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TM, ®, Copyright © 2015 Piero Scaruffi All rights reserved.

Articles on the USA published after 2013
The Silent Judicial Revolution
400 and counting
Obama's dilemma: To govern or not to govern
Fox News
Google Glass and how to monetize other people's lives
Barack Obama, serial killer
A rebuttal of the liberal worldview
Why economists are dangerous
The War on Drugs: What's the Point?
Why the USA is the land of opportunities
Capitalism in the world and Socialism in the USA
The value of technology: The USA will not decline any time soon
Articles on the USA published before 2013

  • (december 2013) The Silent Judicial Revolution.

    I don't want to mention specific countries (and it would too many) but here is what started me thinking about the subject of this article. As i travel around the world and i ask people what they think of the USA, instead of hearing litanies of complaints about climate change or drone strikes, i find that many people around the world (mostly young, because it's the young who speak English) are truly puzzled and sometimes amused by the USA's missionary passion for spreading same-sex marriage around the world (and some think the USA wants to spread homosexuality tout court). It is just odd for them that the world's superpower would go out of its way to defend the rights of homosexuals (and de facto force gay marriage on the rest of the world) as opposed to, for example, defend the rights of handicapped people (for whom most countries of the world provide no access ramps and no parking spots) or, for that matter, the rights of women (that are still routinely discriminated in large parts of the world at least as much as homosexuals). Apparently, it is perfectly ok for the USA if women hold less than 10% of the seats in the Russian parliament, but it is not ok at all if Russian president Vladimir Putin makes a veiled anti-gay statement. When Putin speaks against homosexuality, the West accuses him of being homophobic, but he is simply representing the vast majority of the population of the planet. In many countries homosexuals are the victims of discrimination and sometimes even risk their lives not because of an evil dictator but because the majority of the population feels that way. Just like the Christian missionaries were determined to reverse the tide and turn millions of "pagans" into Christian believers, the USA is determined to force those people to convert to its gay-friendly views. This is true also for other issues related to family law, like abortion and divorce, although in the year 2013 the headlines were mostly stolen by same-sex marriage. As of december 2013, only 15 nations out of 200 recognize same-sex marriage. In the others it's the majority of voters that opposes it, not some crazy dictator. In many of the other 185 countries homosexuality is actually a crime. That includes India (the world's largest democracy), most of Africa and almost all Islamic countries. As i type Uganda just passed a law to criminalize homosexuality (Nigeria is planning a similar one for january) and Spain is considering a tougher abortion law; and in the very USA a court has struck down a state's ban on same-sex marriage as unconstitutional (the state is Utah and the vast majority of its people oppose gay marriage, 72% according to a Brigham Young University poll of 2012).
    This started me thinking not about homosexuality but about how in heaven did the USA pass those laws in the first place. The USA was one such country: the vast majority of people in the USA were as "homophobic" as Putin in the old days. How did that change? And just to make sure that this article is not read simply as an article about gay marriage, let me add that the same is true of abortion on demand, of the widespread tolerance for pornography, and of many other liberal attitudes towards values considered sacred in many parts of the world. Putin has spoken of the USA trying to impose "the equality of good and evil" on the rest of the world in the name of "freedom", which is a way to imply that he, Putin, is the defender of the traditional boundary between good and evil, and the USA is trying to blur that boundary to make evil as acceptable as good. Fact is, millions if not billions of people side with Putin.
    Most young people in the USA have no problems siding with the liberal policies that the USA is trying to export (from gay marriage to smoking marijuana) but their grandparents would be shocked. How did the USA "progress" from that bigot generation that thought homosexuality was a disease to this enlightened generation that thinks any form of sex is equally legitimate?
    Putin is close to the truth when he claims that this new (im?)morality has been imposed undemocratically. In fact, the new morality has been decided not by referendums but by unelected justices. It was ultimately the Supreme Court that turned abortion, homosexuality and many other previously immoral actions into perfectly normal affairs. Once the judges decide what constitutes a constitutionally protected right the schools "must" comply and start teaching children the new morality (Putin would call it "brainwashing" them, you may call it "educating" them) and all public spaces (especially workplaces) need to be careful that nobody violates the Supreme Court-sanctioned rights. There certainly was a strong pro-gay movement in the USA (as far as protecting them and giving them equal rights) but the driving force behind gay marriage has really been the judiciary. By the same token, many issues that were dear to Christians (the vast majority of the US population) are now disgraced because judges found them unconstitutional. Court orders forced schools to remove Christian images. Courts have ruled against the display of Christian symbols in government offices because of the separation of church and state. And so forth. It has been the courts: referendums would have been won by the other side. Once the courts decide that something is illegal, the schools have to comply and start teaching children that it is illegal. Within one generation this system will have created a few million of voters that believe it was correct to make it illegal. Then eventually it becomes the majority's will. Then eventually it becomes the mission of the nation to teach the whole world the new truth; just like the "truth" used to be that Jesus Christ is coming soon and you need to convert and repent right now (the principle of saving the world from its sins is the same, we just change the sins).
    It is incorrect to blame militant secularism and cultural relativism like conservatives do. It is not true that the judges are part of a vast liberal conspiracy to turn the USA into a country of atheists. The more i thought of this the more i realized that the cause of this seismic shift in moral values lies elsewhere and it is largely independent of any special-interest group and its agenda. The root cause is the fundamental contradictions of the old moral values. What we are witnessing is the legal system becoming more and more sophisticated and rational in interpreting the constitution originally written to embody the moral values of the founding generations. Unfortunately for them, the founding documents contradict the moral values that inspired them. You can in fact start with slavery itself. Slavery was widely practiced by the first citizens of the USA (even by founding father Thomas Jefferson himself) but it was clearly in contradiction with the Bill of Rights that those citizens enthusiastically adopted. Ditto for everything that has slowly but steadily de-Christianized the USA: the process was built into the very founding documents more than 200 years ago, although it took a long time for the judiciary system to understand it. Whatever the Supreme Court rules today is simply a direct consequence of the founding documents. Today we have judges who are less likely to listen to their neighbor and to their spouse (and to their pastor/priest!) when they interpret the constitution: they do it in private, fully concentrated on the text. And draw inevitable conclusions.
    It is not only the traditional Christian values that pay a price: sometimes the Supreme Court's decisions outrage everybody because they seem totally irrational but they happen to be the direct (possibly unwanted) consequences of the founding documents. Hence decisions that fly against the common sense of all seven billion inhabitants of this planet (plus all the ones who lived before) such as the one that corporations are persons or the incredibly stupid literal interpretation of the second amendment of the constitution.
    This is not to diminish the importance of democratically elected state legislatures, whose laws, of course, are the drivers of the whole debate; but, ultimately, it's the courts that decide what is the law of the land and what is wishful thinking, and it is the Supreme Court that decides which of the many laws enacted by the 50 states are constitutional and which are not. It is the Supreme Court that rejected the tobacco industry's appeal of a Florida ruling that will encourage smokers sue cigarette manufacturers. Tobacco (and alcohol for that matter) is not any less dangerous than marijuana, but there are many more cigarette smokers than marijuana smokers, and that's simply because the law does not punish those who make and sell cigarettes the way it punishes those who make and sell drugs. The Supreme Court's decision not to help the tobacco industry in this case might end up making pot more popular than tobacco.
    It is ironic that young people often interpret the new morality as a by-product of their generation's stand: that morality is shaped and enforced by Supreme Court judges whose average age is 68 and by courts around the country who are not much younger. And the "new" morality is simply a return to the morality of the Greeks and the Romans two thousand years ago, before the long interlude of Christian morality.
    The USA used to be convinced that its mission was to spread freedom and democracy to the rest of the world. Now it is convinced that it should also spread divorce, abortion, gay marriage, tolerance for pornography, and, soon, use of marijuana. Ultimately, it is the same attitude and it comes from the same source.
    The moral revolution of the last 50 years has in part been driven by judges who take the constitution and the other founding documents as postulates, and then use mathematical thinking to derive the logical consequences. Whether the founding fathers intended to be taken so seriously about the principles they laid down we will never know. Whether the founding fathers would be pleased with today's rulings based on those principles we will never know. But there is nothing to stop the USA down this alley: more and more careful scrutiny is likely to further de-Christianize the country.
    (Disclaimer: "de-Christianize" is not a good term because there is nothing in the Gospels that criminalizes gay marriage or marijuana, but i can't find a better term to summarize the shift in moral values in the USA, one of the most Christian countries in the world).
    (I should also add that the people i met abroad who were making fun of our passion for defending homosexuality were not necessary anti-gay: they were simply puzzled why we're so obsessed with this issue instead of many others).

    TM, ®, Copyright © 2013 Piero Scaruffi All rights reserved.
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  • (october 2013) 400 and counting.

    Barack Obama won a Nobel Prize for Peace in 2008 as he was elected president of the USA. Since then he has ordered more than 400 aerial drone assassinations. These are assassinations that bypass the entire justice system: someone picks a "target" somewhere in the world (Afghanistan, Pakistan, Somalia, Yemen), the president approves it, and a few hours later someone is dead. The "target" has no right to a fair trial, no way to dispute the accusation, no way to negotiate the punishment: the president of the USA has the power to terminate the life of almost any person on this planet, with the exception of world leaders.
    Alas, the strikes authorized by this Nobel Peace Prize winner often end up killing civilians. Drones are not perfect, nor are the people who plan the attacks, nor is the information upon which they rely. The inevitable consequence is that every now and then, oops, you are dead: you had nothing to do with terrorism, and possibly you were even on our side, but, oops, we killed you by mistake. Since there is no due process, it is difficult to calculate how many innocents have been killed by those 400 drones. Anecdotal evidence, however, seems to indicate that for every bad guy the USA has killed one good guy, often a woman or a child. Not bad for a Nobel Peace Prize winner: 400 homicides and counting.
    The debate on drones (see for example these articles in the New York Review of Books, Atlantic and New York Times and Amnesty International's report) has largely focused on whether this kind of warfare is morally and practically "better" than the traditional one. Much of the argument indirectly depends on your faith in this kind of machines. If you think that computers, satellites and on-board electronics are highly accurate, you are more likely to support the use of drones. If you trust that the CIA and its informers are very reliable in pinpointing people and locations, you are even more likely to support drone strikes. However, the data are not so reassuring: the USA routinely hails as successful the same strikes that local villagers claim killed innocents. Even less reassuring is the fact that the USA has been so reluctant to provide data: one of the advantages of using drones in remote locations is that there are no "embedded" reporters and the locals have no channel to communicate with independent media. We would be happy to do statistics if the USA and its allies did not hide the numbers in a way that was not done before for conventional warfare. And we have seen what happens to whistleblowers in Obama's USA: the precedents do not encourage anyone to come forward with shocking revelations.
    A drone is devoid of common sense, and has, in fact, no idea of what a civilian is. A drone is simply a killing machine, a machine so detached from the human who "pulled the trigger" that nobody will feel any responsibility for its killing. Compare with what happened in Somalia in october 2013 when the commander of special forces aborted the mission to capture the Kenyan-born terrorist Ikrima (Abdulkadir Mohamed Abdulkadir) because children were present. A drone does not realize that children may be harmed.
    Both the Bush and the Obama administrations have been careful to frame the use of drone as a form of warfare. There is a "war" going on and the choice is between using "boots on the ground" or using drones. Therefore the pro-drone side pulls out statistics comparing civilian casualties during wars of the past and civilian casualties in the ongoing drone campaign. This is very convenient. Obviously the wars of the past have killed a ridiculous amount of civilians. Once you classify this as a "war", and compare it with wars, you have a valid argument that drones kill fewer civilians than, say, armies killed in World War I. The fallacy of this argument is double. First of all, we should compare today's wars with today's wars. Today's murder rate in Detroit is lower than the murder rate in 1760 London but nobody would consider Detroit safer than London: the murder rate in today's London is infinitely lower than in Detroit. The timeline does matter. Secondly, the drone strikes should more properly be considered as police operations: the target is not an entire nation (we actually go out of our way to reassure Pakistan, Afghanistan, Yemen and Somalia that we are not at war with their people) but one criminal or a handful of criminals. One can call "war" the campaign that the USA successfully fought against the Al Capone's mob but it was not a war: it was a large-scale police operation that spanned several decades, but still a police operation. If you consider the drone strikes as police operations, then you should compare the number of civilian casualties with the number of civilian casualties in police operations. We would fire and possibly prosecute any police chief whose actions result in such a high rate of civilian deaths. Why don't we use drones to fight criminals in Washington DC? Because it would kill an unacceptable number of civilians, exactly like it does in Pakistan, Afghanistan, Yemen and Somalia.
    The one extremely successful anti-terrorism operation was the killing of Osama bin Laden inside Pakistan. It was not carried out by a drone.
    It will be interesting to hear what the USA says when other countries start using drones too.

    To be completely fair: Pakistanis in favor of drone strikes (Economist article)

    TM, ®, Copyright © 2013 Piero Scaruffi All rights reserved.
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  • (october 2013) Obama's dilemma: To govern or not to govern. This is nothing new: a minority holds a government hostage because of some obscure maneouvering that determines the outcome of democratic elections. Countries like Italy have been indirectly run by small parties for half a century: neither of the big parties can form a government without a coalition with tiny parties and so the tiny parties make outrageous demands that would not be justified by the percentage of voters they represent. This happens all the time in many countries of the world, typically in countries that suffer from a proliferation of small parties.
    The USA is not such a country, because it has two giant parties and virtually no other party. However, a faction in either party can come to play a very similar role to the role played by small parties in other countries. The so called "Tea Party" minority of the Republican Party just did that: determined to "defund" the health care that became the law of the country on the first of October, the Tea Party staged more than just theatrics, they literally shut down the government of the world's superpower. They forced the entire Republican Party, usually run by wiser people, to line up behind their uncompromising demands. Ostensibly this is all about "Obamacare", the much hated law (by conservatives) that just went into effect. And, in fact, most tv shows are busy discussing Obamacare in order to asses whether the Tea Party did the right thing or not: fighting Obamacare may be worth a government shutdown if you think that Obamacare is really bad for the country.
    But this might not be about a minority holding the economy hostage, and not be about Obamacare either, as much as about some truly dirty politics that got away with little or no scrutiny from the electorate.
    First of all, here is the political background. Obama's approval rating: 43% (CBS/NY Times poll of september 2013). Congress' approval rating: it fluctuates between 20 and 10% (10% at the end of september according to the CNN/ORC Intl poll). Tea Party's approval rating: 22% (Gallup poll of september 2013). And now... drum roll... Obamacare approval rating: 45% (Quinnipiac University poll of september 2013).
    These numbers show that Obamacare is actually more popular than president Obama himself, who engineered it, twice more popular than the Tea Party that ferociously opposes it, and 4 times more popular than the Congress that is shutting down government over it.
    How is that possible? Doesn't it sound like political suicide by those who oppose it?
    No, the Republicans who stand up against it at all costs will not regret it at all, and will not be punished. In fact, they will be reelected. Almost certainly. Why? Gerrymandering. The two parties have carefully divided the country in political districts that, save rare exceptions, will always reelect the incumbent or her/his designated successor. The Republicans who oppose Obamacare are doing so because back home THEIR voters want precisely that. The will of the majority of the USA is irrelevant for the reelection of the individual member of Congress. The only will that matters is the will of their district, and that has been artificially shaped by gerrymandering to be as homogeneous as possible (overwhelmingly conservative or overwhelmingly liberal). The only thing that would hurt these Republicans is compromise: their districts have not been designed to foster compromise in Washington, they have been designed to corral conservative feelings. As long as they stick to their script, these members of Congress need not be worried about re-election. If they steer away from the script that got them elected, instead, they may get a much higher approval rating in the nation as a whole but they will be dumped by their district.
    Polls show that Congress has been getting more and more unpopular with voters; nonetheless, incumbents (the ones who get those low approval ratings) get routinely reelected: 94% of incumbents won in 2006, 85% of incumbents won in 2010. These are numbers that make Iran and China look revolutionary.
    So... the source of the problem is gerrymandering. The polarization in Washington is just one aberration caused by the gerrymandering of the recent decades: two parties that happily agreed at partitioning the country between themselves, to make sure no other party can challenge their supremacy.
    If each district were more evenly divided between Republicans and Democrats ("up for grab"), a Congress person would be very sensitive to what the national polls say. As it is now, the national polls are irrelevant for the political future of a Congress person and, to a large extent, for its party (presidents are not elected by the popular vote but by the electoral college).
    The president should do the honorable thing: resign. This is a country that cannot be governed. The people will not fully understand this as long as the president keeps pretending that it is governable.
    TM, ®, Copyright © 2013 Piero Scaruffi All rights reserved.
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  • (september 2013) Fox News. At 2pm on tuesday the 24th of september i was eagerly waiting to hear live on tv the speech by the newly elected president of Iran at the United Nation. It turns out that Bill Clinton and Barack Obama were talking about the new health care law at the very same hour. CNN was annoying enough: it covered the Clinton-Obama "debate" (actually just propaganda in favor of "Obamacare") and only showed in the background that the president of Iran was talking at the United Nations. Then i tried the other news channels to see if anyone was covering the speech. Luckily the government-funded C-span 2 was, and i started listening to the president of Iran talking about the international situation and promising Iran's push for peace. Then i checked the main news channels again and ended up on Fox News. I was shocked. There were five obnoxious "commentators" (sounding more like frustrated househusbands and housewives) talking over the images of the president of Iran. They never (never) let the listeners listen to the president of Iran. These five pathetic individuals kept talking about how bad the United Nations are, how evil Iran is, how annoying these meetings at the United Nations are, and so forth. All of this endless chatter while the president of Iran was talking about peace. Then the speech ended, and Fox News moved on to the Clinton-Obama "debate". Again these five incompetent amateur started talking over the images of Clinton and Obama, and, again, Fox News never let the listeners hear what Clinton and Obama were actually saying. The five "commentators" simply started shouting (sometimes in truly hysterical tones) their own anti-Obamacare propaganda. We could see Clinton and Obama talk to each other but hear no word of their conversation. Instead, we could hear the litany of complaints by the Fox News commentators. I am far from being a supporter of Obamacare, but this ridiculous show by Fox News almost made me a fan of it. This is "fair and balanced" news coverage in the USA of 2013. I apologize to the president of Iran on behalf of the people of the USA.
    TM, ®, Copyright © 2013 Piero Scaruffi All rights reserved.
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  • (may 2013) Google Glass and the business of monetizing other people's lives.
    Google Glass is a wearable computer equipped with a camera. One way to look at it is that, instead of carrying a multifunction gadget like a smartphone in your pocket, you mount it on a body part (in this case your head) so you look really stupid. That's the benign way to look at it. The other way to look at it is that now you can photograph and film whatever you are looking at, which includes anybody in your visual space, without asking for permission and with lower probabilities of being caught in the act than when you were using a camera that you had to point at the subject.
    Google Glass is not dangerous because it invades your privacy: privacy is largely an outdated concept in 2013. In fact, we got to the point that, if i cannot find any information about you on the Web, i get suspicious about you. Very soon it will be indispensable to be widely exposed on the Web in order to find a job or be accepted at a university. Privacy is no longer a right but more like an obstacle to your career goals. Hence i don't really care about invasions of privacy anymore. In fact, it might be useful if you are ever wrongly accused of a crime or of cheating on your wife or of stalking a girl. I can easily prove where i was with credit card receipts, online travel itineraries, etc.
    Google Glass is not dangerous because it is unethical to use it. Any obnoxious Google employee wearing them is obviously not being polite to you in the first place (hence i encourage you to spit in the face of anybody wearing them in front of you, so they will have lots of videos of people spitting at them to share with their Google+ friends), but that's not a big issue either: many commuters on the freeway are not polite to you. Google Glass will simply reinforce the message that you don't need to care for other people's feelings, a trend that has been pervasive for decades in every part of the world as the world becomes more and more materialistic. Good luck changing the world.
    Google in general, not just its Glass, is dangerous for a different reason, and any invention coming out of Google has to be watched with skepticism, and perhaps sheer fear, but for a different reason.
    As Kelly Fiveash has written, "Google is first and foremost an advertising company". Its wealth largely depends on the desire by thousands of advertisers to capture the attention of billions of consumers. Google's products are specifically designed to maximize its advertising revenues. From Google's point of view, you are not a human being: you are just a vehicle to sell advertising space to whichever company is interested in selling you something. By definition, Google has always minimized the rights of ordinary people to control what Google does with their lives. There is no privacy right built into Google's mission statement, and certainly not in its business plans. Every time Google (or Facebook for that matter) is forced to provide privacy to the world's population it loses billions of dollars in potential revenues. If Google and Facebook were banned from profiting from people's private lives, they would be as big as the big newspapers (currently going out of business because Google and Facebook stole their customers).
    In a sense, Google's business plan relies on always having "privacy-violating technology" one step ahead of "privacy-protecting laws". As Google's CEO Eric Schmidt said: "There is what I call the creepy line: the Google policy on a lot of things is to get right up to the creepy line and not cross it" (his words, not mine). Eventually laws will be enacted to limit what someone can do with Google Glass (or, quite simply, Google will voluntarily limit what its Glass can do). By then Google will have come up with another device or service that can increase its advertising revenues by straddling the "creepy line" in some other way. Google is fighting a battle to stay alive. Like all corporations struggling for survival, it will not stop at anything.
    What is threatening is not this specific product, but the very nature of these monsters (Google, Facebook and all the smaller ones that rely on advertising revenues). We used to be afraid of business monoliths because of their power to kill smaller companies and create monopolies, that would then sell us any junk at any price, but now we are facing a different kind of threat, the threat from companies that see human lives as simply tools to sell advertising. Your private life is a business opportunity for Google, Facebook and the likes. How does it feel that your private life is someone else's business opportunity?
    Marc Rotenberg (the Electronic Privacy Information Centre) was absolutely on target when he reasoned that Google Glass would be less scary if it were sold by a traditional consumer electronics company like Sony (that makes money selling huge volumes) rather than by a creepy advertising intelligence (that makes money pimping your life online).
    Google is right that, per se, Google Glass doesn't offer any new feature that was not available before in millions of smartphones; and i will add that Google did not invent smartphones, did not invent wearable computing and did not even invent Google Glass (Steve Mann had already built a wearable computer with a videocamera, the EyeTap, in 1981). The issue is not the nature of the product, it's the nature of the company. At stake is not my right to defend myself from a few morbid dysfunctional voyeurs (all of them Google employees so far), but to defend myself from a huge bureaucracy and supply chain that extends worldwide exploiting my life for unknown purposes beyond my control: the better tools you give them, the more efficient their operations will be. At worse a voyeur becomes a sexual predator (bad enough), but that worldwide octopus has the potential to become an online weapon of mass destruction.
    See also: The demise of Google (which proves how naive i was).
    TM, ®, Copyright © 2013 Piero Scaruffi All rights reserved.
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  • (april 2013) Barack Obama, serial killer.
    As time goes by, it gets harder to deny that George W Bush's administration was serious about capturing (not killing) "enemy combatants": under Bush the USA had set up a vast apparatus of prison camps all over the world. That (largely top-secret) network of jails became a thorny issue, since those prisoners were not allowed a lawyer and were in some cases tortured. Most of the damage was done by demonstrations against what was perceived as an illegal and amoral action, one that vividly collides with the principles upheld by the constitution of the USA and by commonly accepted principles of human rights. Bush went down as a villain willing to break any law in order to carry out his oil-motivated wars.
    The Obama administration did not make the same mistake. Instead of trying to capture suspected "terrorists", Obama simply kills them. The drone strikes that were the exception under Bush have become the norm under Obama. The way a drone strike works is simple: someone walks into Obama's office with the name of a suspected terrorist and a file that documents the evidence, Obama weighs the evidence and then signs off to the killing, a drone is activated and the "terrorist" is dead. If the evidence was wrong or Obama is distracted or in a bad mood, oops, we kill the wrong person; and maybe a few innocent passers-by; and maybe a few children. Not a problem: very few voters will ever notice. Obama's drone strategy has the big advantage that, as ridiculous at it may sound, there are laws to protect prisoners captured in battle but there are no laws to prevent the killing of an "enemy combatant". It is also a much easier decision to make. The decision to send a commando to kill Osama bin Laden was an extremely difficult and dangerous decision to make. It may have resulted in the killing of several soldiers. It may have resulted in the sort of fiasco che caused president Carter his political career. On the other hand, ordering a drone strike is trivial: just a signature on a piece of paper. The consequences of a mistake will hardly be noticed in the USA.
    In september 2012 a drone strike in al-Baitha province killed 13 innocent civilians. It was just the latest of such incidents in which the relatives of the victims argued that the targets were innocent. It takes months for reporters to find out the truth, but there is overwhelming evidence that many innocents have been killed by drones in Pakistan, Afghanistan and Yemen. Their names will never appear on the television screens in the USA. Their relatives will never be interviewed on news channels in the USA. But those were human beings. Those were men and women at work, and children playing in the backyard.
    When Bush was arresting the "bad guys", the mistakes were (at least in principle) possible to correct. When Obama kills a man by mistake, there is nothing that can be done to correct it.
    Needless to say, this policy of drone strikes has been creating more terrorists than Al Qaeda ever dreamed of. They are not members of Al Qaeda: they simply want to avenge the victims.
    The other drawback is about information. Investigators can learn something from prisoners, nothing from dead bodies. The Bush administration was focused on making terrorists talk (with dubious means, but that's another story). The Obama administration has basically given up on interrogations. This means that the country is less safe because the USA increasingly knows less and less about the plans of terrorist groups. It also means that the evidence used against the next victim is presumably less valid than the one used years ago in similar circumstances. The chances that we kill innocents increase as the quality of the evidence decreases.
    The USA pioneered many kinds of warfare that are now banned, from nuclear bombing to napalm and to white phosphorus. When the USA used them, it was ok. It became less ok when others stocked them and planned to use them. The USA has just pioneered another one of these deadly weapons: the unmanned drone. Every country in the world is probably eager to acquire some, and that includes regimes that specialize in killing journalists (like Russia) and regimes that specialize in arresting dissidents (like China). The USA is de facto teaching them a new, more effective way to deal with their domestic problems. It won't be long before a nosy journalist is killed by a drone in Russia and a Tibetan monk is killed by a drone in China.
    In retrospect, George W Bush was more humane than Obama (at least the prisoners of Guantanamo have a chance to prove their innocence if they are innocent) and possibly even smarter (all those prisoners probably provided at least some valuable information).
    TM, ®, Copyright © 2013 Piero Scaruffi All rights reserved.
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  • (april 2013) A rebuttal of the liberal worldview.
    Five years ago i promised a liberal counterpart to my article A rebuttal of the conservative worldview and then never found the time to write it. Here it is. Apologies to conservatives who felt discriminated (understandabily so).
    In general, liberals are descendants of Descartes and Newton: they are very rational beings who believe that rational society works better. You cannot argue logically with them because they win: they are the ones using rational logic to determine what is right and what is wrong. They derive morality from rationality, something that is, in fact, very unnatural. They assume that a rational morality will work better than the old-fashioned morality founded on "superstition", but they have no proof of this theory.
    What they fail to realize is that rationality is not always the best way to go. It is rational to assume that gay couples should have the same rights as heterosexual couples, but it may not be a good idea for other, less rational (or at least less obvious) reasons. It all depends on what your goal is. If you goal is to create a cohesive society, then it is probably a bad idea to weaken the institution of marriage, and there has been a rapid sequence of "liberal" triumphs (abortion, divorce, the pill, women's emancipation, and now gay marriage) that have resulted, de facto, in a war on marriage. Fewer people marry, more people divorce. There is no final verdict yet on whether this creates a more or less cohesive society, but let's assume that the old-fashioned "superstitious" skeptics are right and that a weaker institution of marriage will create a less cohesive society. History shows that the winner has not always been the richest or the most technologically advanced. Poor and primitive tribes of "barbarians" easily overthrew the mighty Roman Empire; poor and primitive Arab tribes easily overthrew the rich Byzantine Empire and the rich Persian Empire; and the poorest and most primitive of all, the Mongols, quickly created the largest empire ever seen on Earth. Look closely and you'll notice that the winners had only one huge advantage: they had much more cohesive societies. The rich and advanced empires that collapsed were weakened by a "decadent" society. The British Empire is not an excpetion to this rule: it collapsed rapidly after World War II, despite having won it, despite having the highest number of Nobel Prize winners, despite having the immense wealth of London's financial district: the Indians, the Arabs and the Africans easily won independence from the British Empire. Later the new superpower, the USA, was defeated in both Vietnam and Iraq, countries that were extremely poor and backward. The lesson learned from history is that often (not always) the most advanced weapons are no match for a cohesive society. Therefore liberals eagerly embrace abortion, divorce, contraceptives, gay marriage and so forth based on pure logic, but overlooking the consequences that these decisions may have on the institution of marriage, thus overlooking the importance that the institution had on human civilization since its invention (and there must be a reason if a promiscuous ape like Homo Sapiens at some point invented it), and thus overlooking the long-term consequences of weakening that institution.
    Rationality leads to "obvious" conclusions that are obvious only for the limited viewpoint of the rational person. As John McCarthy famously pointed out, it is impossible to foresee the side effects of an action: they are infinite. Even if one had all the knowledge that the human race has, it would still not be enough to determine with certainty the effects of an action; and each liberal has only a tiny fraction of that knowledge. Children are dying of malaria in Africa because decades ago a well-intetioned woman launched a successful campaign to ban DDT.
    Next. Liberals prize education. Everybody does. But liberals turned education into the equivalent of religion: an indisputable dogma. Education in science and technology is not wisdom. You may know exactly the way a light bulb works but not realize that it would be more efficient to simply move the bookcase that is blocking sunlight from entering the room. Science and technology are useful tool, but liberals turn them into ends, not means. If we want to create a society ruled by logic and technology, we might as well create a society ruled by machines. Not many people view that society as a lot of fun, though.
    The rational approach to social issues is not even as consistent as it may appear. Liberals are generally opposed to the death penalty but then generally defend a woman's right to choose (i.e. to kill a foetus). That requires a narrow definition of "life" that admits even an ant as a form of life but downgrades your own child to a piece of inert matter. One can't help thinking that the goal is to defuse responsibility for sexual behavior rather than an objective discussion on what constitutes "murder".
    When it comes to foreign policy, liberals can be frustratingly confusing. On one hand, most liberals will uphold the right to vote, and will get hysterical at any hint of undemocratic behavior. That's at home. Abroad, instead, liberals tend to be hardcore pacifists, and that's a relatively new stance (in the old days liberals were the first ones to volunteer to fight against dictators anywhere anytime anyhow). Liberals who pretend to be compassionate about their own poor disadvantaged communities act extremely selfish about the poorest of the world, the thousands massacred with chemical weapons, and the millions who don't have freedom of press. Liberals have a very parochial and dysfunctional view of human rights: the slightest impropriety here at home must be severely punished, but the grossest violation in another country must be ignored. Therefore for them it was a terrible mistake to remove Saddam Hussein from power, and even terrible to remove the Taliban from power. Therefore for them the solution to stopping Saddam's mass killing was to stop buying his oil (as if this would suddenly turn a dictator into a saint) or, better, impose sanctions that mostly punish ordinary people, or, better, simply stop reporting from Iraq. Hence for them the solution to stopping the Taliban from stoning women to death was to send a telegram saying "naughty naughty naughty". The liberals have always shown an amazing willingness to believe the other side's propaganda in order to minimize the motivation to go to war. Therefore the Vietcongs were not so bad after all, the Soviet Union was not so bad after all, and so forth. Whenever a regime is hated by its own people, resulting in millions of refugees, the liberals find a way to justify the regime. The real reason is simple: the liberals don't want to pay to help others. It's selfishness, not wisdom. Then, of course, liberals blame all the dictatorships and wars of the world on the evil multinationals, the secret services, etc, but never on the fact that liberals have done everything they could to keep those dictators in place.
    Liberals accuse "unbridled" capitalism whenever there is an economic crisis at global or local level. It is easy to accuse the capitalists whenever you lose your job or you lose your home. But capitalism has been corrupted in so many ways by socialist ideas that it can hardly be blamed for any evil anymore. Nonetheless, it gets routinely blamed for ALL evils by liberals. The truth is that socialist ideas, such as retirement plans, job protection, universal health care and protection against discrimination, that were originally introduced for very noble reasons, end up making the capitalist system not very capitalistic and causing the exact same problems that the old communist countries experienced (a kind of knowledge that is rapidly being lost as people grow up in a mostly capitalist world), namely poverty and stagnation. The wealth of the average family in the USA has been declining since the 1960s and liberals keep blaming conservative policies that favored the rich for this phenomenon ignoring that the 1960s were the decade when policies when so many rules and regulations were introduced to limit the freedom of capitalists. This is even truer in Europe, that experienced an even more impressive economic boom in the 1960s but was then torn by strikes and riots that forced governments to "socialize" much of the economy. European economies progressively lost their luster and kept accruing huge national debts. Eventually the welfare system collapsed. This was not due to a failure of capitalism, but to the contamination of capitalism with socialism. Western Europe and the USA became the richest regions of the world when they were purely capitalistic, with little or no oversight by the state.
    State intervention in capitalism has, ironically, been often to the advantage of the rich even when it was designed to protect the poor. A typical example is the protection that big business enjoys in Western Europe: unions march in the street if a big company is allowed to lay off workers, but that means that governments have to "bail out" big companies when they are failing. That bail out distorts the logic of capitalism: those companies should go bankrupt, and their owners lose money, allowing other companies, run by smarter owners, to make money and hire workers. European governments have consistently helped bad companies stay in business and therefore prevented "startups" from emerging with better ideas. In the short term this has helped create capitalist aristocracies who are virtually guaranteed never to lose their money and in the long term this has stifled innovation and caused economic stagnation resulting in a tougher job market. Ordinary families have been hurt twice: their taxes have been used to guarantee the wealth of the capitalists and their children are growing up in a tougher job market.
    In return, the semi-capitalist state has been forced to hand out "entitlements" to ordinary families. The Western capitalist state has increasingly become a socialist welfare state that collects taxes and distributes money to the elderly, the poor and the sick. This is, in principle, very noble, except that someone has to pay for it, and the cost is detracted from the money that goes into the economy to keep the economy growing. Inevitably, it suffocates the economy. Worse: because everybody wants everything, governments have tended to promise more than they can deliver, i.e. governments routinely spend more than they earn. This has created the government debt of 2013 that weighs on current and future generations.
    False capitalism results in a state that increasingly help the rich so that companies will not go bankrupt and ordinary (non-rich) folks will not lose their jobs.
    False capitalism creates national debts that hurt mostly ordinary families, not the rich multinational corporations that can easily find ways to make money in other countries.
    And, yet, socialists blame capitalism for all the evils caused by socialism. The situation is very similar, in my opinion, to the way religious fanatics keep blaming atheists for the evils (povery, racism, violence, ignorance, tyranny) caused by their religion.
    TM, ®, Copyright © 2013 Piero Scaruffi All rights reserved.
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  • (march 2013) Why economists are dangerous.
    I heard a terrible talk by Stanford economist John Taylor. His analysis of the economic problems of the USA is purely economic (and, for what it's worth, mostly blames government intervention). He even tried to prove that the ridiculous wealth gap of our days is not so bad as it looks, that the rich are not as rich as it appears in the statistics and in any case it is not as bad as it sounds that 1% of the population owns most of the wealth. Fine. He's obviously entitled to his wild cheering of the private economy and of Wall Street greed, virtually denying the common sense view that the Great Recession was caused by bankers and speculators. The funniest part was the ending because he asked us to look to China as an example of what nations should do: liberalize the economy. It is absolutely amusing to hear a conservative economist talk about the wisdom of China's Communist Party. He didn't mention that the economic improvements in China mirror similar improvements in the economies of all previously communist countries, as well as in countries from Morocco to the Philippines, but i guess i digress.
    What i found interesting (and it's not the first time) is that these extremely influential economists sound so incredibly ignorant of the political and scientific events of their age, as if economies existed in a vacuum, indipendent of history and science.
    It is not a matter of being conservative or liberal, just of reading the headlines or watching television. The high unemployment rate that Taylor tries to explain with all sorts of statistical somersaults has its roots in the low rate of job creation of the early 2000s. It doesn't take a genius in world history to realize that it corresponds with two major changes in the way the world looks like: the process of globalization, and in particular offsourcing, that followed the fall of communism and the conversion of most of the world into cheap-labor capitalism; and the Internet economy, that replaced thousands of brick and mortar businesses with one-person online businesses (maybe not just one person, but you get my point: for example, thousands of advertising departments in newspapers and magazines around the country replaced by Craigslist that at employed less than ten people). I would also add the chronic government paralysis that democracies seem to experience, due to an increasingly divisive political discourse, due to the increasingly pervasive scheming of all sorts of lobbies.
    Even scarier was the fact that nobody in the audience (mostly students and scholars of Economics and Management) noticed this glaring omission of historical factors: all the questions were about technicalities.
    It tells me not only how far removed from the real world the economists are but the kind of company they keep: obviously they don't know anybody who lost her/his job because of offsourcing or of the Internet. Most of us know not only someone but many people whose life has been changed dramatically by globalization and/or the Internet, and in many cases the change has not been positive. In some cases it has meant a collapse in income, in some cases a complete change of career (often with lower income). Therefore ordinary people who never studied Economics end up chatting at the cafe of how the global economy and the Internet have reshaped economies whereas economists are clueless that dozens of countries have turned from socialism to capitalism and that we now order books from the Web instead of walking to the neighborhood bookstore.
    These economists hang out with Wall Street investors, venture capitalists, and the very billionaires that are the topic of these talks. It is scary, to say the least, that these are the people who advise our government on matters of economy. Taylor is absolutely right: his theory works in places like China that come from a state of starvation and stone-age technology. What he needs is to first replicate that state of starvation and stone-age technology, and then his recommendations would work wonders, just like they have been working in China. That's the dream world of economists who don't study history and science.
    TM, ®, Copyright © 2013 Piero Scaruffi All rights reserved.
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  • (march 2013) The War on Drugs: What's the Point? The moment one argues in favor of liberalizing drugs people accuse him of being a drug addict: i have not done drugs, do not do drugs and do not intend to do drugs. I care for my brain. Just like i do not smoke because i care for my lungs and i do not eat junk food because i care for my heart.
    That said, i find the whole war on drugs declared by the USA utterly ridiculous. It has not even slightly dented drug consumption in the USA and it has created real wars in half of the world. Thousands of people die every year in Mexico because of the drugs bought by people in the USA and of the guns sold by stores in the USA. (See The other war on drugs). Tens of thousands of people are in jail in the USA for having used drugs, costing the taxpayer a fortune. The overall price paid by the world for this "war on drugs" has been colossal. I miss the point.
    In 1729 China banned opium. In the 1780s Western traders started smuggling opium into China. In 1839 the imperial emissary Lin Zexu arrested 1,700 Chinese opium dealers in Guangzhou, seized tons of opium from foreign traders and wrote a letter to Queen Victoria of Britain urging her to stop the opium trade. The result? Britain attacked China in full force (the "Opium War"). Then in 1919 it did precisely what the Chinese had asked: it banned opium. Between the 1780s and the 1910s, however, opium accounted for a staggering amount of revenues. It created the wealth of European and American families, a wealth that funded many great cities of the USA and of Britain. Some of the greatest cities of Asia (Guangzhou, Mumbai, Hong Kong and Singapore) owe their power to the opium trade. In modern times the wealth of one of the richest countries in the world, Switzerland, has been created thanks to, among others, money deposited in its banks by druglords (and all sorts of criminals). Cyprus' economy depends on the huge deposits kept in its banks by Russians, many of which are suspected of being involved in organized crime.
    Of course, this is not the only case of "criminals" who became rich and were eventually "forgiven" and accepted by society. Think of the pirates of the Caribbeans, whose descendants now run "Atlantis" in the Bahamas. That does not mean that we should legalize piracy. However, drugs are different: they are not an assault by one person over another person. They are just like fast food, cigarettes and many other harmful hobbies. If you want to harm your health instead of, say, reading Dostoevsky or listening to Shostakovich, why should the government interfere?
    The same government that once bombed Panama and arrested its dictator Noriega for helping the drug trade now supports the government of Afghanistan, which would not survive without its vast trade in heroin.
    One could argue that addiction is the very foundation of capitalism. Every profit-making organization has a vested interest in creating an addiction in its customers. And it starts from a young age, with cartoons and videogames (and tomorrow with something else). Companies compete to hook children onto some kind of addiction. It then continues in life as you are getting addicted to salty food and sugary drinks, all items that are specifically designed to get you hooked forever. The vast majority of the services that we find "indispensable" are actually unnecessary luxuries, from cable television to smartphones. We simply became addicted to them. Some big companies designed a product or a service to become addictive and keep promoting it to make sure that millions of people will become addicted to it. The worst addiction (in terms of how it devastate people's lives) is probably the addiction to shopping, especially when armed with credit cards; and, still, it is perfectly legal, and even encouraged by the government. Countless kids get hooked on credit cards by unscrupulous banks and will spend their lives paying back credit card debt at high interest rates, and this whole industry is regulated by the government. Addiction is very much part of the capitalist world, and it is debatable which kind of addiction is more harmful to the individual. Obviously checking your Facebook "wall" on a smartphone is a major distraction that keeps you from reading literature or studying science, and therefore contributes to making you stupid, which some of us may consider worse than being a junkie. And parents are routinely worried when their children spend too much time watching cartoons because it detracts time from studying, a fact which, in the long term, may take a toll on their chances of succeeding in life. Addiction makes money for those who sell it and costs dearly for those who buy it. It is not only hallucinogenic drugs. Or, if you prefer, we created a vast economy of "hallucinogenic drugs" if you include cartoons and smartphones in that category.
    When i was in Peru at the peak of the war against cocaine, a farmer told me a simple truth (that later i heard in more ornate words by a president of the country): "If North Americans want bananas, we grow bananas; if they want coca, we grow coca. We only want to feed our children. You decide what we grow." It makes no sense to punish the producer: people will grow drugs for as long as it is lucrative, and gangsters will get very rich smuggling them into the USA for as long as Northamericans want them. If the USA is serious about fighting a war against drugs, at least start shooting at the consumers and let along the producers, who are simply farmers and businessmen just like any other. We don't bomb factories that make the worst polluting plastic, nor do we bomb McDonald's that is probably responsible for millions of heart attacks around the world. The government does well when it educates people about the risks of consuming such substances, but that is how far it should go. One can list many, many, many habits that are harmful, and many of them are as addictive as heroin (e.g., watching soccer). Let people decide how they want to waste their hard-earned money and tax them. And use some of the taxes to promote the benefits of buying bananas and oranges instead of heroin.
    Opponents of the liberalization of drugs are afraid that society will have to pay for a growing number of rehabilitation centers. It seems to me that the exact opposite will happen: a better educated public will stay away from drugs. I also suspect that a lot of kids try drugs precisely because they are illegal, just like kids in the USA can't wait to be 18 so they can get drunk. Sometimes prohibition is the best form of advertisement. In any event, my opponents should use the same argument against fast food: we all pay the price for obesity, high cholesterol and heart attacks (it affects the cost of health care in general). Should we ban fast food? Should we ban all fat food, from meat to milk? Personally (being a vegetarian), i would be very happy if governments started taxing meat-eaters and fast-food joint patrons more than healthy eaters. That is one strategy i would totally approve: let's tax substances proportionally to how much damage they cause to health and to how addictive they are.
    Opponents of the liberalization point to the addictive power of these drugs. True, but what is not addictive? The biggest killer in the USA, among addictive substances, is alcohol, which is regularly consumed by the vast majority of the population. It has also cost thousands of lives in car accidents. Some soft drinks and some packaged snacks are specifically designed to be addictive so you will buy more of them. You can easily get addicted to sweets. Marijuana is addictive, and i don't think it is good for your health, but i haven't seen any study that tells me marijuana is more addictive than alcohol or that its effect on your health is more serious than the damages caused by alcohol. I would love to see a study that compares all substances based on degree of addiction and health damage. I suspect that many perfectly legal substances would make that list. I also suspect the public would finally learn how addictive and dangerous many "medicines" are, medicines that are routinely prescribed by the very doctors who are supposed to take care of our health. Too frequently it is big money that decides what is legal and what is not, not science, and mot morality.
    I like the idea that some substances are banned in public spaces (where i live alcohol is banned on beaches and smoking is banned in any building other than private homes). I find it very annoying to be around people who are smoking weeds (i like neither the smell nor the attitude): it is perfectly fine with me if, initially, we limit the liberalization of drugs to private residences. What you do in your house is really not my business. As long as you don't bother anybody else, it shouldn't be the government's business either.
    TM, ®, Copyright © 2013 Piero Scaruffi All rights reserved.
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  • (february 2013) Capitalism and Socialism in the USA.
    The word "socialism" is virtually anathema in the USA. When conservative commentators want to insult a liberal politician, they call her or him "socialist". Anybody who uttered a nice sentence about the Soviet Union, Vietnam or Cuba, has been haunted for life by that sentence. However, as it is often the case, the mainstream media may have distorted both the facts and the dictionary.
    A century ago there were two forces confronting each other: socialism and capitalism. We say that socialism lost, but that is not completely true. Socialist countries became somewhat capitalistic (although neither Russia nor China are truly free markets) while capitalist countries became somewhat socialists (Western Europe in particular). So it was truly an exchange of features: one country gets rid of centralized planning while the other one adopts socialized medicine, and so forth. The world is converging towards a model that is partly socialist and partly capitalist. Or, better, the point of convergence is: as socialist as a state can afford without going broke. Whether this is good or bad i'll let future generations decide.
    Capitalism and socialism have probably never been mutually exclusive, and now less than ever.
    To start with, the USA differed from the very beginning from the free market model of Britain. The model in the USA was one of government-assisted capitalism: the turnpike from Maryland to Illinois (1803-1848) was funded by Congress, the Erie Canal (1825) was funded by New York State, the Transcontinental Railroad (1869) was subsidized by Congress, the Homestead Acts (1862) that granted lands to farmers west of the Mississippi was enacted by Congress, the Roosevelt Dam in Phoenix (1911) was funded by Congress, the Owens Valley aqueduct to Los Angeles (1913) was funded by Los Angeles, the Panama Canal (1914) was funded by Congress, the giant multi-purpose dams, aqueducts and canals of the 1930s were funded by Congress (Central Valley Project and Tennessee Valley Authority), the freeway system (1956) was funded by Congress, the space race that led to the Moon landing (1969) was funded by NASA, the Arpanet/Internet (1969) was funded by DARPA, the Global Positioning System or GPS (1972) was funded by DARPA, etc. Many of the large-scale projects that changed the lives of millions of families and turned the USA into a superpower were "socialist" in nature.
    The USA is actually one of the few countries in the world in which the state pays for almost all roads. Elsewhere, you typically have to pay a toll in order to use a highway. In the USA the highways are mostly free (hence "freeways") because they are paid, built and maintained by local, state and federal agencies. There is no free bus and no free train, but most roads are free. Oil companies are subsidized too, which accounts for the cheap gasoline prices in the USA. (This, incidentally, creates an obvious distortion, as public transportation is not subsidized as much as roads by the state, which explains why many places in the USA have horrible or non-existent public transportation compared with other countries in the world: you are much more likely to take a train when you have to pay a $10 toll and $10 in gasoline to drive a 100 km distance than when the road is free and gasoline is half the price it would be without subsidies to the oil companies). In fact, car manufacturers themselves are subsidized by the government: two of the big three were literally saved by the government when they were about to go under.
    The contradiction has been there since the beginning: Jeffersonians opposed to big government, whereas Hamiltonians favored government intervention. Mariana Mazzucato thinks that the USA "talks" Jeffersonian but actually "acts" Hamiltonian.
    Thankfully, the government of the USA has invested massively in inventing new technologies and then into spreading them. Some of those technologies (from the railroads to the Internet) account for several economic booms of the nation. In fact, there has been no creation of wealth by democratic decisions: if one had asked the people of Santa Clara county to vote on computer technology, chances are that those farmers and loggers would have voted no and there would be no Silicon Valley.
    There is even a form of "socialism" that is hidden in the bureaucratic details of capitalistic nations: tax deductions and exemptions. Whenever a tax deduction/exemption is introduced, that de facto works as a government subsidy for a sector of the economy just like the centralized decisions of socialist/communist countries. Mortgage-interest deductions are meant to boost real estate. Charitable deductions keep in business whatever project the government bureaucrats have deemed "charitable". The deduction for employer-provided health insurance helps the health insurance business. Even the taxes that don't exist are a socialist way for government to steer the economy: dirty energy is not taxed the way it should be if (as logic demands) the costs of cleaning up were included, and therefore it is de facto encouraged, as environmentalists love to point out.
    Recently, we witnessed the conservative governor of New Jersey, Chris Christie, lambasting his own Republican Party because they were standing in the way of a bill aimed at delivering billions of dollars to the victim of a strong storm. The bill included the usual pork-barrel items (even money for Alaska fisheries that were not affected at all by the storm). And of course the former Alaska governor Sarah Palin was in favor of a "bridge to nowhere" before she turned against it when it was discovered by the media. These are all cases in which strongly anti-communist politicians reveal that they are more than willing to accept socialist gifts. The reason is not that they are corrupt but that they are hypocritical and false: they bash socialist policies when in fact they know that not all socialist policies are bad. Helping people in need, ultimately, helps the country as a whole. The issue is whether the government is bankrupting itself in doing so, in which case the socialist policy is probably a really bad idea (as it was in the Soviet Union).
    The ultimate case of hypocrisy was probably the government bail-out of the banks, enacted with approval of both departing president George W Bush (a fierce anti-communist) and new president Barack Obama. The government spent almost 700 billion very socialist dollars to salvage Wall Street, the headquarters of world's capitalism. Whether you believe them or not, our politicians told us that this act of socialism was essential to save the country, which means that, according to them, some degree of socialism is not only good but essential.
    The ultimate version of socialism is, of course, the Silicon Valley startup. Socialism prescribes that the workers should own the company for which they work, and that's precisely the model used in Silicon Valley. The startup is basically a variation and an improvement over Marx's original model: instead of each worker owning the same share of the company, workers own shares that are proportional to their importance and to how long they have worked there.
    Unfortunately, one can also find socialist practices in the way government handles citizens. There is increasingly more scrutiny by the government, and probably the differences between the FBI of 2013 and the KGB of the old Soviet Union, when it comes to surveillance of ordinary citizens, has never been so blurred. The president of the USA has even approved the assassination of citizens: Anwar al-Awlaki, a native of New Mexico, and two friends were killed by a drone in Yemen. There was no trial and nobody has been allowed to investigate the case. One has to go back to Stalin to find similar policies applied in the Soviet Union.
    When, after the 2001 terrorist attacks on New York and Washington, the US president George W Bush said "You're either with us, or against us" he didn't know that he was quoting Lenin's famous "Whoever is not for us is against us".
    TM, ®, Copyright © 2013 Piero Scaruffi All rights reserved.
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  • (february 2013) Why the USA is the land of opportunities The Great Recession that started in 2008 was useful to analyze the behavior of the average person born and raised in the USA compared with the behavior of immigrants born and raised elsewhere (particularly those born and raised in Asia, Africa and Latin America). The fact that showed up in the official statistics is that people born and raised in the USA don't save enough to protect themselves from rainy days. Immigrants, instead, have a much higher saving rate and a wider support network. The consequence was that the vast majority of families that lost their homes when the real estate bubble burst were native, and immigrants were numerous among those who bought those very foreclosed homes.
    A less visible factor, but one that compounds the severity of the previous one, is how "distant" family members are, even in places where, in theory, the unity and closeness of the family is sacred. There is just no comparison with the degree of closeness among family members (and friends) in the developing world and in the USA. Immigrants help each other at a much higher frequency and to a much higher extent than natives do. This means that, even in hard times, it is easier to find the money to send children to a good school, find a job, and find cheap repair services (a mechanic to fix a car or a plumber to fix a bathroom problem) for immigrants than for natives.
    Children of immigrants often live with their parents until they are financially self-sufficient, and sometimes even later. Siblings start families in nearby neighborhoods so that they can help each other when needed (instead of having to hire babysitters, nurses, handymen, etc).
    Those born and raised in the USA (even the young ones who are at their first job) are much pickier about which job they take. Immigrants are more willing to take jobs for which they are overqualified, whether in gardening, construction or engineering. Kids born and raised in the USA sometimes remain unemployed because they are not willing to take a job that is not what they studied for, not what they need on their resume, or not what they need to impress their dates. I even saw one man turn down a job because it wouldn't pay enough to cover his rent and credit card debts and thus remain unemployed with zero income. It is not only that the immigrants make money while their native counterparts are getting into more and more serious debt: the immigrants also acquire more experience, make more connections and run into more opportunities than the natives who stay home waiting for the dream job.
    Natives are also spoiled in the housing they accept, and, in general, in what they purchase/rent. Immigrants are willing to live with relatives or in small cheap rooms, even when their income is picking up. Natives with the same or lower salary often don't even consider living with relatives or in small cheap rooms, even when their income is collapsing rapidly. Immigrants compete for the cheapest rooms on the block. Natives compete for the best apartments on the block. And this difference in behavior is not proportional to a difference in income but to a difference in attitudes towards money.
    In general, natives and immigrants have literally different definitions of "luxury" and "necessity". What most immigrants consider luxuries (and will pay for only when income permits it) are viewed as necessities by most natives. There is a virtually infinite list of appliances, gadgets and furniture that the average household in the USA feels compelled to buy. An immigrant who has to destroy confidential documents lights a match to burn them; a native buys a "paper shredder" at the mall. An immigrant is more likely to carpool and more likely to live without the latest mobile phone model; a native is more likely to complain about the price of gasoline while driving alone in a big gas-sucking SUV, and more likely to happily spend a fortune on a monthly contract for the latest cell phone model. Over a few years these monthly expenses make the difference between having cash for a downpayment on a home or being forced to rent for the rest of your life.
    Ironically, these different attitudes don't even guarantee a better quality of life for the natives who are pickier about everything and more likely to spend on everything. Obesity, heart conditions, diabetes and you name it affect natives much more often than immigrants. The quality of relationships too is inversely proportional to the willingness to spend on unnecessary items: natives are more likely to divorce, to have no real friends, to become alcoholics or drug addicts, to get a sexual disease, to end their lives alone in a senior community, and to commit suicide. It is wildly debatable whether the relatively lavish lifestyle of the natives leads to having more fun (the frequency of sex and intoxication is not a good indicator).
    The good news for immigrants is that these attitudes make it easier for the outsider to catch up. You come to this country with almost nothing, sometimes without even speaking the language, and you still have a chance to succeed because within a few years your habits will allow you to catch up in income and power with the natives who have wildly different habits.
    Don't try this in Asia, Latin America, the Islamic world or Africa: it works the other way around. If you emigrate to one of those places, you have to face stiff competition, no matter how humble an immigrant you are, because they too save money, they too keep close ties with family and friends, and they too are willing to take whatever job is available.
    A society that turns people into reckless and selfish consumers is indirectly an endless creator of opportunities for immigrants. That, in a nutshell, is an underestimated magnet that has attracted and keeps attracting all sorts of immigrants from all sorts of countries to the USA.
    TM, ®, Copyright © 2013 Piero Scaruffi All rights reserved.
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  • (january 2013) The value of technology: The USA will not decline any time soon. In the age of self-defeatism it may sound strange to claim that the USA has never been so powerful, but critics forget that technology has always been a major driver of conquest and supremacy. There is little doubt that the USA still boasts the most advanced technology in the world. Therefore Nebraska's agriculture is booming. International agencies predict that oil production will soon surpass Saudi Arabia's. And there are so many startups and corporations working on non-fuel energy that sooner or later something will revolutionize the entire field. The San Francisco Bay Area went from being a refuge for crazy artists to being the greatest technological hub in the history of the world (still improperly nicknamed "Silicon Valley" even if silicon is no longer the main economic driver and the "valley" really extends throughout the whole bay). Progress in robotics and automation in general is rapidly reverting the relationship with countries like China: it may soon be cheaper to manufacture in the USA than in China, which means that millions of jobs may move back to the USA (and thousands of jobs may be added by the robotic industry). Militarily, no country is even close to the arms that the USA can deploy in a few days (and not even to the drones that the USA is already using routinely).
    When critics point at problems in the USA, they tend to point at problems that are not so crucial after all. Elementary and high-school education lags behind Scandinavia and Japan, but higher education is still the best in the world (Scandinavians and Japanese attend universities in the USA, not viceversa). Immigration policies are turning away and discouraging many of the best brains in the world, but the USA of 2013 does not need as many scientists and engineers as it did in 1913. Its Nobel Prize winners are now mostly US-born.
    The real problems might be about the technologies that the USA has been reluctant to adopt. The USA lags behind in fast trains (this is a country that imploded when all airports were shut down following the 2001 terrorist attacks) and in Internet speed (this is quite embarrassing for the country that invented it). Whenever you get back to the USA after a trip to Asia, you feel you just entered a developing country.
    However, the general outlook is optimistic: the academic and industrial research labs are producing an incredible amount of innovation compared with the rest of the world. The wave of offsourcing that started in the 1990s may be remembered as just a temporary expedient due to the fact that the industry of the USA is continuously looking for ways to produce more at lower costs and for a while (after the fall of communism) the way to produce more at lower costs was to exploit the industrial infrastructure and low labor costs of the former communist countries. Rather than inevitabile, the rapid progress in countries like China may have been a mere accident. It won't be easy for those countries to continue growing independently of the "offsourcing" business. They might soon realize that their luck was closely tied to the industrial cycles of the USA just like seasons are due to the motion of the Earth around the Sun and autumn harvest can't quite be engineered at will.
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