Will Hurricane Irene be a Blessing in Disguise?

August 29, 2011

“Ghastly as it may seem to say this, the terror attack (911) — like the original day of infamy, which brought an end to the Great Depression — could even do some economic good.”

“If people rush out to buy bottled water and canned goods, that will actually boost the economy.”

“First, the driving force behind the economic slowdown has been a plunge in business investment. Now, all of a sudden, we need some new office buildings. As I’ve already indicated, the destruction isn’t big compared with the economy, but rebuilding will generate at least some increase in business spending.”

Paul Krugman (Princeton Professor, New Times Columnist, and Keynesian Extraordinaire on how the September 11th attacks could “stimulate” the U.S. economy)

The above quotation from Paul Krugman represents his economic philosophy embedded in the deepest part of his soul.  That is that spending of any kind during economically distressed times is all that is needed to turn things around.  Following Krugman’s logic, Hurricane Irene with the destruction it wrought in the hundreds of millions if not billions of dollars along the eastern seaboard could be just what the doctor ordered to give the sputtering U.S. economy a jump start.  After all, roof tops will have to be repaired.  Structures and piers will need rebuilding.  And infrastructure like power lines, drainage systems, and roads will need revamping.  According to Krugman’s philosophy the carnage from the storm should be an economic bonanza for workers, tax authorities, and producers of goods.

But, hold on for one minute.  Not only did Krugman’s prediction about the economic benefits of the World Trade Center being destroyed not come to fruition, his philosophy represents an economic fallacy explained by Frederic Bastiat, political economist and member of the French Assembly, in 1850.

In Bastiat’s Parable of the Broken Window, shopkeeper John B. has a careless son who breaks one of his shop’s window panes.  The shopkeeper pays six francs to the glazier to fix his window.  According to many of Bastiat’s contemporaries and Keynesians today this is a good thing since the glazier is six francs richer and will presumably spend that six francs on other goods and services thus providing employment to others.  This sounds great and given the potential to the economy of one broken window you might think that John B. should be hopeful that his son never learns to be careful and breaks many more of his windows in his lifetime.

Naturally, the good shopkeeper doesn’t want to spend all of his profits on new windows and here is where the fallacy of Krugman’s thinking comes into play.  Krugman and his Keynesian brethren only focus on what can be seen in the parable, namely the windfall to the glazier and his potential expenditure thereof. They totally ignore the fact that if the window had never been broken the shopkeeper would have had it and six francs worth of some other good or service to enjoy.  Like the glazier’s expenditure, the shopkeeper’s outlay on other goods and services would also provide employment to others.  Thus destruction of property spending through carelessness, vandalism, violence, or natural disaster enjoys no advantage over ordinary consumer spending.  If it did Europe would have gotten rich immediately after World War II.

That’s why Hurricane Irene will not be a blessing in disguise for our economy.

Article first published as Will Hurricane Irene be a Blessing in Disguise? on Blogcritics.

Kenn Jacobine teaches internationally and maintains a summer residence in North Carolina


Ron Paul is Right about Iran

August 22, 2011

During the GOP Presidential Debate in Ames, Iowa, on August 11, the most significant exchange between any two candidates came when Rick Santorum called Congressman Ron Paul out for his position on our relationship with Iran.  Santorum, neoconservative extraordinaire, accused the congressman of being naïve about the seriousness of Iran developing a nuclear weapon of its own.  The accusation brought an emotional rebuke from Dr. Paul as he delivered a history lesson of Iran/American relations to Santorum while at the same time launching an emotional appeal for the policy of endless wars to seize.  The exchange highlighted the irreconcilable differences that exist between those who believe there is a bad guy under every rock and those who actually know history and understand international relations.  Santorum and his neoconservative brethren are the former while Ron Paul represents the latter.

It’s only common sense that if you corner an animal it will act aggressively in order to defend itself and escape.  Countries are no different.  As Congressman Paul noted in the debate, the United States military has Iran surrounded on all sides.  Our military currently occupies Iraq to Iran’s east, Afghanistan to Iran’s west.  Obama has escalated U.S. bombings in Iran’s other neighbor to the east, Pakistan.  There are also 3 American military bases in the Persian Gulf south of Iran.  A large naval base is in Bahrain and army and air force bases are in Qatar.  With all of that hostile American fire power situated so close to its borders, it’s no wonder Iran is feeling a bit vulnerable and in need of a little defensive weaponry.

Santorum argued that we have some special obligation to protect Israel from a potentially nuclear Iran.  It’s amazing how Israel seems to enter the conversation when our politicians speak of war.  In Santorum’s case it’s all a part of his pandering to Jewish and Evangelical voters.  But, as Ron Paul indicated to the former senator from Pennsylvania, Israel can defend itself.  As a matter of fact, Israel possesses nuclear weapons of her own.  Even Israeli Defense Minister Ehud Barak has stated that he doesn’t think Iran will drop a bomb on Israel or any other country in the region.  The ruling cabal in Teheran may be brutal to its own citizens but it is not suicidal.

This, of course, is reminiscent of a former foe, the Soviet Union.  As Congressman Paul continued to school Santorum he pointed out that there was no regime more brutal to so many people for so long as the communist Soviet Union.  Under Joseph Stalin and various other crazy Soviet dictators, millions were slaughtered or left to die of starvation and all of Eastern Europe was subjected to Soviet domination for close to forty-five years.  After the Soviets stole our nuclear secrets and developed their own bomb we sold them grain and negotiated arms deals with them.  Both sides realized the importance of doing what was necessary in order to co-exist in a vastly more dangerous world.  At the end of the day, Iran has no chance of attaining the economic, political, and military capabilities of the now defunct Soviet Union.  As a matter of fact, chances are very good that if the Iranian leadership took the same path (military buildup) as the Soviet oligarchs they would end up ultimately in the same place – on the ash heap of failed regimes in history.

When the Soviet Union collapsed and the Cold War ended neoconservatives like Rick Santorum needed a new enemy.  Given America’s decades’ long meddling in Middle Eastern affairs and our unconditional support for the State of Israel, it was only a matter of time before blowback for our past sins would come to fruition.  September 11th 2001 was that blowback.  Santorum and his ilk had their enemy – Islamists.  In ten short years they have spent trillions on that foe with no let-up expected any time soon.  Now they have their sights set on Iran.  In order to prevent the next catastrophic war, the choice is clear in the next presidential election.  You can either vote for the candidates who see bad guys under every rock or you can vote for the candidate who actually knows history and understands international relations.  That candidate is Ron Paul.

Kenn Jacobine teaches internationally and maintains a summer residence in North Carolina

Ron Paul is the Only One

August 16, 2011

It has become cliché for political pundits to proclaim every four years that the presidential election campaign is the most important in the nation’s history.  Given that our economy is on the brink of collapse, we are currently engaged in 5 wars, and our civil liberties are under attack like never before, next year’s presidential election will truly rank right up there with the most important elections in our country’s history.  Accepting that view, there is only one candidate in the race for the White House in 2012 who has what it takes to restore America to its previous greatness.  That candidate is Congressman Ron Paul.

No other candidate saw the financial crisis of 2008 coming.  As early as 2003, Congressman Paul predicted Federal Reserve and Bush Administration policies would lead to the housing bubble and its inevitable collapse.  He predicted this based on his understanding of free-market economics and the Austrian Business Cycle Theory.

Now, it is true that Newt Gingrich did allude to the corruption of the Federal Reserve in last week’s GOP debate in Ames, Iowa, but he and every other Republican on stage except Ron Paul do not understand the connection between Fed policies and our economic ills.  All they can propose are more tax cuts to remedy the situation.  Congressman Paul has been preaching about the need to restore sound money to our economy for over 35 years.  He recognizes that the destruction of the middle class in America is primarily the result of the price inflation (over 450 percent since 1971) perpetrated on the American people by the Federal Reserve.  He knows that spending our way out of our current crisis will not work.  He is the only candidate for president who would take a holistic approach to getting our economy back on track – mal-investment liquidation, rein in out of control federal spending, responsible military budgets, and of course sound money.

But, Dr. Paul’s superiority over the other candidates for president doesn’t end with economics.  He is by far and away the only responsible candidate in the field when it comes to war and peace.  He did not fall for the war propaganda launched by the Bush Administration against Saddam Hussein.  He voted against giving the president authority to invade Iraq.  As president he would end the 8 year war in Iraq, the 10 year war in Afghanistan, and our wars in Libya, Pakistan, and Yemen.

As was highlighted in the Ames, Iowa debate last week he is well-read when it comes to international affairs.  He knows the history of our troublesome relationship with Iran and understands that incendiary remarks and threats toward her are not going to make the world safer.  As president, Dr. Paul would end American occupations in countries that surround Iran, thereby lessening tensions and opening the door to peaceful relations.  Contrary to the positions of other candidates for president, Ron Paul knows that another war is not in our best interest.

Lastly, no other candidate for president has as strong a record on civil liberties as Congressman Paul.  He has been a consistent opponent of Washington’s relentless assault on our civil liberties and constitutional rights.  As president, the so-called “Patriot” Act which has radically expanded the federal government’s ability to use wiretaps without judicial oversight; has made it far easier for the government to monitor private internet usage; has authorized “sneak and peek” warrants enabling federal authorities to search a person’s home, office, or personal property without that person’s knowledge; and has required libraries and bookstores to turn over records of books read by their patrons, would be priority one on his chopping block.  The TSA’s grope fest at our airports would also end.  As important as civil liberties are none of the other candidates for president have shown any interest in protecting them.

The above comparison includes the current occupant of the Oval Office Barack Obama.  In 2 ½ years as president, Obama continues to support the same failed economic policies (spending and easy money) that got us into the mess in the first place and has only made matters worse since.  He not only broke campaign promises by continuing Bush’s wars in Iraq and Afghanistan but has escalated one other in Pakistan and started one of his own in Libya.  And, as for civil liberties and constitutional rights, he has shown his true colors by signing a four-year extension of expiring provisions of the “Patriot” Act and authorizing his Director of National Intelligence to notify Congress that the administration reserves the right to assassinate American citizens believed to be terrorists.

Yes, next year’s presidential contest will be truly one of the most important in American history.  With more than 14 million Americans out of work and millions more involved in the administration’s war machine what we need is a new president with an understanding of economics, knowledge of international affairs, and a complete dedication to civil liberties and constitutional rights.  The only candidate that fits that profile is Congressman Ron Paul.

Kenn Jacobine teaches internationally and maintains a summer residence in North Carolina

Modern Nazis

August 12, 2011

Guest Blog: Chris Jacobine

On the night of May 1st, 2011, I witnessed thousands take to the streets in State College, Pennsylvania, to celebrate the death of one of the most iconic, evil figures in modern history.  The death of Osama Bin Laden served as a statement to the enemies of the “free world” that the United States and her allies had reach enough to extract a man who had evaded capture for nearly ten years and who, for a brief period of time, brought the colossal empire of America to a rigid halt.  The end of Osama’s reign can be characterized by the gleeful demonstrations that took place across the United States on receiving word of his downfall, as a symbol of the prevailing nature of the so called “forces of good”.  However, the United States as a country has failed to gain from this ordeal. Osama’s death has served only to absolve a decade of vindictive emotions and express that no foul play will remain unpunished as long as the enemies of “freedom” draw breath.

I would like to preface this piece by highlighting that the thoughts presented in this essay are entirely subjective, and written from the point of view of an American citizen whose opinions may differ greatly from my peers.  The function of this piece is not to evoke an emotional response, but rather to express an alternate opinion that I feel has been omitted from the spotlight. Feel free to disagree with any of my points; in fact, I encourage you to.

From a historical perspective, there will always be a measure of bias concerning the retelling of any course of events.  The documented perspective of nearly every critical event in history is that of the victor, and for that reason, opinions concerning historical figures tend to lack diversity.  The most prominent example is Adolf Hitler, who is one of the most referenced historical figures of negative connotation in modern culture.  Imagine, for the sake of argument, that Hitler’s forces had been victorious in their conquests of Europe, and that the subsequent peace left the entire continent under German rule.  The historical data retained and distributed to the average citizen concerning the war, in this circumstance, would contain a very pro-Nazi bias.  And if the programs implemented in Germany, such as Hitler’s Youths, and the functional nature of fascism had spread to Germany’s colonies and experienced the same successes that they brought to Germany, perhaps the distrust of Hitler and the Nazi regime would wither over time.  Generations of students would read textbooks that commend the Third Reich on its accomplishments and offer no alternate viewpoint.  Certainly this idea is disconcerting for those who recognize the implications of Hitler’s aspirations, yet parallels can be drawn between this scenario and the American empire as it stands today.

Many, if not most, Americans believe that we are part of the most prolific and successful nation that the world has ever seen, whose power and status is unquestioned around the globe. This notion is unfounded.  Certainly the American economy is the most productive and powerful in world history, and our military has a near perfect record, but no country in the world has a weaker semblance of culture.  Our lives are built around modern engines and materialism, with the belief that success in our lifetimes can only be achieved if we live the American Dream that has become the object of our desires.  By embellishing in modern luxuries, the structure of life has become a progression that feeds on our greed and latent desires, only pausing briefly to boast our own worth to induce jealousy in others.  Pride plugs our senses and limits any chance that we have of learning things from other people and cultures.

It is for this reason, in conjunction with the sheer might of America as a country, that I feel justified in saying that the bias that the American culture asserts, both inwardly and as a perspective toward the rest of the world, is comparably alarming as the idea of a victorious Nazi regime in World War II.  The ideals that we take to be factual are simply our own cultural axioms, which are no truer from a universal sense than any other culture’s beliefs.  The people of Germany believed that their cause was just when they went to war in 1939, as did the Americans when we bombed Baghdad`. Too often, we mistake consensus for fact, and are unrelenting in our defense of these beliefs. And although culture as a concept is built from this notion of agreement within a community, the idea that our beliefs are absolutely true has bred widespread contempt toward the United States

Asserting that any one culture’s way of life is ideal is an insult to the global community.  One of the fundamental principles of life is that the experiences of a human during their lifetime cannot be defined by any distinguishable quality.  Although we would believe that a wealthy individual who lives a long and prosperous life in a Western country has led a more fulfilled life than an orphan child in a third world nation, the two are interchangeable.  Our backgrounds, family history and social status are all arbitrary in nature, and the opportunities given to different people are based on chance.  There is no failure in the orphan’s life, as there is no success in that of the wealthy man.  As the Italian proverb goes, “When the game is over, the king and the pawn go into the same box.”  The actions that we take while we are alive are our own to choose, and by attempting to quantify whose life is more fulfilled or who lived a happier life, we lose our ability to empathize.

The extent of the knowledge that the majority of people around the globe have concerning current events is limited to the information and opinions presented by the media. This is an inadequacy that is overlooked by many, as we prefer to think that we have been given ample information and that our opinions are both insightful and knowledgeable. But just because a concept is the preferable option doesn’t make it true. Complacency breeds complacency and for our country to progress, we need to accept our limitations and embrace modesty so that we may think critically about our environment and build our own, individual opinions about a variety of global issues.

This notion is relevant in the discussion of the September 11th attacks. As with every dispute, there are multiple points of view, though the alternate viewpoint in this circumstance is often overlooked. We assume that there can be no logical reason for such destruction, and for that reason, it is presumed that the attackers are irrational in thought. However, to enact a plan so extreme, an excessive amount of logical thought must have been given to the issue. So the question becomes, what did we do to evoke such emotions? How have our actions influenced the world to the extent that institutions of people loathe us enough to inflict such pain? And ultimately, are we partially to blame for the September 11th attacks?

And so, as I watched thousands of people celebrate the death of a man none of them have ever met, I refused to partake on principle. I do not think the death of Osama Bin Laden is a cause for celebration, but rather disappointment. This decade-long culmination of efforts only succeeded in ending one man’s life. We have not learned anything from this ordeal, nor did we attempt to. Our resolve now is as strong as it was ten years ago, and our inflated ego blinds us from distinguishing between fact and opinion, instead relying on the adage that ignorance is bliss.

The victims of terrorism have not been done justice by the murder of Osama Bin Laden. If we ignore tragedy as an opportunity to learn from our mistakes, then every victim of the September 11th attacks died in vain.