Fourmilog: None Dare Call It Reason

Reading List: Public Loneliness

Monday, September 16, 2019 22:41

Brennan, Gerald. Public Loneliness. Chicago: Tortoise Books, [2014] 2017. ISBN 978-0-9986325-1-3.
This is the second book in the author's “Altered Space” series of alternative histories of the cold war space race. Each stand-alone story explores a space mission which did not take place, but could have, given the technology and political circumstances at the time. The first, Zero Phase (October 2016), asks what might have happened had Apollo 13's service module oxygen tank waited to explode until after the lunar module had landed on the Moon. The third, Island of Clouds (July 2019), tells the story of a Venus fly-by mission using Apollo-derived hardware in 1972.

The present short book (120 pages in paperback edition) is the tale of a Soviet circumlunar mission piloted by Yuri Gagarin in October 1967, to celebrate the 50th anniversary of the Bolshevik revolution and the tenth anniversary of the launch of Sputnik. As with all of the Altered Space stories, this could have happened: in the 1960s, the Soviet Union had two manned lunar programmes, each using entirely different hardware. The lunar landing project was based on the N1 rocket, a modified Soyuz spacecraft called the 7K-LOK, and the LK one-man lunar lander. The Zond project aimed at a manned lunar fly-by mission (the spacecraft would loop around the Moon and return to Earth on a “free return trajectory” without entering lunar orbit). Zond missions would launch on the Proton booster with a crew of one or two cosmonauts flying around the Moon in a spacecraft designated Soyuz 7K-L1, which was stripped down by removal of the orbital module (forcing the crew to endure the entire trip in the cramped launch/descent module) and equipped for the lunar mission by the addition of a high gain antenna, navigation system, and a heat shield capable of handling the velocity of entry from a lunar mission.

In our timeline, the Zond programme was plagued by problems. The first four unmanned lunar mission attempts, launched between April and November 1967, all failed due to problems with the Proton booster. Zond 4, in March of 1968, flew out to a lunar distance, but was deliberately launched 180° away from the Moon (perhaps to avoid the complexity of lunar gravity). It returned to Earth, but off-course, and was blown up by its self-destruct mechanism to avoid it falling into the hands of another country. Two more Zond launches in April and July 1968 failed from booster problems, with the second killing three people when its upper stage exploded on the launch pad. In September 1968 Zond 5 became the first spacecraft to circle the Moon and return to Earth, carrying a “crew” of two tortoises, fruit fly eggs, and plant seeds. The planned “double dip” re-entry failed, and the spacecraft made a ballistic re-entry with deceleration which might have killed a human cosmonaut, but didn't seem to faze the tortoises. Zond 6 performed a second circumlunar mission in November 1968, again with tortoises and other biological specimens. During the return to Earth, the capsule depressurised, killing all of the living occupants. After a successful re-entry, the parachute failed and the capsule crashed to Earth. This was followed by three more launch failures and then, finally, in August 1969, a completely successful unmanned flight which was the first in which a crew, if onboard, would have survived. By this time, of course, the U.S. had not only orbited the Moon (a much more ambitious mission than Zond's fly-by), but landed on the surface, so even a successful Zond mission would have been an embarrassing afterthought. After one more unmanned test in October 1970, the Zond programme was cancelled.

In this story, the Zond project encounters fewer troubles and with the anniversary of the October revolution approaching in 1967, the go-ahead was given for a piloted flight around the Moon. Yuri Gagarin, who had been deeply unhappy at being removed from flight status and paraded around the world as a cultural ambassador, used his celebrity status to be assigned to the lunar mission which, given weight constraints and the cramped Soyuz cabin, was to be flown by a single cosmonaut.

The tale is narrated by Gagarin himself. The spacecraft is highly automated, so there isn't much for him to do other than take pictures of the Earth and Moon, and so he has plenty of time to reflect upon his career and the experience of being transformed overnight from an unknown 27 year old fighter pilot into a global celebrity and icon of Soviet technological prowess. He seems to have a mild case of impostor syndrome, being acutely aware that he was entirely a passive passenger on his Vostok 1 flight, never once touching the controls, and that the credit he received for the accomplishment belonged to the engineers and technicians who built and operated the craft, who continued to work in obscurity. There are extensive flashbacks to the flight, his experiences afterward, and the frustration at seeing his flying career come to an end.

But this is Soviet hardware, and not long into the flight problems occur which pose increasing risks to the demanding mission profile. Although the planned trajectory will sling the spacecraft around the Moon and back to Earth, several small trajectory correction maneuvers will be required to hit the narrow re-entry corridor in the Earth's atmosphere: too steep and the capsule will burn up, too shallow and it will skip off the atmosphere into a high elliptical orbit in which the cosmonaut's life support consumables may run out before it returns to Earth.

The compounding problems put these course corrections at risk, and mission control decides not to announce the flight to the public while it is in progress. As the book concludes, Gagarin does not know his ultimate fate, and neither does the reader.

This is a moving story, well told, and flawless in its description of the spacecraft and Zond mission plan. One odd stylistic choice is that in Gagarin's narration, he speaks of the names of spacecraft as their English translation of the Russian names: “East” instead of “Vostok”, “Union” as opposed to “Soyuz”, etc. This might seem confusing, but think about it: that's how a Russian would have heard those words, so it's correct to translate them into English along with his other thoughts. There is a zinger on the last page that speaks to the nature of the Soviet propaganda machine—I'll not spoil it for you.

The Kindle edition is free to Kindle Unlimited subscribers.

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Gnome-o-gram: “Take my money. Please—I'll pay you!”

Sunday, September 15, 2019 14:07

Here’s just about the craziest financial chart I’ve seen in some time.

Total negative debt in the world: Deutsche Bank

Courtesy of Deutsche Bank, via CNBC, this is a plot of the total face value of government bonds (not, as the chart is mis-labeled, all debt) which now trade at negative yields. In other words, if you buy the bond today at its market price, hold it to maturity, and add all of the interest it will pay from now until it matures, you’ll end up with less than the price you paid for the bond. And this is in “nominal currency”, not accounting for any depreciation in the purchasing power of the money you get back (due to inflation) compared to what you paid for the bond.

Fixed-income investing (bonds, time deposits, etc.) used to be easy to understand and, let’s face it, boring. It’s supposed to be boring: “gentlemen prefer bonds” because assuming the issuer doesn’t go bust and default on the debt (which can’t happen with bonds issued by a government that can print its own money—the money you get back may be worth less or worthless, but you’ll get it back for sure), you’ll earn the steady rate of income quoted for the bond when you bought it all the way until maturity, when you get your money back. As interest rates go up and down, the market value of the bond will fluctuate, but that doesn’t matter if you hold it until maturity, when it pays off at face value.

Usually, the longer the term of the bond, the higher the rate of interest you’ll earn, since investors demand a greater yield in return for tying up their money for a longer period of time. This isn’t always the case: in fact, we’re presently in a period of an inverted yield curve, which I discussed here in an earlier gnome-o-gram.

But what could possess investors to bet on a sure loser: an investment which is guaranteed to pay back less money than was paid for it? And this isn’t just some rubes who fell for a fast-talking salesman: there are fifteen trillion US dollars worth of these bonds in the portfolios of institutions (banks, pension funds, insurance companies, corporate treasuries, government agencies) worldwide.

The reason is basically fear (and, in the case of some institutions, mandates that they hold some fraction of their assets in government securities). With yields on even substantially risky bonds in the cellar, at least you don’t run any risk with the government bond and you only lose a little money. (For some reason, the alternative of simply ordering up a pallet of high-denomination bills from the central bank and putting them in the vault doesn’t seem to occur to these people, or is considered beneath their dignity.) And with equity markets looking over-extended and volatile, that option is increasingly unattractive.

It isn’t just government bonds, either. Here’s a chart by Bianco Research, published by Market Watch, showing negative yielding corporate bonds in the hands of investors exploding from zero to US$ 1.2 trillion in the first eight months of this year.

Negative yield corporate bonds: Market Watch

When a recession occurs, the principal tool in the hands of a central bank to promote recovery is lowering interest rates. But conventional wisdom among analysts used to be that when rates were already close to zero, there “weren’t any arrows left in the quiver” because “rates can’t go negative”. Well, it appears they can, because they have.

Now, I guess the question is how far into negative territory they can go. If a recession sets in over the next year, I suppose we’ll see.

Other gnome-o-grams

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Reading List: Civil War Two

Wednesday, September 11, 2019 12:05

Chittum, Thomas. Civil War Two. Seattle: Amazon Digital Services, [1993, 1996] 2018. ASIN B07FCWD7C4.
This book was originally published in 1993 with a revised edition in 1996. This Kindle edition, released in 2018, and available for free to Kindle Unlimited subscribers, appears to be identical to the last print edition, although the number of typographical, punctuation, grammatical, and formatting errors (I counted 78 in 176 pages of text, and I wasn't reading with a particularly critical eye) makes me wonder if the Kindle edition was made by optical character recognition of a print copy and never properly copy edited before publication. The errors are so frequent and egregious that readers will get the impression that the publisher couldn't be bothered to read over the text before it reached their eyes.

Sometimes, a book with mediocre production values can be rescued by its content, but that is not the case here. The author, who served two tours as a rifleman with the U.S. Army in Vietnam (1965 and 1966), then fought with the Rhodesian Territorials in the early 1970s and the Croatian Army in 1991–1992, argues that the U.S. has been transformed from a largely homogeneous republic in which minorities and newcomers were encouraged and provided a path to assimilate, and is now a multi-ethnic empire in which each group (principally, whites and those who, like most East Asians, have assimilated to the present majority's culture; blacks; and Hispanics) sees itself engaged in a zero-sum contest against the others for power and the wealth of the empire.

So far, this is a relatively common and non-controversial observation, at least among those on the dissident right who have been observing the deliberate fracturing of the society into rival interest groups along ethnic lines by cynical politicians aiming to assemble a “coalition of the aggrieved” into a majority. But from this starting point the author goes on to forecast increasingly violent riots along ethnic lines, initially in the large cities and then, as people flee areas in which they are an ethnic minority and flock together with others of their tribe, at borders between the emerging territories.

He then sees a progression toward large-scale conventional warfare proceeding in four steps: an initial Foundational Phase where the present Cold Civil War heats up as street gangs align on ethnic lines, new irregular forces spring up to defend against the others, and the police either divide among the factions or align themselves with that dominant in their territory. Next, in a protracted Terrorist Phase, the rival forces will increasingly attack one another and carry out strikes against the forces of the empire who try to suppress them. This will lead to increasing flight and concentration of each group in a territory where it is the majority, and then demands for more autonomy for that territory. He estimates (writing in the first half of the 1990s) that this was the present phase and could be expected to last for another five to twenty-five years (which would put its conclusion no later than 2020).

The Terrorist Phase will then give way to Guerilla Warfare, with street gangs and militia groups evolving into full-time paramilitary forces like the Viet Cong and Irish Republican Army. The empire will respond with an internal security force similar to that of the Soviet Union, and, as chaos escalates, most remaining civil liberties will be suspended “for the duration of the emergency”. He forecasts this phase as lasting between ten and twenty years. Finally, the situation will progress to All-Out, Continuous Warfare, where groups will unite and align along ethnic lines, bringing into play heavy weapons (artillery, rocket powered grenades, armour, etc.) seized from military depots or provided by military personnel defecting to the factional forces. The economy will collapse, and insurgent forces will fund their operations by running the black market that replaces it. For this phase, think the ex-Yugoslavia in the 1990s.

When the dust settles, possibly involving the intervention of United Nations or other “peacekeeping” troops, the result will be a partition of the United States into three ethnically-defined nations. The upper U.S., from coast to coast, will have a larger white (plus East Asian, and other assimilated groups) majority than today. The Old South extending through east Texas will be a black majority nation, and the Southwest, from central Texas through coastal California north of the San Francisco area will be a Hispanic majority nation, possibly affiliated or united with Mexico. The borders will be sharp, defended, and prone to occasional violence.

My problem with this is that it's…ridiculous. Just because a country has rival ethnic groups doesn't mean you'll end up with pitched warfare and partition. Yes, that's what happened in ex-Yugoslavia, but that was a case where centuries-long ethnic tensions and hatred upon which the lid had been screwed down for fifty years by an authoritarian communist regime were released into the open when it collapsed. Countries including Canada, Ireland/Northern Ireland, and Belgium have long-standing ethnic disputes, tension, and occasional violence, and yet they have not progressed to tanks in the street and artillery duels across defended frontiers.

The divide in the U.S. does not seem to be so much across ethnic lines as between a coastal and urban élite and a heartland productive population which has been looted at the expense of the ruling class. The ethnic groups, to the extent they have been organised as factions with a grievance agenda, seem mostly interested in vying for which can extract the most funds from the shrinking productive population for the benefit of their members. This divide, often called “blue/red” or “globalist/nationalist” goes right down the middle of a number of highly controversial and divisive issues such as immigration, abortion, firearms rights, equality before the law vs. affirmative action, free trade vs. economic nationalism, individual enterprise vs. socialism and redistribution, and many others. (The polarisation can be seen clearly by observing that if you know on which side an individual comes down on one of these issues, you can predict, with a high probability, their view on all the others.)

To my mind, a much more realistic (not to mention far better written) scenario for the U.S. coming apart at the seams is Kurt Schlichter's People's Republic (November 2018) which, although fiction, seems an entirely plausible extrapolation of present trends and the aftermath of two incompatible worldviews going their separate ways.

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Reading List: War Is a Racket

Thursday, August 29, 2019 22:03

Butler, Smedley D. War Is a Racket. San Diego, CA: Dauphin Publications, [1935] 2018. ISBN 978-1-939438-58-4.
Smedley Butler knew a thing or two about war. In 1898, a little over a month before his seventeenth birthday, he lied about his age and enlisted in the U.S. Marine Corps, which directly commissioned him a second lieutenant. After completing training, he was sent to Cuba, arriving shortly after the end of the Spanish-American War. Upon returning home, he was promoted to first lieutenant and sent to the Philippines as part of the American garrison. There, he led Marines in combat against Filipino rebels. In 1900 he was deployed to China during the Boxer Rebellion and was wounded in the Gaselee Expedition, being promoted to captain for his bravery.

He then served in the “Banana Wars” in Central America and the Caribbean. In 1914, during a conflict in Mexico, he carried out an undercover mission in support of a planned U.S. intervention. For his command in the battle of Veracruz, he was awarded the Medal of Honor. Next, he was sent to Haiti, where he commanded Marines and Navy troops in an attack on Fort Rivière in November 1915. For this action, he won a second Medal of Honor. To this day, he is only one of nineteen people to have twice won the Medal of Honor.

In World War I he did not receive a combat command, but for his work in commanding the debarkation camp in France for American troops, he was awarded both the Army and Navy Distinguished Service Medals. Returning to the U.S. after the armistice, he became commanding general of the Marine training base at Quantico, Virginia. Between 1927 and 1929 he commanded the Marine Expeditionary Force in China, and returning to Quantico in 1929, he was promoted to Major General, then the highest rank available in the Marine Corps (which was subordinate to the Navy), becoming the youngest person in the Corps to attain that rank. He retired from the Marine Corps in 1931.

In this slim pamphlet (just 21 pages in the Kindle edition I read), Butler demolishes the argument that the U.S. military actions in which he took part in his 33 years as a Marine had anything whatsoever to do with the defence of the United States. Instead, he saw lives and fortune squandered on foreign adventures largely in the interest of U.S. business interests, with those funding and supplying the military banking large profits from the operation. With the introduction of conscription in World War I, the cynical exploitation of young men reached a zenith with draftees paid US$30 a month, with half taken out to support dependants, and another bite for mandatory insurance, leaving less than US$9 per month for putting their lives on the line. And then, in a final insult, there was powerful coercion to “invest” this paltry sum in “Liberty Bonds” which, after the war, were repaid well below the price of purchase and/or in dollars which had lost half their purchasing power.

Want to put an end to endless, futile, and tragic wars? Forget disarmament conferences and idealistic initiatives, Butler says,

The only way to smash this racket is to conscript capital and industry and labor before the nations [sic] manhood can be conscripted. One month before the Government can conscript the young men of the nation—it must conscript capital and industry. Let the officers and the directors and the high-powered executives of our armament factories and our shipbuilders and our airplane builders and the manufacturers of all the other things that provide profit in war time as well as the bankers and the speculators, be conscripted—to get $30 a month, the same wage as the lads in the trenches get.

Let the workers in these plants get the same wages—all the workers, all presidents, all directors, all managers, all bankers—yes, and all generals and all admirals and all officers and all politicians and all government office holders—everyone in the nation be restricted to a total monthly income not to exceed that paid to the soldier in the trenches!

Let all these kings and tycoons and masters of business and all those workers in industry and all our senators and governors and majors [I think “mayors” was intended —JW] pay half their monthly $30 wage to their families and pay war risk insurance and buy Liberty Bonds.

Why shouldn't they?

Butler goes on to recommend that any declaration of war require approval by a national plebiscite in which voting would be restricted to those subject to conscription in a military conflict. (Writing in 1935, he never foresaw that young men and women would be sent into combat without so much as a declaration of war being voted by Congress.) Further, he would restrict all use of military force to genuine defence of the nation, in particular, limiting the Navy to operating no more than 200 miles (320 km) from the coastline.

This is an impassioned plea against the folly of foreign wars by a man whose career was as a warrior. One can argue that there is a legitimate interest in, say assuring freedom of navigation in international waters, but looking back on the results of U.S. foreign wars in the 21st century, it is difficult to argue they can be justified any more than the “Banana Wars” Butler fought in his time.

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Reading List: The Creature from Jekyll Island

Wednesday, August 28, 2019 15:21

Griffin, G. Edward. The Creature from Jekyll Island. Westlake Village, CA: American Media, [1994, 1995, 1998, 2002] 2010. ISBN 978-0-912986-45-6.
Almost every time I review a book about or discuss the U.S. Federal Reserve System in a conversation or Internet post, somebody recommends this book. I'd never gotten around to reading it until recently, when a couple more mentions of it pushed me over the edge. And what an edge that turned out to be. I cannot recommend this book to anybody; there are far more coherent, focussed, and persuasive analyses of the Federal Reserve in print, for example Ron Paul's excellent book End the Fed (October 2009). The present book goes well beyond a discussion of the Federal Reserve and rambles over millennia of history in a chaotic manner prone to induce temporal vertigo in the reader, discussing the history of money, banking, political manipulation of currency, inflation, fractional reserve banking, fiat money, central banking, cartels, war profiteering, bailouts, monetary panics and bailouts, nonperforming loans to “developing” nations, the Rothschilds and Rockefellers, booms and busts, and more.

The author is inordinately fond of conspiracy theories. As we pursue our random walk through history and around the world, we encounter:

  • The sinking of the Lusitania
  • The assassination of Abraham Lincoln
  • The Order of the Knights of the Golden Circle, the Masons, and the Ku Klux Klan
  • The Bavarian Illuminati
  • Russian Navy intervention in the American Civil War
  • Cecil Rhodes and the Round Table Groups
  • The Council on Foreign Relations
  • The Fabian Society
  • The assassination of John F. Kennedy
  • Theodore Roosevelt's “Bull Moose” run for the U.S. presidency in 1912
  • The Report from Iron Mountain
  • The attempted assassination of Andrew Jackson in 1835
  • The Bolshevik Revolution in Russia

I've jumped around in history to give a sense of the chaotic, achronological narrative here. “What does this have to do with the Federal Reserve?”, you might ask. Well, not very much, except as part of a worldview in which almost everything is explained by the machinations of bankers assisted by the crooked politicians they manipulate.

Now, I agree with the author, on those occasions he actually gets around to discussing the Federal Reserve, that it was fraudulently sold to Congress and the U.S. population and has acted, from the very start, as a self-serving cartel of big New York banks enriching themselves at the expense of anybody who holds assets denominated in the paper currency they have been inflating away ever since 1913. But you don't need to invoke conspiracies stretching across the centuries and around the globe to explain this. The Federal Reserve is (despite how it was deceptively structured and promoted) a central bank, just like the Bank of England and the central banks of other European countries upon which it was modelled, and creating funny money out of thin air and looting the population by the hidden tax of inflation is what central banks do, always have done, and always will, as long as they are permitted to exist. Twice in the history of the U.S. prior to the establishment of the Federal Reserve, central banks were created, the first in 1791 by Alexander Hamilton, and the second in 1816. Each time, after the abuses of such an institution became apparent, the bank was abolished, the first in 1811, and the second in 1836. Perhaps, after the inevitable crack-up which always results from towering debt and depreciating funny money, the Federal Reserve will follow the first two central banks into oblivion, but so deeply is it embedded in the status quo it is difficult to see how that might happen today.

In addition to the rambling narrative, the production values of the book are shoddy. For a book which has gone through five editions and 33 printings, nobody appears to have spent the time giving the text even the most cursory of proofreading. Without examining it with the critical eye I apply when proofing my own work or that of others, I noted 137 errors of spelling, punctuation, and formatting in the text. Paragraph breaks are inserted seemingly at random, right in the middle of sentences, and other words are run together. Words which are misspelled include “from”, “great”, “fourth”, and “is”. This is not a freebie or dollar special, but a paperback which sells for US$20 at Amazon, or US$18 for the Kindle edition. And as I always note, if the author and publisher cannot be bothered to get simple things like these correct, how likely is it that facts and arguments in the text can be trusted?

Don't waste your money or your time. Ron Paul's End the Fed is much better, only a third the length, and concentrates on the subject without all of the whack-a-doodle digressions. For a broader perspective on the history of money, banking, and political manipulation of currency, see Murray Rothbard's classic What Has Government Done to Our Money? (July 2019).

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