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Spengler

Monthly Archives: October 2012

Mitt Romney had to say it: “Let me step back and talk about what I think our mission has to be in the Middle East and even more broadly, because our purpose is to make sure the world is more — is peaceful. We want a peaceful planet. We want people to be able to enjoy their lives and know they’re going to have a bright and prosperous future, not be at war. That’s our purpose.” Wanting is not getting, though. America also has to be prepared to maneuver in a world in which stability cannot be achieved by any means or at any price.

Last month I warned that Egypt may be ungovernable. One of the pillars of American policy in the region is crumbling beneath us. A second pillar, namely Turkey, is showing cracks. Both the Bush and Obama administrations have groomed Turkey as a key American ally. Turkey can’t be compared to Egypt, to be sure. It is in no danger of near-term instability. But the Syrian crisis points up Turkey’s long-term weakness and its likely inability to fulfill the role that American policy has projected for it.

In a new report for the Jewish Institute for National Security Affairs, where I am a Visiting Fellow, I argue that Turkey’s foreign policy meltdown stems in large part from the country’s Achilles Heel: the rapid growth of its restive Kurdish population. An excerpt:

Syria’s two million Kurds have become a wild card in the country’s crisis, after the Assad regime encouraged Kurdish autonomy as a ploy against its Sunni opposition in the ongoing civil war. The importance of the small Syrian Kurdish zone extends far beyond its possible role as a base for PKK guerillas to attack Turkish security forces. The new self-assertion of Syria’s Kurdish minority forces a long-term problem onto the short-term regional agenda: the inexorable shift of the population balance in Anatolia towards the fast-growing Kurdish population at the expense of Turkish-speakers, whose fertility has fallen to Western European levels.

Turkey’s demographic time bomb has gone largely uncommented in the Western press, but it has the undivided attention of the Turkish media. The thesis that the Kurdish question may not be soluble within Anatolia over the medium term has gained wide credence among Turkish analysts. It helps to explain why Turkey appears paralyzed in the face of the Syrian conflict.

………

Prime Minister Erdoğan has made the revival of Turkey’s flagging birth rate a major political issue. Zaman reported during last year’s election campaign that he

… lashed out at his chief rival party for promoting birth control for years, reiterating his call for at least three children. Erdoğan, who has long claimed that for a healthy and vibrant society people must have at least three children, said the Western societies are now collapsing because of aging and urged his supporters in a campaign rally in Ankara on Monday not to ‘trap into this game.’ They [the opposition CHP] have inspired this nation with birth control for having aging population on the world stage,” Erdoğan told at the rally, adding that if population continues to increase at this level, Turkey will be among aging nations by 2038.

Erdoğan is focused on a critical weakness that Western analysts for the most part have overlooked. Within one generation, at current rates, half of Turkey’s military-age population will be born in households where Kurdish is the first language. The Turkish government’s hope of integrating the Kurds under the broader Islamic tent have failed, and the new ambitions of Syria’s Kurds expose the underlying weakness of Turkey’s strategic position and the likely effectiveness of its diplomacy.

It also calls into question the presumption that Turkey is America’s critical ally in the region. If Turkey is likely to be the loser on demographic grounds, American planners need to consider alternatives to reliance on Ankara for regional policy. If a Kurdish state is inevitable for demographic and other reasons, America may do best to place an early bet on the winner.

Read the whole report here.

It’s the Obonomy, Stupid!

October 25th, 2012 - 11:34 am

“Business investment in the US has ground to a halt” is the lead story on MarketWatch this morning. The site reports, “For the first quarter since late 2009, shipments of U.S.-made capital investment goods declined, falling at a 4.9% annual rate, according to Census Bureau data released on Thursday.”

There’s an investors’ strike underway of proportions we have never seen before. Corporations are hoarding $2 trillion worth of cash. Private equity funds have $1 trillion of unused commitments. Pension funds and life insurance companies are gasping for returns. Yet Americans refuse to take risk on other Americans. Households, corporations, and institutional investors would rather keep money under the figurative mattress in ultra-safe investments than invest in future productivity.

This isn’t like the Great Depression. During the Great Depression, to be sure, investment collapsed, but no-one had money to invest. Now everyone has money to invest (and the Federal Reserve keeps shoving new money into the system by purchasing securities from the open market), yet no-one wants to invest.

There’s no textbook description for this condition, so we’ll give it a name: the Obonomy. The anti-business toxicity in Washington is so intense that that no-one will take risks.

The investors’ strike is especially onerous given that the average profit margin for the nearly 4,000 exchange-traded public companies for whom data are available was over 18% during the second quarter of 2012. Why wouldn’t investors put more money into businesses earning 18% year, rather than buy safe securities yielding the rate of inflation or less? The answer is that they are terrified of the anti-business environment. If Obama is re-elected, business will hit a wall of tax increases and face a regulatory reign of terror.

The great American profit machine has stalled. If Obama is re-elected, we are all going to be poorer.

Paul Ryan did a fine job last night, and the CNN and other polls show a clear victory over a near-hysterical Joe Biden. Normally I stay at barge-pole length from the diabolical art of political rhetoric. But I couldn’t help wishing that Ryan had closed his argument like this:

Since you bring it up, Mr. Vice President, the 30% I’m talking about is the proportion of Americans getting food stamps and other means-tested help from the federal government. It was just 20% when you took office. They’re getting food stamps and other help instead of earning a paycheck, because your administration failed to create the jobs you promised. They don’t want the food stamps. They want to work. To say that Mitt Romney and I blame these struggling Americans is false, and you should be ashamed of yourself for insinuating that. It sounds to me like you’re saying, “We all know that our administration failed to create jobs, but you can trust us to keep the food stamps coming.” I thank God America is rich enough to make sure that no American need go hungry, and I don’t begrudge help to anyone. But is this the best you can offer the American people? Your campaign slogan comes down to, “Trust me.” Why don’t you put it on a bumper sticker?

What Biden did last night was downright wicked. He said of the American people:

…all they’re looking for is an even shot. When they’ve been given the shot, they’ve done it. They’ve done it. Whenever you level the playing field, they’ve been able to move.

…they want a little bit of peace of mind. And the president and I are not going to rest until that playing field is leveled, they in fact have a clear shot and they have peace of mind, until they can turn to their kid and say with a degree of confidence, honey, it’s going to be OK. It’s going to be OK. That’s what this is all about.

That’s a shameless appeal to resentment and fear, and the best way to take it on is to call it what it is.

Be afraid. Be very afraid. The America of 2012 is not the America of 2008. If Barack Obama wins this election, the America of 2016 will resemble the beaten and bankrupt countries of Western Europe more than it will the America we grew up in. This isn’t Chicken Little speaking. Take a hard look at the trends, and then drop everything else you had in mind for the next four weeks, and make sure everyone you know votes for Romney-Ryan. We have one last chance to save the republic.

1) Dependency on government handouts: As Dick Morris points out in his latest book Here Come the Black Helicopters!, 20% of Americans received some kind of means-tested government check in 2008, when George W. Bush left office. Now 32% of Americans get some kind of means-tested support — food stamps, disability, welfare, and so forth. That’s a third of the country. Transfer payments are now fully one-fifth of personal income, as I observed in an essay last year. Obama’s arbitrary and perhaps illegal changes in welfare work requirements create a cycle of dependency, as the Romney campaign has warned. They also create a built-in majority for the welfare state. Morris observes that the shift to dependency gives the Democrats a majority on paper. The only question now is turnout. Give this another four years, and the number of Americans who have a stake in economic growth will be a minority of the population.

2) Religious commitment: The Pew Institute’s bombshell survey released this week showed that the number of Americans not affiliated with any religion rose from 15% in 2007 to almost 20% in 2011, and that the unaffiliated are much likelier to vote Democratic (63% of unaffiliated lean Democratic vs. 48% of all registered voters).

This prompted rejoicing in the liberal camp. Writing in the London Guardian, Sarah Posner argued that

…the data shows [conservative Christians] are clearly losing the public. Another survey last week from the Public Religion Research Institute showed that while Mitt Romney has the support of 80% of younger white evangelical millennials (aged 18 to 25), this is a small and diminishing constituency: white evangelicals comprise only 12.3% of that age group. That’s less than half their proportion of the 50 to 64 population. The Pew survey showed that while 32% of Americans aged 50 to 64 are white evangelicals, only 13% of those aged 18 to 29 are.

3) European-style birth rates: “The overall fertility rate for women in the U.S. — defined as the number of newborns per 1,000 women aged 15 to 44 — was 63.2 last year, down from 64.1 in 2010 and the lowest rate since the government started collecting these statistics in 1920,” the Wall Street Journal reported on Oct. 3. Most ominous was the crash in Hispanic fertility: “Hispanic women between 20 and 24 saw their fertility rate drop to 115 last year from 165 in 2007.” Religious commitment and child-bearing are closely linked, as a number of analysts have pointed out (I review the relationship in my book How Civilizations Die).  So the fertility decline is part of the same story as the decline in religious affiliation. It suggests that while Protestant numbers show the steepest decline in affiliation, Hispanic Catholics are behaving less and less like Catholics used to.

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I’m taping the show today to be aired on Monday (which is a Jewish holiday, when neither Mr. Medved nor I will work).

The Character Test in the 2012 Election

October 4th, 2012 - 5:40 am

The Romney the world saw at last night’s debate — confident, enthusiastic about his ideas, hopeful and articulate — is no stranger to those fortunate enough to have heard him speak in person during the past year. I reported in this space on a primary campaign breakfast in November 2011 where Romney won me over. What changed last night emphatically was not Mitt Romney. What changed is that we finally got to see the real Mitt Romney. The Republican candidate, that is, defined himself against Barack Obama, rather than allowing an overwhelmingly hostile media to define him. And Barack Obama, alone on the stage with his opponent, stripped of teleprompter and fawning media, revealed himself to be a fearful, petulant, petty man. Not only did Romney win; Obama lost.

There has never been a presidential candidates’ debate on national television where the instant polls declared such a lopsided victory (3 to 1 in Romney’s favor according to CNN) — not Kennedy-Nixon, nor Reagan-Carter. Response to televised debates in the past split neatly down partisan lines, so much so that conventional wisdom states that presidential debates simply weren’t a factor in the election. The voters watched the debate and assigned a better performance to the candidate they liked beforehand. Al Gore’s sighs or Richard Nixon’s sweats influenced the electoral outcome in legend more than in fact.

Just because debates weren’t decisive in the past doesn’t mean that this one won’t be decisive now. The most lopsided factor in this election is the character of the candidates. What we saw last night is a unique and unprecedented event in American political history. We have never had a president like Barack Obama, and the American public got its first peek at the man behind the curtain.

Barack Obama is a narcissist and a sociopath, with the skills of persuasion that children abandoned by their parents learn as a survival mechanism. In the adoring light of the liberal media, Obama reflected power and self-confidence — so long as he was in control, and stood in front of the teleprompter. The real Barack Obama is the one who cowered in the Oval Office protected by his Praetorian guard, who declined to hold cabinet meetings or meet with Republican leaders: McBama surrounded by the weird sisters, Valerie Jarrett, Susan Rice and Michelle. Obama’s greatest strength always has been his greatest weakness, potentially a catastrophic one: he manipulates so effectively because he has a compulsion to be in control. When he knows that he is not in control, Obama is paralyzed. Absent last night were the easy rhetorical flourishes and rock star pose of 2008.

When he is not in control, as in last night’s debate, he freezes. Obama’s stumbling delivery and poor body language betrayed a frightened and enraged man who desperately wanted to be somewhere else than on a public stage, mano a mano with Mitt Romney. The most pertinent question to ask the Obama campaign now is which psychiatrist they have put on retainer.

Egypt Meltdown Update

October 2nd, 2012 - 6:18 pm

Egypt’s economy appears to be running on fumes. Public health clinics are out of vaccines for infants, importers are running out of stockpiles of basic food items, and the government is $3 billion in the hole to oil suppliers in the midst of a paralyzing fuel shortage. And it doesn’t look like anyone is riding to the rescue of Muslim Brotherhood president Mohamed Morsi. The latest news is that negotiations over an IMF loan have been “delayed,” yet again. That’s good news, because the U.S. would be on the hook for a big part of that loan. The Republicans in the House of Representatives have shown some spine in refusing White House requests for emergency cash for Egypt, and should be encouraged.

With cash on hand down to about $6 billion, or less than two months’ imports, Egypt’s central bank won’t give scarce dollars to food importers. Egypt is short $1 billion a month (by its own estimate) or $2 billion a month (by some private estimates).

I reported in Asia Times Sept. 29:

According to the country’s importers association, the reluctance of banks to provide trade financing to Egyptian firms has cut imports in half since the January 2011 revolution, and now threatens essential food supplies. The government claims to have six months’ of wheat stockpiled and recently bought additional supplies, but other staples, including beans, sugar and cooking oil. Ahmed Shiha, the head of the Cairo Chamber Commerce importers’ group, warned earlier this month that Egypt has been living off inventories of key food commodities, according to the Egyptian news site el-balad.com.  After the 2011 revolution, importers stocked up on food out of fear of devaluation. Now they are having trouble obtaining letters of credit to replace their diminishing supplies. Especially vulnerable is Egypt’s provision of beans, the biggest staple after bread. High dollar prices and dwindling cash reverses could lead to a 40% reduction in the supply of imported foods, Shiha warned. Egypt imports half its total food consumption.

A $4.8 billion International Monetary Fund loan was supposed to provide the foundation for international support for the near-bankrupt Egyptian economy, but that won’t happen any time soon. Business Monitor International reported today:

Negotiations between Egypt and the IMF for a US$4.8bn loan have been delayed to give the government more time to formulate its economic reform programme. A team from the IMF was originally scheduled to arrive in Egypt at end-September to discuss the terms of the loan. The country is in immediate need of funds to support state coffers hit by the economic turmoil since the 2011 uprising that toppled former president Hosni Mubarak. The government aims to complete the economic programme before the loan talks so as to show that it is serious, reports Al-Borsa, citing Egyptian Finance Minister Mumtaz al-Said.

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