THE KELLY LETTER OR
In his new book, The End of War, John Horgan of the Stevens Institute of Technology in New Jersey claims that exceptions to the rule of violence in the wild prove that violence is not an inherent part of human nature. He presents cases of bands of chimps and orangutans that live peacefully in contrast to cases of groups that practice violence.
He told Haaretz in an interview that some people will consider his book “a bunch of naive, hippie hogwash” because “the vast majority of people think that war is a permanent part of the human condition,” but he insists that “we will surely end war someday. The only question is how and when.”
While everybody feels the basic appeal of peace, but it’s not a love of war that keeps violence with us, nor an instinct, but just events unfolding in a way that forces people to fight. It doesn’t take geopolitics to illustrate this. Horgan himself may be a pacifist, but he would undoubtedly fight an intruder in his home to protect his family. He might even use violence to get food for his family if there weren’t enough to go around town. The theory of peace in all circumstances falls apart quickly in the reality of life.
It works similarly on a national scale. Horgan told Haaretz: “In a way, the United States is the problem when it comes to the persistence of war in the world today. We are engaged in two large-scale conflicts overseas, in Iraq and Afghanistan. We’re the largest arms dealer in the world. We have a massive military budget. China’s military is minuscule compared to ours, I think their army is about one-sixth or one-seventh the size of ours in terms of defense spending. Yet we say that we are a people of peace. And, you can of course make a moral case for some of our conflicts. But if your goal is to move the world to a state beyond militarism, you have to find other ways of dealing with problems.”
It’s a little disingenuous to use the unnecessary, politically motivated, and widely criticized wars in Iraq and Afghanistan as the only examples. Saying that we can move beyond such obviously ill-conceived wars is reasonable, but that’s not the same as saying we can move beyond all wars.
The reason is more practical than philosophical. No nation’s goal is to move the world to a state beyond militarism. All nations seek to protect their interests. That’s why militaries exist in the first place. The only nations that would celebrate an official pacifist policy from the United States are its rivals. Its allies and citizens would not. The proper reply to Horgan from Washington would go something like this: “It’s not that we want war, it’s that we want resources. So does everybody else. When we can’t agree on who gets what’s left, war will break out. No high-minded appeal for peace will answer the question of who gets a limited supply of vital commodities. War will.” Clausewitz was right: “War is the continuation of policy by other means.”
That’s why it won’t end.
Hate to be so gloomy in the wake of Thanksgiving, but Italy is now paying almost 8 pct on its two-year bonds. That’s curtains, folks. The red line was 7 pct for 10-year bonds, now we’re getting to beyond beyond, and in an economy that does more than export olives. When the two-year yields more than the 10-year, you know traders left liquidity worries in the dust and moved on to solvency worries. As if on cue, we have word that the EFSF savior fund will not only not double its firepower, it could “deliver as little as half what the bloc’s leaders had hoped for because of a sharp deterioration in market conditions over the past month,” sayeth the FT. Financial markets are in big trouble. Remember the words of Carmen Reinhart and Kenneth Rogoff in their working paper, A Decade of Debt: “As countries hit debt intolerance ceilings, market interest rates can begin to rise quite suddenly, forcing painful adjustment. For many if not most advanced countries, dismissing debt concerns at this time is tantamount to ignoring the proverbial elephant in the room. So is pretending that no restructuring will be necessary.” – 11/25/11
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Nigel Farage, Co-President of the EFD group, told the European Parliament earlier this week that Europe is on the edge of financial and social disaster and that the area’s leaders lack democratic legitimacy. “We are now living in a German-dominated euro. … I don’t want to live in a German-dominated euro.”
He believes that the former PMs of Greece and Italy were replaced by puppet leaders and that all the Eurocrats should be fired. He questioned the body’s right to tell the Italian people that “this is not the time for elections, but the time for actions. What in God’s name gives you the right to say that to the Italian people?”
So far, the new puppets in charge haven’t made a bit of difference. Italian bond yields remain elevated at more than 6.7 pct. Investors are still awaiting details on how the size of the eurozone bailout fund will be grown to $1.3T. – 11/18/11
Mohamed El-Erian: “There is only one institution that has an immediately-available balance sheet that could stabilise the situation in the next few days and weeks — the ECB. … [but it] needs others to help on four critical issues: a bold and lasting separation in how we deal with Europe’s insolvent nations and its illiquid ones; a regional programme to enhance growth and employment; immediate actions to counter the fragility of the banking system; and bold political decisions to strengthen the institutional underpinning of the eurozone.”
John Quiggin: “This failure has been caused by the policy choices of one of the few European institutions that has the capacity to act unilaterally and decisively: the ECB. … [It] has pursued a ‘one size fits nobody’ policy of monetary contraction, at a time when no European economy is growing strongly. … Unlike any previous central bank in history, the bank has disclaimed any responsibility for the European financial system it effectively controls, or even for the viability of the euro as a currency.” – 11/10/11
This an excerpt from my new book, Stock Market Contest, read by me.
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EU efforts to contain bond yields and therefore its crisis have been for naught, as Italian yields are now over 6.35 pct — their crisis-high region, where they began August, and you may recall what a swell month that turned out to be. Don’t worry, though, Italy invited the IMF to monitor its progress toward meeting austerity targets “to make sure there is credibility.” Right, because they did such a bang-up job with Greece.
Meanwhile, job growth is still weak in America with October nonfarm payrolls increasing only 80K instead of the 95K expected. Barry Ritholtz suggests that the specific figures don’t matter, anyway, but the trend does: “Are jobs readily available? No. Is the economy creating enough jobs to reduce the unemployment rate? No. Are we even creating enough new jobs to keep up with population growth? No. Is the overall employment situation having an impact on Consumer confidence? Yes, negatively. Is this impacting consumer spending and retail sales? Yes, in a negative way.” – 11/4/11
Socks for Japan embarked on two distributions to the disaster zone in October, one to Ishinomaki on Saturday, October 8 and the other to Onagawa and Ishinomaki on Monday, October 17.
While work crews have cleaned up the area dramatically, it is still a disaster zone. Living among the rubble is hard for people. They walk or ride bicycles or drive recently-purchased used cars past wreckage that reminds them of friends lost and businesses washed away. While earlier trips required us to pack food and water because we couldn’t buy them inside the zone, we’re now able to stop at functioning convenience stores and gas stations. The inventory isn’t yet the same as it is in undamaged parts of the country, but a semblance of normalcy is creeping back in. Creeping is the operative word, though, as scenes of damage still dominate the landscape.
Piles of rubble remain everywhere.
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