning about stuff that I should have known.”

Yet again, the need of socialists to validate their idiot notions of “fairness” leads them to propose spurious arguments.

Roy Filly

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Why is income inequality bad?

How much income “equality” do our American progressive/statist/altruists want? If they really are altruists then their desire for “equality” in all its many guises should pertain to every living human on the planet. But, let us look at a concrete example from America. If altruists desire “equal pay for equal work” for a Mexican who crossed our border or a Chinese who endured a journey in a cargo container to enter our great nation illegally, then certainly one must consider whether if that same person were instantly transported back to their home nation would they then loose the right to “equal pay for equal work?” And whose “equal” or what definition of “equal” would we be talking about?

As I have stated in multiple prior posts, “equal pay for equal work” is a fundamentally impossible calculation. But more important is that unequal pay is the principle on which this nation was founded. If you come to our shores and work hard you can exceed what you had in Mexico/China/Italy/Ireland/India. How many people would have come to our shores if the promise had been, “If you work hard Mr. Irishman you can achieve exactly the same pay that you could get in Ireland?” The whole notion of “equal pay for equal work” is idiotic, but it is a good sound bite for progressive/statist/altruists speaking to a segment of our population that has never thought through the issue (or really any issue).

[Source: How income inequality benefits everybody, by George F. Will]

Unequal pay is far preferable to equal pay for many reasons. Altruists are not allowed to be selfish. Ask any altruist you know if they ever purchased an iPhone or Nikes? It’s a little hard to claim you are an altruist when benefitting from “unequal pay.”

Every day the Chinese go to work, Americans get a raise: Chinese workers, many earning each day about what Americans spend on a Starbucks latte, produce apparel, appliances and other stuff cheaply, thereby enlarging Americans’ disposable income. Americans similarly get a raise when they shop at the stores that made Sam Walton a billionaire.

Unlike royalty, being wealthy is not a birthright.

The ranks of billionaires are constantly churned. Most of the people on the original Forbes 400 list of richest Americans in 1982 were off the list in 2013. Mark Zuckerberg, Facebook’s chief executive, was not born until 1984. America needs more billionaires like him, Michael Dell, Bill Gates, Jeff Bezos and Steve Jobs.

Progressive/statist/altruists hate “monopolies.” But they were wrong when they made “monopolies” illegal and they are wrong today. They used as their excuse that the Robber Barons holding monopolies could raise prices on the unsuspecting populace. But is that what happened?

With the iPod, iPhone and iPad, unique products when introduced, Jobs’s Apple created monopolies. But instead of raising their prices, Apple has cut them because “profits attract imitators and innovators.” Which is one reason why monopolies come and go. When John D. Rockefeller began selling kerosene in 1870, he had approximately 4 percent of the market. By 1890, he had 85 percent. Did he use this market dominance to gouge consumers? Kerosene prices fell from 30 cents a gallon in 1869 to 6 cents in 1897. And in the process of being branded a menacing monopoly, Rockefeller’s Standard Oil made gasoline so cheap that Ford found a mass market for Model T’s…

As well, Robber Barons are in no better position to control wages than any other entrepreneur.

Henry Ford doubled his employees’ basic wage in 1914, supposedly to enable them to buy Fords. Actually, he did it because in 1913 annual worker turnover was 370 percent. He lowered labor costs by reducing turnover and the expense of constantly training new hires…

Importantly, Mr. Will’s article and the data within are derived from John Tamny’s new book. Mr. John Tamny is a one-man antidote to economic obfuscation and mystification. Tamny is Forbes editor of RealClearMarkets. His book, “Popular Economics: What the Rolling Stones, Downton Abbey, and LeBron James Can Teach You About Economics” has moved up on my reading list following George Will’s synopsis.

Progressive/statist/altruists detest, despise and otherwise abhor “outsourcing.” But “outsourcing” is not “bad” in its essence.

Actually, Americans incessantly “outsource” here at home by, for example, having Iowans grow their corn…, jobs at which Iowans… excel and the rest of us do not… The lesson, says Tamny, is that individuals — and nations — should do what they do better than others and let others do other things… Millions of jobs, he says, would be created if we banned computers, ATMs and tractors. The mechanization of agriculture destroyed millions of jobs performed with hoes and scythes. Was Cyrus McCormick – founder of what would later become the International Harvester Co. – a curse?

My friends, the progressive/statist/altruist arguments against free markets and capitalism are specious, casuistic, fallacious… it is sophistry at its worst! It is worse than “just plain wrong.” It is illogical!

Roy Filly

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Two headlines from today that show the ineptitude of Obama foreign policy.

Today in the Washington Post you can read two separate articles that prove conclusively that our President is clueless about war, the Middle East, Sunnis and Shias, and likely a host of other things when it comes to foreign policy. Name a Middle East nation that is our enemy! Likely your first thought was Iran. Name a Middle East Arab nation that is our ally. There were a few choices here but Saudi Arabia was certainly near the top of your list of choices. Below are the two headlines:

Saudi Arabia targets strategic areas around Yemen in heavy bombardment, by Ali al-Mujahed and Brian Murphy.

U.S. forces begin airstrikes in Tikrit, where Iran-backed militias are in lead, by Loveday Morris, Karen DeYoung and Missy Ryan.

Our President touted Yemen as a strategic partner in the war on Al Qaeda just months ago. Now, in something that has never happened in my recollection our special forces had to skedaddle out of Yemen (the most feared warriors in the world – possibly the most feared ever in the history of warfare had to skedaddle). So did our embassy and virtually every American in that troubled nation. In the meantime, Saudi Arabia (our ally) launched intense airstrikes in Yemen (our “ally”) targeting key sites including the country’s main airport, as part of a bold Arab-led offensive to weaken powerful Shiite rebels who have put the country’s president on the run (and, naturally, we are supporting in Shiite militias in Iraq. Note the subtle difference here – “rebels”/”militias”).

The attacks plunged Saudi Arabia and its Arab allies into the deepening crisis in Yemen after a Shia “rebel” advance forced the country’s Western-backed president (i.e., backed by our President) to flee (see footnote) and left the Shiite insurgents (note that somehow we distinguish between “insurgent” Shias and Shia “militias”), known as Houthis, on the brink of claiming control of the country’s two largest cities.

Moving on to headline number two, U.S. warplanes began striking Islamic State forces (Sunnis, like our Saudi allies) in and around the Iraqi city of Tikrit drawing the United States directly into a battle that has pitted militants (those would be Sunnis, like the Saudi Arabians) against Iraqi forces dominated by Iranian-backed Shiite “militias” (but, not Shiite “insurgents”).

Did you get all that?!?!?! And did you ever hear the term “bass ackwards?”

Roy Filly

Footnote:

Recently deposed Yemeni President Abdu Rabu Mansour Hadi escaped house arrest in the country’s capital fled to the southern province of Aden, where he is expected to withdraw his resignation in a televised speech. Hadi resigned under pressure from Houthi “rebels” in the capital, Sanaa, last month, fled with the help of forces loyal to him at about 4 a.m., one of his advisers said on condition of anonymity. This was President Obama’s ally!

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It’s those demographics again!

With the Republican primaries heating up, once again one of my few disagreements with the Tea Party wing of the GOP will become evident in my posts. We are not now and never will deport 12 – 20 million illegal aliens from our lands. It is neither technically possible, rational, or humane. There is no other option but to agree upon some path to legal status.

The average bus has 47 seats. That would mean that at the very minimum we would need to fill more than a quarter million buses with people and send them… Oops. Where do we send them? Home? Back from where they came? Do you think the Mexican authorities will simply allow us to drop off 12 million people at the border and have them process them according to their laws? How about Canadian authorities? Do we sort out where the original home nation of these 12 million people was and put them on planes to fly them back? Without passports! These tactical issues are more than daunting. They are impossible. And what would the world be saying of us as we went through this process?

[Source: Will Hispanics fire up America? by Michael Barone]

As all of my Italian cousins would say, “Fa’ ged aboud it!” Not only is it wrong-minded, we would be shooting ourselves in the foot! The Economist Magazine recently wrote the following: “America is lucky to have millions of energetic young people filling its schools with kids who will eventually pay taxes and fund pensions and health care for the old,” The Economist further states. “Like other immigrants, they talk a lot about the American Dream. By that they mean the baby boomers’ hopes of home ownership, a college education and upward mobility.”

Yes, it is true that Hispanics have not moved upward as rapidly as some other immigrant groups. However, none of those other immigrant groups were constantly under the treat of deportation. They weren’t constantly hiding in shadows. If you want people to “integrate” into your society, you cannot accomplish it by telling them we are lining up the buses to send you back to where you belong! You cannot on the one hand say you DO NOT BELONG HERE and on the other hand say WHY DON’T YOU ACT MORE LIKE US!

The Hispanics may be slower to assimilate than other immigrant groups but they are assimilating nicely. Almost all second- and third-generation Hispanics are “confident” of their command of English.

I agree that we need to secure our borders as a logical first step. But this also is a problem that is currently correcting itself. The vast immigration from Latin America, mostly from Mexico, between 1982 and 2007, is over — at least for now. Net migration from Mexico in 2007-12 was zero, according to the Pew Hispanic Center. One result is that an increasing majority of young Hispanics here were born here, and so are U.S. citizens. 

That means that, absent a new wave of illegal immigrants, the debate over legalization and/or a path to citizenship will become less relevant over time. Further, one-quarter of recent Hispanic marriages have been to non-Hispanics. Will their children identify themselves as Hispanics on Census forms?

The Economist rightly argues that America’s Hispanics will be a national asset. You probably have had hard-working Hispanics in your employ. I know I have. Every one that I have come to know personally has been a “salt of the Earth,” dedicated person.

The Republican Party started as abolitionists. I like that and it is one of the reasons I am a Republican. Do we want to be known as the Party that loaded 12 million people on buses to nowhere? The deportation question is for all intents and purposes resolved. I can’t be done. It shouldn’t be done. Demographics can’t be fought. An alternative solution is not optional. It is required!

Find it.

Roy Filly

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How did our federal “giverment” come to this?

Oath of Office

Do you solemnly swear that you will support and defend the Constitution of the United States against all enemies, foreign and domestic; that you will bear true faith and allegiance to the same; that you take this obligation freely, without any mental reservation or purpose of evasion; and that you will well and faithfully discharge the duties of the office on which you are about to enter: So help you God?

The “spelling error” in the title is intentional. Our federal government’s principle mandate is to protect us from threats “foreign and domestic.” But instead it has become an instrument for the redistribution of dollars from one individual to another. I hate to say it, but as strong as we are, we still have a lot of enemies, foreign and domestic!

Most Americans do not grasp the magnitude of this redistribution. Federal spending reached $3.5 trillion in 2014 and the deficit was $486 billion. That level of deficit spending, as ridiculous as it is, will be short-lived unless something is done about federal spending. In six short years we will be back to Obama-style trillion dollar deficits (see below). Do da’ name, Ruby Begonia, strike a familiar note?

CP-Federal-Spending-by-the-Numbers-2014-05-1-deficits-interest_507

The Democrat Party wants money taken from the defense budget to spend more on social welfare programs. When you watch the following video, tell me if that makes any sense at all. Again, you can see below that federal spending on defense is diminishing steadily as a proportion of the US economy. Instead so-called “mandatory spending” has progressively increased. In the United States, mandatory spending refers to budget authority and ensuing outlays provided in laws other than appropriations acts, including annually appropriated entitlements. In fiscal year (FY) 2014, mandatory spending accounted for about 60 percent of the federal budget and over 12 percent of gross domestic product.

CP-Federal-Spending-by-the-Numbers-2014-03-1-budget-trends_509

Our federal debt topped $18 trillion this year. Soon, we will exceed our “debt limit” and another political discussion will roil in Washington. You will hear, “Blah, blah, blah!” Then both parties will increase the debt limit.

Roy Filly

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USA. Still the most innovative.

Innovation distinguishes between a leader and a follower.

Steve Jobs

Education does not beget innovation. Nor does intelligence, although both are subliminal requirements. Bill Gates and Steve jobs are excellent examples. As well, Thomas Alva Edison was a hyperactive child, prone to distraction. He was deemed “difficult” by his teacher. His mother quickly pulled him from school and taught him at home. Innovative ability and what makes it possible is difficult to define. Some try (see footnote). But, fortunately, the USA has been and continues to be the most innovative nation in history.

With 61,492 patent applications, the United States was the primary origin of patent applicants ahead of Japan (42,459) and China (25,539). As you can see in the chart below three US companies were in the top ten of patent filings. The only “blemish” is that the top company was Huawei, the Chinese telecom giant.

[Source: Statista]

chartoftheday_3331_Top_10_International_Patent_Filing_Companies_n

Roy Filly

Footnote:

From: The ten traits of great innovators, by Rebecca O. Bagley

In order to educate and support innovative leaders, we should first identify what characterizes them. Some of the characteristics innovative business leaders embody include the following:

1. Being innovative means doing things differently or doing things that have never been done before. An innovator is someone who has embraced this idea and creates environments in which employees are given the tools and resources to challenge the status quo, push boundaries and achieve growth.

2. Innovators are authentic leaders committed to creating dynamic, highly productive and values-based organizations that hire people who are passionate about their work; give them opportunities to grow; make them feel valued and respected; and give them clarity about their roles and responsibilities.

3. Innovators understand innovation never happens in a vacuum. They value, build and sustain active, vibrant networks of people, assets and organizations. Instead of viewing collaboration as a challenge, they see it as an opportunity to identify strengths, weaknesses, opportunities and threats.

4. Innovators are committed to diversity and understand it takes many different points of view to fully grasp the complexity of economic, technological and other challenges.

5. Innovators have let go of the high-control, low-trust model of leadership and lead by directing from the center of their organizations. They empower employees to be creative and develop the skills they need to move to the next level in their careers.

6. Innovators are not taking shortcuts and are not afraid of going after more complex solutions, even if it means taking higher risks.

7. Innovators understand innovation is not a one-time thing and that start-up companies as well as those that are several generations old have to continuously reach above and beyond what they have done before to stay competitive. This requires innovators to be effective change managers who know how to navigate through resistance to their ideas.

8. Innovators are not afraid to break with the norm and push past conventional wisdom that causes people to think in a box. They are aware customers don’t always know what they want.

9. Innovators understand paying too much attention to traditional business metrics can inhibit companies from making breakthroughs. At the same time, however, their business success speaks for itself.

10. Innovators contribute new, unconventional ideas of their own.

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Petraeus. We could still use a general like him.

The following interview appeared in the Washington Post. It shows Petraeus to be both diplomatic and yet a man who pulls no punches. I learned quite a bit from this article despite the fact that it appeared in Pravda on the Potomac.

Americans have elected 12 generals to the presidency. By rank they were George Washington, Dwight David Eisenhower, Ulysses S. Grant, Andrew Jackson, William Henry Harrison, Zachary Taylor, Rutherford B. Hayes, James A. Garfield, Franklin Pierce, Andrew Johnson, Chester A. Arthur, and Benjamin Harrison. At this time in American history we could use another general as Commander-in-Chief. The “community organizer” that is running our armed forces is quite the disaster.

Petraeus, of course, is not a potential candidate. He made some errors (ordinarily forgiven of Democrats, but unforgivable for a Republican).

Roy Filly

Petraeus: The Islamic State isn’t our biggest problem in Iraq

By Liz Sly

General David Petraeus, who commanded U.S. troops during the 2007-2008 surge, was back in Iraq last week for the first time in more than three years. He was attending the annual Sulaimani Forum, a get-together of Iraqi leaders, thinkers and academics, at the American University of Sulaimaniya in northern Iraq’s Kurdistan region.

In his most expansive comments yet on the latest crisis in Iraq and Syria, he answered written questions from The Post’s Liz Sly, offering insights into the mistakes, the prosecution and the prospects of the war against the Islamic State, which he refers to by its Arabic acronym, Daesh.

How does it feel to be back in Iraq after four years away?

Iraq is a country I came to know well and the place where I spent some of the most consequential years of my life. So it has been a bit of an emotional experience to return here after my last visit in December 2011 as director of the CIA.  I was very grateful for the chance to be back to see old friends and comrades from the past.

That said, it is impossible to return to Iraq without a keen sense of opportunities lost. These include the mistakes we, the U.S., made here, and likewise the mistakes the Iraqis themselves have made. This includes the squandering of so much of what we and our coalition and Iraqi partners paid such a heavy cost to achieve, the continuing failure of Iraq’s political leaders to solve longstanding political disputes, and the exploitation of these failures by extremists on both sides of the sectarian and ethnic divides.

Having said that, my sense is that the situation in Iraq today is, to repeat a phrase I used on the eve of the surge, hard but not hopeless. I believe that a reasonable outcome here is still achievable, although it will be up to all of us— Iraqis, Americans, leaders in the region and leaders of the coalition countries — to work together to achieve it.

You oversaw the gains of the surge in 2007-08. How does it make you feel to see what is happening today, with ISIS having taken over more of Iraq than its predecessor, AQI, ever did?

What has happened in Iraq is a tragedy — for the Iraqi people, for the region and for the entire world. It is tragic foremost because it didn’t have to turn out this way. The hard-earned progress of the Surge was sustained for over three years.  What transpired after that, starting in late 2011, came about as a result of mistakes and misjudgments whose consequences were predictable. And there is plenty of blame to go around for that… I would argue that the foremost threat to Iraq’s long-term stability and the broader regional equilibrium is not the Islamic State; rather, it is Shiite militias, many backed by — and some guided by — Iran.

These militia returned to the streets of Iraq in response to a fatwa by Shia leader Grand Ayatollah Sistani at a moment of extreme danger.  And they prevented the Islamic State from continuing its offensive into Baghdad. Nonetheless, they have, in some cases, cleared not only Sunni extremists but also Sunni civilians and committed atrocities against them.  Thus, they have, to a degree, been both part of Iraq’s salvation but also the most serious threat to the all-important effort of once again getting the Sunni Arab population in Iraq to feel that it has a stake in the success of Iraq rather than a stake in its failure. Longer term, Iranian-backed Shia militia could emerge as the preeminent power in the country, one that is outside the control of the government and instead answerable to Tehran.

Beyond Iraq, I am also profoundly worried about the continuing meltdown of Syria, which is a geopolitical Chernobyl. Until it is capped, it is going to continue to spew radioactive instability and extremist ideology over the entire region.

Any strategy to stabilize the region thus needs to take into account the challenges in both Iraq and Syria.  It is not sufficient to say that we’ll figure them out later.

What went wrong?

The proximate cause of Iraq’s unraveling was the increasing authoritarian, sectarian and corrupt conduct of the Iraqi government and its leader after the departure of the last U.S. combat forces in 2011.  The actions of the Iraqi prime minister undid the major accomplishment of the Surge. (They) alienated the Iraqi Sunnis and once again created in the Sunni areas fertile fields for the planting of the seeds of extremism, essentially opening the door to the takeover of the Islamic State. Some may contend that all of this was inevitable. Iraq was bound to fail, they will argue, because of the inherently sectarian character of the Iraqi people. I don’t agree with that assessment. The tragedy is that political leaders failed so badly at delivering what Iraqis clearly wanted — and for that, a great deal of responsibility lies with Prime Minister Maliki.

As for the U.S. role, could all of this have been averted if we had kept 10,000 troops here? I honestly don’t know. I certainly wish we could have tested the proposition and kept a substantial force on the ground. (My plan was to keep 250,000 troops in Iraq – 100,000 on the Syrian border, 100,000 on the Iranian border and 50,000 divided between Baghdad and Fallujah – RF).

For that matter, should we have pushed harder for an alternative to PM Maliki during government formation in 2010? Again, it is impossible to know if such a gambit might have succeeded. But certainly, a different personality at the top might have made a big difference, depending, of course, on who that individual might have been.

Where I think a broader comment is perhaps warranted has to do with the way we came to think about Iraq and, to a certain extent, the broader region over the last few years. There was certainly a sense in Washington that Iraq should be put in our rearview mirror, that whatever happened here was somewhat peripheral to our national security and that we could afford to redirect our attention to more important challenges. Much of this sentiment was very understandable given the enormous cost of our efforts in Iraq and the endless frustrations that our endeavor here encountered.

In retrospect, a similar attitude existed with respect to the civil war in Syria — again, a sense that developments in Syria constituted a horrible tragedy to be sure, but a tragedy at the outset, at least, that did not seem to pose a threat to our national security.

But in hindsight, few, I suspect, would contend that our approach was what it might — or should — have been. (I expect our leaders to make mistakes from time to time. But the current administration has yet to make one correct decision – RF). In fact, if there is one lesson that I hope we’ve learned from the past few years, it is that there is a linkage between the internal conditions of countries in the Middle East and our own vital security interests.

Whether fair or not, those in the region will also offer that our withdrawal from Iraq in late 2011 contributed to a perception that the U.S. was pulling back from the Middle East. This perception has complicated our ability to shape developments in the region and thus to further our interests. These perceptions have also shaken many of our allies and, for a period at least, made it harder to persuade them to support our approaches. This has been all the more frustrating because, of course, in objective terms, we remain deeply engaged across the region and our power here is still very, very significant. Neither the Iranians nor Daesh are 10 feet tall, but the perception in the region for the past few years has been that of the U.S. on the wane, and our adversaries on the rise. I hope that we can begin to reverse that now.

What are your thoughts when you see Qassem Soleimani, the IRGC leader who funded and armed the militias who blew up U.S. troops and shelled the U.S. Embassy while you were in it, taking battlefield tours like you used to?

Yes, “Hajji Qassem,” our old friend. I have several thoughts when I see the pictures of him, but most of those thoughts probably aren’t suitable for publication in a family newspaper like yours. What I will say is that he is very capable and resourceful individual, a worthy adversary. He has played his hand well. But this is a long game, so let’s see how events transpire.

It is certainly interesting to see how visible Soleimani has chosen to become in recent months — quite a striking change for a man of the shadows.

Whatever the motivations, though, they underscore a very important reality: The current Iranian regime is not our ally in the Middle East. It is ultimately part of the problem, not the solution. The more the Iranians are seen to be dominating the region, the more it is going to inflame Sunni radicalism and fuel the rise of groups like the Islamic State. While the U.S. and Iran may have convergent interests in the defeat of Daesh, our interests generally diverge.  The Iranian response to the open hand offered by the U.S. has not been encouraging.

Iranian power in the Middle East is thus a double problem. It is foremost problematic because it is deeply hostile to us and our friends. But it is also dangerous because, the more it is felt, the more it sets off reactions that are also harmful to our interests — Sunni radicalism and, if we aren’t careful, the prospect of nuclear proliferation as well.

You have had some interactions with Qassem Soleimani in the past. Could you tell us about those?

In the spring of 2008, Iraqi and coalition forces engaged in what emerged as a decisive battle between the Iraqi Security Forces and the Iranian-supported Shiite militias.In the midst of the fight, I received word from a very senior Iraqi official that Qassem Soleimani had given him a message for me. When I met with the senior Iraqi, he conveyed the message:  “General Petraeus, you should be aware that I, Qassem Soleimani, control Iran’s policy for Iraq, Syria, Lebanon, Gaza, and Afghanistan.”  The point was clear:  He owned the policy and the region, and I should deal with him.  When my Iraqi interlocutor asked what I wanted to convey in return, I told him to tell Soleimani that he could “pound sand.”

If you look back at what happened when the surge of U.S. troops under your command turned the tide of the war, is there anything you would have done differently? What are your regrets?

There are always actions that, with the benefit of hindsight, you realize you misjudged or would have done differently. There are certainly decisions, in the course of my three deployments to Iraq, that I got wrong. Very candidly, there are several people who are causing enormous harm in Iraq today whom I wish we had taken off the battlefield when we had the chance to do so. Beyond that, there certainly were actions taken in the first year in Iraq, in particular, that made our subsequent effort that vastly more difficult that it needed to be.  But those are well known.

What would be (or is, assuming people must be asking) your main advice on how best to prosecute the war against ISIS now?

In general terms, what is needed in Iraq at this point is all of the elements of the comprehensive, civil-military counterinsurgency campaign that achieved such significant progress during the Surge, with one huge difference — that Iraqis must perform a number of the critical tasks that we had to perform. Iraqis must, for example, provide the “boots on the ground,” albeit enabled by advisers and U.S. air assets, with tactical air controllers if necessary. (I do not believe for a moment that he thinks the “boots on the ground” – God, I hate that term – should be nearly all Iraqis = RF)…

In more specific terms, I would offer the following:

First, it is critical that Iraqi forces do not clear areas that they are not able or willing to hold. Indeed, the “hold” force should be identified before the clearance operation begins. This underscores the need for capable, anti-Daesh Sunni forces that can go into Sunni-majority areas and be viewed as liberators, not conquerors or oppressors.

Second, the Iraqi forces that conduct operations have to demonstrate much greater care in their conduct. I am deeply concerned by reports of sectarian atrocities — in particular by the Shiite militias as they move into Sunni areas previously held by the Islamic State. Kidnappings and reprisal killings, mass evictions of civilians from their homes — these kinds of abuses are corrosive to what needs to be accomplished. Indeed, they constitute Daesh’s best hope for survival — pushing Sunnis to feel once again the need to reject the Iraqi forces in their areas. The bottom line is that Daesh’s defeat requires not just hammering them on the battlefield, but simultaneously, revived political reconciliation with Sunnis. Iraq’s Sunnis need to be brought back into the fold. They need to feel as though they have a stake in the success of Iraq, rather than a stake in its failure.

Third, as I explained earlier, we need to recognize that the #1 long term threat to Iraq’s equilibrium — and the broader regional balance — is not the Islamic State, which I think is on the path to being defeated in Iraq and pushed out of its Iraqi sanctuary. The most significant long term threat is that posed by the Iranian-backed Shiite militias. If Daesh is driven from Iraq and the consequence is that Iranian-backed militias emerge as the most powerful force in the country — eclipsing the Iraqi Security Forces, much as Hezbollah does in Lebanon — that would be a very harmful outcome for Iraqi stability and sovereignty, not to mention our own national interests in the region.

Fourth, as long as we are talking about difficult problems, there is Syria. Any acceptable outcome (in Syria) requires the build-up of capable, anti-Daesh opposition forces whom we support on the battlefield. Although it is encouraging to see the administration’s support for this initiative, I think there are legitimate questions that can be raised about the sufficiency of the present scale, scope, speed, and resourcing of this effort. (Now that is diplomacy. Translation: Our current “boy commander” missed every opportunity to stop the upheaval in Syria, not the least of which was enforcing HIS OWN RED LINE – RF)! It will, for example, be impossible to establish a headquarters inside Syria to provide command and control of the forces we help train and equip as long as barrel bombs are dropped on it on a regular basis. (Mr. President, we need a “no-fly zone!” – RF)

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Black Americans! Vote Republican!

Yesterday an interesting news item got bandied about the media. ESPN personality Stephen A. Smith, an African American, advised every African Americans to, just once, vote Republican in the next election. Ya’ know, he’s on to something.

I have posted several times that black Americans are wrongly wedded to the Democrat Party. The statement by Mr. Smith resulted in some interesting discussions and data presentations. Here is what Mr. Smith’s point was:

“Black folks in America are telling one party, ‘We don’t give a damn about you.’ They’re telling the other party, ‘You’ve got our vote.’ Therefore, you have labeled yourself disenfranchised because one party knows they’ve got you under their thumb. The other party knows they’ll never get you, and nobody comes to address your interests.”

As I said, “Ya’ know, he’s on to something.” Here is a graph on the black American votes, followed by the actual votes.

Screen Shot 2015-03-20 at 6.24.02 AM

2012 (Black vote was 13 percent of total vote)

Obama 93%

Romney 6%

2008 (13%)

Obama 95%

McCain 4%

2004 (11%)

Kerry 88%

Bush 11%

2000 (10%)

Gore 90%

Bush 9%

1996 (10%)

Clinton 84%

Dole 12%

Perot 4%

1992 (8%)

Clinton 83%

Bush 10%

Perot 7%

1988 (10%)

Dukakis 89%

Bush 11%

1984 (10%)

Mondale 91%

Reagan 9%

1980 (10%)

Carter 83%

Reagan 14%

Anderson 3%

1976 (9%)

Carter 83%

Ford 17%

Why the sudden change in black voting in the mid sixties? Black Americans wrongly gave credit to Lyndon Johnson for the civil rights legislation. Oh, to be sure, Johnson was definitely for the civil rights legislation but it was Congressional Republicans that brought the legislation forward with Southern Democrats (Dixiecrats) doing everything in their power to stop it. You’ve got to give the Democrats credit. They spun that one magnificently.

Mr. Smith goes on, “My point is, when you go buy a house, do you look at one? When you are looking for a car, do you look at one? When you want to buy some clothes, when you want to buy some shoes, when you want to buy anything, you’re shopping around… We don’t do that with politics and then we blame white America for our disenfranchisement when it is us.”

Again, “Ya’ know, he’s on to something.”

Roy Filly

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Quotes to ponder.

Readers that have been with me from the earlier days of this blog know of my penchant to lead off with meaningful quotes regarding the subject at hand. I’m not sure why I do that so infrequently now. But I was reading an article by John Hawkins on the five most profound political quotes of the past half decade and two made me stop in my tracks. The thought immediately came to me, “There it is, that’s it!”

Here is the first quote:

“The real story is that our social safety net was supposed to be like one of those, ‘Take a Penny, Leave a Penny’ tills that depend on the honor and neighborliness of a community. And we don’t have that community. What we have is a fragmented mess of givers and takers who are not the same people.” — Daniel Greenfield

My altruist friends often chide me that I denigrate altruism. I will repeat what I have said countless times. If you wish to be an altruist, I applaud you. But it is NO WAY TO RUN A GOVERNMENT! Why not, ask you? Because, answer I, IT SIMPLY CANNOT WORK! You end up with “givers” (who do not choose of their own free will to give, but are taxed into submission according to someone else’s sense of “fairness”) and “takers,” who are not grateful recipients who wish their benefactor well. They don’t even know who their benefactor is. They thinks it’s the government. The way that they salve the embarrassment of “needing the charity of others” is to convince themselves that these benefits are their “rights.” The government “owes” these things to them. This is not difficult to do when the “altruists” in government tell you that you have a “right” to housing, a “right” to medical care, and apparently a “right” to a cell phone, internet service and EBT cards (meant to buy food) that can be used at cash machines in Vegas casinos, and a seemingly endless line of other “rights.”

Here is the second quote:

“Compromise is very difficult in a political environment in which a deal is not a deal. Whether the question is trading robust immigration enforcement for an amnesty benefiting those illegals already present in the country or trading tax increases for spending cuts according to some agreed-upon ratio, the main obstacle is not ideology or partisan self-interest, but the belief – a well-justified belief – that cutting a long-term deal is pointless, because such deals will not stand.”Kevin Williamson

Even politicians are not so stupid that they can’t learn a lesson from time to time. Williamson’s point is well taken. If you can’t trust the deal that has been struck, there is no point in striking the deal in the first place. Currently, we have two other problems that prevent “compromise.” First, we have a President who selectively decides which parts of a law he will enforce and which parts… we’ll he doesn’t think they are “fair.” The second problem is a whopping $18.2 trillion of national debt. “Compromise” was largely obtained under the “great compromisers” like Lyndon Johnson and Tip O’Neill by under-the-table transfers of dollars to a representative’s district or a senator’s state – “you vote for my bill and I’ll give you the money for that bridge that will have your name on it.” Those days are largely gone.

One last quote to ponder:

“Free people are not equal. Equal people are not free.”

[From: Seven principles of sound public policy, by Lawrence W. Reed]

Free people are not equal. When people are free to be themselves, to be masters of their own destinies, to apply themselves in an effort to improve their well-being and that of their families, the result in the marketplace will not be an equality of outcomes. People will earn vastly different levels of income; they will accumulate vastly different levels of wealth.

Equal people are not free, the second half of my first principle, really gets down to brass tacks. Show me a people anywhere on the planet who are indeed equal economically, and I’ll show you a very unfree people. Why? The only way in which you could have even the remotest chance of equalizing income and wealth across society is to put a gun to everyone’s head. You would literally have to employ force to make people equal.

This is the reason all communist governments must be totalitarian and was the essence of Ayn Rand’s philosophy of Objectivism.

Roy Filly

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Those who do not remember the past.

Those who do not remember the past are condemned to repeat it.

George Santayana

I have said many times, “Why, oh why, wasn’t Thomas Sowell our first black president?” The famous quote above by George Santayana is truer today than at any time in my life – which is now a substantial number of years. I am reproducing an article by Professor Sowell that takes us for a walk down memory lane that should put the fear of God into America. Pacifism is a direct path to war – and soon that war may involve nuclear weapons. Just yesterday we learned that President Putin planned to go “on high nuclear alert.” Those who did not live through the Cold War cannot begin to fathom the potential dire consequences of those words. Putin is nuts, but he is a picture of mental health compared to the Ayatollah Ali Hosseini Khamenei. Put nuclear weapons in Khamenei’s hands and I doubt that the old Cold War plan of Mutually Assured Destruction (MAD) will have any effect except what its acronym implies.

Roy Filly

Two Warnings, by Thomas Sowell

When Israeli prime minister Benjamin Netanyahu addressed a joint session of Congress on March 3rd, it was the third time he had done so. The only other person to address a joint session of Congress three times was the legendary British prime minister Winston Churchill.

The parallels between the two leaders do not end there. Both warned the world of mortal dangers that others ignored, in hopes that those dangers would go away. In the years leading up to World War II, Churchill tried to warn the British, and the democratic nations in general, of what a monstrous threat Hitler was.

Despite Churchill’s legendary status today, he was not merely ignored but ridiculed at the time, when he was repeatedly warning in vain. Knowing that his warnings provoked only mocking laughter in some quarters, even among some members of his own party, he said on March 14, 1938 in the House of Commons, “Laugh but listen.”

Just two years later, with Hitler’s planes bombing London, night after night, the laughter was gone. Many at the time thought that Britain itself would soon be gone as well, like other European nations that succumbed to the Nazi blitzkrieg in weeks (like France) or days (like Holland).

How did things get to such a desperate situation, with Britain alone continuing the fight, and struggling to survive, against the massive Nazi war machine that now controlled much of the material resources on the continent of Europe?

Things got that desperate by following policies strikingly similar to the policies being followed by the Western democracies today, including some of the very same notions and catchwords being used today.

Just recently, a State Department official in the Obama administration said that Americans have remained safe in a nuclear age, not because of our own nuclear arsenal but because “we created an intricate and essential system of treaties, laws and agreements.”

If “treaties, laws and agreements” produced peace, there would never have been a Second World War. The years leading up to that monumental catastrophe were filled with international treaties and arms control agreements.

The Treaty of Versailles, which ended the First World War, imposed strong restrictions on Germany’s military forces — on paper. The Washington Naval Agreements of 1922 imposed restrictions on all the major naval powers of the world — on paper. The Kellogg-Briand pact of 1928 created an international renunciation of war — on paper.

The Munich agreement of 1938 produced a paper with Hitler’s signature on it that British Prime Minister Neville Chamberlain waved to the cheering crowds when he returned to England, and said that it meant “Peace for our time.” Less than a year later, World War II began.

Winston Churchill never bought any of this. He understood that military deterrence was what preserved peace. With England playing a leadership role in Europe, “England’s hour of weakness is Europe’s hour of danger,” he said in the House of Commons in 1931.

Today, with the Obama administration “leading from behind” — in practice, not leading at all — we see in Ukraine and the Middle East what that produces.

As for disarmament, Churchill said in 1932, “Alone among the nations we have disarmed while others have rearmed.”

Today, the United States has that dubious and reckless distinction. Our pacifists, like those in England during the 1930s, argue that we should disarm to “induce parallel” behavior by others. In England between the two World Wars, the rhetoric was that they should disarm “as an example to others.”

Whether others would follow that example was just as dubious then as it is today. While Russia and China increased the share of their national output that went to military spending in 2014, the United States reduced its share. Churchill deplored the “inexhaustible gullibility” of disarmament advocates in 1932. That gullibility is still not exhausted in 2015.

“Not one of the lessons of the past has been learned, not one of them has been applied, and the situation is incomparably more dangerous,” Churchill said in 1934. And every one of those words is more urgently true today, in a nuclear age.

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