What Legal Rights are You Willing to Give Your Political Opponents?

In my American Thinker piece this week I raised the issue of Double Standards. Poor little diddums Hillary Clinton was given every allowance in an FBI investigation of her illegal email server. Donald Trump was hunted down by FISA Court warrants and a Special Prosecutor.

And you will search among liberal commentators a long while before you see a liberal that writes that this is a problem.

So this week, after the release of the IG report, there are a lot of conservatives writing that unless the government observes some sort of equality under the law, for liberal princess as well as for deplorable pauper, we are heading for the cliff. The Zman:

It does not matter what form of government is in place, the rulers, for example, have to maintain public order. Being the tribal chief is useless if your people and lands are in chaos. For that matter, having a tribal chief is useless if it means living in chaos. Therefore, one of the primary duties of all rulers in all times and all places is to maintain public order by enforcing laws and local customs.

Then there is Laura Hollis writing about "The Real Message Behind the Inspector General's Report."

The risk here is not that Americans will become disillusioned if some rogue FBI or DOJ or IRS agents are penalized for being bad actors or partisan frauds; the risk is that Americans will become disillusioned when they aren’t. Once a critical mass of people no longer believes in the basic integrity of the legal system, the doors are opened to widespread corruption. Power, not decency, becomes the objective.
When that happens, you’ve lost the rule of law. And when you’ve lost the rule of law, you’ve lost America.

 I don't think that our liberal friends have a clue about this right now. That's because they have all been taught that "activism" is the meaning of life, the universe and everything. They are utterly clueless that for millions of people the current political correctness reign of terror and virtue means that any careless word could lose them their job, or worse.

And do you know? People really care about that.

It's fine for liberals to string Trumpists up on the lanterns because the Trumpist microaggressed a woman or minority hardest hit -- and no safe space had been provided -- or a little child is in tears. But what happens if it's a liberal? What would liberals say if that DOJ employee and member of the Democratic Socialists of America that joined the mob harassing Homeland Security Secretary Kirstjen Nielson got fired? Hey! All she was doing was "peacefully protesting!" OK fine. So what do you call this political action? A mini-microaggression that doesn't rise to the level of genuine microaggression because the DOJ employee  in question is a woman? But wait! The target of the protest was a woman! What about her safe space?

I just think that liberals have no idea the deep waters they are getting into. And the solution is so simple. Merely read, learn, and inwardly digest the following maxim.

There is no such thing as justice. Only Injustice.

As I keep saying, we are in the middle of a rerun of the Sixties when lefties thought that they had died and gone to liberal heaven in the dawning of a new truly just world order.

Only the average working stiff in America hated it. Because the average working stiff just wanted a job, a car, a family, and a house.

And he and she still do.

Because, see above, the basic job of any ruler being to keep order. And that means a rough and ready policy to apply the law equally. Even equally-ish will usually do.

But our liberal friends believe in the saving grace of political power. Because if your objective is just then a few broken eggs don't amount to much in respect of the arc of history.

Nevertheless, liberals. Just what legal rights are you willing to concede to the evil racist sexist homophobe deplorables?

The world wants to know.

Dealing with Activism's Affect of the Week

So this week the "Affect of the Week" is the separation of migrant children from their parents at the Mexican border. And the mainstream media  unison chorus is all singing the same tune about the cruel Trump. Auschwitz! Nazis!

Will this be the issue that determines the midterms? Will it be a one-week wonder? Or is this just a cynical effort of the deep state to take the news off the IG report on the Clinton email "matter?"

I return as always to the century-old words of German sociologist Georg Simmel who observed that, with women coming into the public sphere, things were going to change.

Obviously, Simmel wrote, the public sphere, the world outside the home, in the short term would still be defined by men for men, but in the long term women would transform the public square to suit "a more feminine sensibility."

But what would that mean? I think it is pretty obvious. But let us get our facts straight.

First of all, the way the world works is by "affect." This, we might define as the eruption into "consciousness" of subconscious instincts. It is the way that mammals live, responding to danger and threat through the emotions of fear and anger. We notice that our domestic pets, particularly dogs, are clearly driven by this "affect." So it ain't just us humans.

However, humans also do a bang-up job of filling out our knowledge of the world with magnificent theories of everything. Right now we have fun theories about evolution and the Big Bang that take our rational knowledge and extend it "all the way down."

Just now I am reading a book The Elizabethan World Picture by E.M.W. Tillyard that I picked up at the HalfPrice Books warehouse sale. Yep, in that Elizabethan world there are nine spheres of heaven, populated by Forms, Seraphims, Angels, Archangels etc. And also, for balance, nine spheres of Hell, with Satan, Mammon and the like. But why not? The Elizabethans didn't have all our science to make sense of sun, moons, fixed stars and all. Newton hadn't shown up yet. To say nothing of Einstein and Heisenberg. So they made it up. Just like we make up the Big Bang by extending our theories to the limit and beyond. It's great fun on winter evenings.

Notice how the Elizabethans smuggled in Good and Evil into their picture of the world, what you might call, if you were the local deep-state Pooh Bah, merely "corroborative detail, intended to give artistic verisimilitude to an otherwise bald and unconvincing narrative." Without corroborative detail, what's the point of narrative?

Of course it is not just the priestly and philosophic class that spin pretty stories for our amusement with lots of "affect" thrown in for corroborative detail. Politicians and activists do it too.

Want to see a real master at that? Just watch President Trump's Down the Escalator speech of three years ago.

Want to know what the Parkland thing was all about? And now the Kids in Cages thing? It is liberal political activists ginning up events full of affect, complete with "orroborative detail, intended to give artistic verisimilitude to an otherwise bald and unconvincing narrative."

When you want to grab men by the guts you need to stage an event showing existential danger that will prompt them to rush to get their weapons (or their boats in the case of the Cajun Navy).

But when you want to grab women by the guts you stage a show with crying children. It triggers the fundamental instinct of women, which is to keep their kids alive and care for them.

This is why I profoundly disagree with all conservatives and deplorables that write about how "we" are rational and "they" are emotional.

OK, we all have rational knowledge, science, systems of ethics, etc. But when we live moment to moment we are flying along as unconcerned as a seagull until something brings us up short and triggers an "affective" response.

What do you think President Trump is doing when he ventures forth on Twitter? He is trying to tug the affect of his deplorable supporters in the ordinary middle class. But Democrats are playing a different game. They are appealing to the women and minorities hardest hit, of which we've heard tell.

When you hear your liberal woman friend saying that she had always wanted to "get into activism" you are touching the edge of the culture that produces the Kids in Cages affective moments. These nice young urban hipsters know that you don't win in politics by a rational discussion of the issues. You win by winning the game of affect, and that game requires a narrative with heart-tugging affect.

Conservatives and Republicans, up to now, were not very good at this. Because we think of politics as a necessary evil. Here is a chap attacking Jordan Peterson for saying that "thinking is overrated." Says Peterson:

When existence reveals itself as existentially intolerable, thinking collapses in on itself…it’s noticing, not thinking, that does the trick.

And that, says the critic, is all wrong.

But Peterson is right. It is indeed noticing that rules the world. You are on a walk in the woods and you want your wife to see a bird sitting in a tree. She won't see anything until the bird moves. It is the bird's movement that allows her to notice it. That is how the world works. Nothing exists for us until it moves. Then we notice it, and then our affect chimes in to prompt us to react to it.

Nobody paid a blind bit of attention to Kids in Cages until the activists brought it up on the TV news. Then everyone "noticed."

Of course, the question for us deplorables is whether the politics of "Affect of the Week" is a winning strategy. Parkland last month, Kids in Cages this week. Something Else next month. And the purpose is the same as the car crashes and disasters shown every night on local news. To get the eyeballs of women.

It seems to me that the name of the game is to get our theory of everything to be the normal World Picture for people in our society, including, especially, women. Then the affective response to the Affect of the Week will be more in tune with what we believe than the current situation where every child is taught liberal the World Picture in government child-custodial facilities from K thru graduate school.

It is important to get into the minds of women, partly because of Georg Simmel above, and partly because there are more Good Little Girls in the world than Good Little Boys. Which is to say that women are more easily manipulated by the culture than men: sugar and spice rather than snips and snails and puppy-dog tails.

But you can see that the only way we get our theory of everything a chance is to nuke the current school system, K thru graduate school. And that is a tall order.

Hey, I know. Let's publicize the notion, with sobbing girls every week on TV, that no kid is safe in a government school. Because bullying.

The Wages of Politics

I like to characterize politics as the art of division. That's a bit naughty of me, because when you turn to the philosophers they say that politics is either noble or necessary. For instance, Aristotle, according to La Wik, believed that, over the family and the village,

The highest form of community is the polis. Aristotle comes to this conclusion because he believes the public life is far more virtuous than the private and because men are "political animals."

And then there is Plato with his Republic, proposing a Callipolis, the state ruled by the philosophers who educate their subjects into the right channels.

But I would say that these guys are missing the point. The need for politics arises instead after the local lord has become the war lord and successfully beaten off the invaders.

Put it this way. The warrior lord has rallied all the local warriors to his standard, has cooled their competitive ardor for a season, and has led them to victory over the deadly enemy. Now what?

The point is that after the war the tribe/polis/nation or whatever does not now need the super-unifying leadership required to win the war. On the other hand there is the danger that all the lordly warriors that rallied to the standard may now have ambitions of their own -- see Shakespeare's Wars of the Roses plays.

And politics now becomes a division no longer between us, the local tribe, and the foreign enemy, but now because a game of division between all the heads of power within the tribe/polis/nation. That is really what Aristotle's Politics and Plato's Republic are all about: trying to civilize these rough types and teach them virtue.

And Aristotle and Plato had the notion of designing a system to encourage virtue or educate ordinary people to become good citizens.

Then we come down to the early modern era of Hobbs, Locke, Montesquieu where the separation of powers notion is developed. Here we acknowledge that humans are bad, and need to be diverted into safe channels in their quarrels so that the pride and rage of ambitious men does not erupt into civil war.

In other words, for the early moderns, political institutions were intended to keep politics down to a low roar rather than a volcanic eruption.

Then we have the left, where politics becomes a saving faith. We see that in the French Revolution which turned Notre Dame into a Temple of Reason. And we see it in Marx where revolution is to defeat the rising bourgeoisie with the proletariat before it is too late. And good little girls today in the university are being taught that the highest form of life is to become an "activist."

In other words, for today's left, politics is civil war by other means.

But look up to the top of this piece where I said that politics arises after the warrior lord has won the victory against the barbarians at the gate. What do we humans do when the moment for absolute unity has passed?

Notice that in the United States it has been routine for the general of the armed forces in the late war to become president: Washington, Grant, Eisenhower.

May I say that it is another proof of God's existence that we had as president such good men that they did not use their war-hero status to create cults of personality and subject the US to their will, but instead ruled as benevolent monarchs for a season and then left office. Why did we deserve such noble creatures as our presidents?

And both Grant and Eisenhower came from humble beginnings. Grant's father was a tanner, and Eisenhower's father worked in a creamery. No aristocratic virtue and noblesse oblige there.

Now, it seems to me that politics arises after satisfying the need to have a strong military to defend the patch of land against the neighboring tribe, or the barbarians, or the neighbor nation state. Because everything came down to defending our food-growing land. What to do between wars of defense against the raiders? Enter politics.

On this view ancient politics is based on the need to preserve unity for the next war. The need is to keep ambitious men from wrecking the commonwealth with their destructive competition so that the nation can come together the next time it is threatened.

Notice how leftist politics turns this on its head. The problem of invasion is assumed away, because we are all members of the human race, and war never solved anything. Strictly speaking, this means no need for politics. No war, no military, no warrior chief, no warrior class, no need to keep the warriors from each others' throats in the peace. Instead leftist politics becomes a civil war within the political boundaries of the state between class, race, or gender rivals. And, in particular it becomes a war for justice for people unjustly kept outside the gate of the political community.

My point is that if you assume away the original need for the larger community and the need for unity against external threats, then the next thing is you start settling scores within the community. You can afford to do that because war never solved anything, therefore no war.

But here is what I consider the astonishing fact of the modern era. The new middle class, that Marx assumed would be bidding to take its place atop the heap as the feudal lords did in olden times, was not that interested in power.

Thus "activism" politics. The commercial middle class is not that interested in power, so if the activists present some helpless victims for inspection by the media, the middle class will probably act to redress their grievances.

But if this is true, then we really don't need activism politics. All grievances will eventually get reviewed and addressed. Because the middle class is basically good-natured. Because the bourgeoisie is not that interested in power.

This is not because the middle class is unusually virtuous, but because the nature of the modern market economy is that you trust anyone that presents themselves as trustable. Life is no longer a question of defending your patch of food-growing land from the neighbor. Now everyone is producing and trading and consuming. And the more people contributing to the market economy, in whatever way they can imagine, the better.

And what, in retrospect, is the point of winning a world war? After World War I the western allies were determined to teach Germany a lesson, and the result was Hitler and World War II. After World War II, it took a couple years for the western winners to decide that a Germany reduced to indigence did nobody any good, because it cost the allies a bundle to feed the Germans. So the Germans were allowed to rebuild their economy from the rubble, and their Wirtschaftwunder commenced.

This is astonishing. It means the complete annihilation of the old culture of loot and plunder: loot or be looted. Instead of your patch of land being the foundation of your wealth, and your neighbor a challenge to your well-being, it is the more the merrier.

It is my belief that this new economic reality is the most astonishing thing in the entire history of mankind, and we have not even begun to consider that the world has utterly changed, and what to do about it.

And the political question is at the heart of it. For if politics is not needed any longer to keep the elite barons from each others' throats during the peace, and there is no need for an activism politics to force justice upon a greedy and bigoted bourgeoisie, then what price politics?

Stay tuned, because we haven't even begun to deal with this astonishing new age and its consequences.

The Wages of Women in Leadership

I am coming to the conclusion that there is a certain kind of human that does not belong in a hierarchical administrative system, and certainly not at the top.

I am talking about woman.

Yes, yes, women can do everything that men can do. Not. But this last weekend there has been a cascade of news about women in hierarchies that don't have a clue.

Yes. I know that men are mostly clueless, but the difference is that nobody is making excuses for them, not at least if they are white males. So we are supposed to believe that dear little Hillary didn't understand the mansplaining meaning of a (C) in a government document. But Trump is supposed to know exactly what all his minions are doing, otherwise it's Russian collusion all the way down.

So here are a few examples of female cluelessness. From Powerline, a hospital director at Harvard Medical School is worried about stuff that "might upset women and minorities who are training to become doctors." So,

Dr. Nabel has removed 31 portraits of former department chairmen from the hospital’s Bornstein amphitheater because they are all men and all but one of them are white.

Ya know, I would say that in a major teaching hospital there are 20,000 problems in need of executive action before the vital and important job of moving the pictures around. So this is what female leadership reduces to? Redecorating? Indeed, the dissent of an Iran-born doctor suggests that Dr. Nabel and her "posse" seem suspiciously like your average Mean Girls clique in high school.

Then there is the woman President Deborah MacLatchy of Canada's Wilfred Laurier University. Her faculty sanctioned Lindsay Shepherd, a graduate student and teaching assistant, who showed a video of Jordan Peterson in debate with a liberal about gender pronouns. Not for expressing a heretical opinion: just for showing the video. In her suit against the university Shepherd cites chapter and verse of how the faculty harassing her for the thought crime of actually showing a video were violating all the university's bureaucratic rules against harassment, but nothing was done. Does this woman president -- that was finally shamed into disapproving of the harassing actions of her underlings but has since done nothing to fix the problem -- not understand that one of the jobs of any executive leader is to lay down the law to her subordinates pour encourager les autres?

But here's the loveliest one of all. Remember that collision between a US Navy destroyer and a container ship in June 2017? Guess what: the "officer of the deck" (OOD) and the "Tactical Action Officer" in charge of "monitoring the combat radar" were both women.

The OOD was named Sarah, and the Tactical Action Officer was named Natalie, and they weren’t speaking to each other!!!

OMG! Like, I Can't Believe They Would Do That!

And they didn't communicate at all on the watch leading up to the collision with the Philippine container ship.

Of course this all precipitates out of the basic difference between men and women. Men are organized to fight for the survival of the tribe on the border. Women are designed to fight for the survival of their children until puberty.

That means that the male strategic mind is thinking about what vital fact about the war plans of the neighboring tribe am I not paying attention to? And the female strategic mind is thinking about what food or dangerous shrub might be threatening the life of my child.

That is why when you walk around Green Lake in North Seattle you hear the men talking about tactical issues at work and the women talking about the health care issues of their friends.

Men naturally self-organize into quasi-military hierarchies, because that is the way not to get killed in the next dawn raid. Women naturally organize into gossip networks because village harmony depends on a consensus of who said/did what to whom and who is to blame.

Again, from James Bowman's Honor: A History, there is a fundamental difference between male honor and female honor: two separate cultures. Male honor is about guarding the reputation for courage; female honor is about guarding the reputation for chastity. Notice the profound difference. For men, it does not matter whether you are right or wrong, but whether you stood in line with your brother soldiers. For women it does not matter whether you stand together, but that you were "right" or "innocent." Thus the universal female complaint: "I can't believe she said/did that."

Now, in my view, taken from Rodney Stark, the original human "informal social control" is epitomized by the female village gossip network. But that didn't work when humans moved from villages to cities and the first stirrings  of the market economy where anonymity started to rear its ugly head. So "formal social control" is all about hierarchical armies and state bureaucracies based in cities. And trials with formal rules about evidence/gossip. Oh and church bureaucracies.--

I wonder if women are really cut out for formal social control. Unless you are Margaret Thatcher with the will to completely reinvent yourself as an Iron Lady.

By the way, the whole culture of microaggessions and safe spaces is a girl thing. The whole point of being a man is to be impervious to minor insults, and not to need a place to hide. Because male honor and the reputation for courage among your male warrior pals. I mean: what kind of a man can't take a insult without collapsing into tears? And what kind of a man needs to hide away from his enemies unless on a modern lethal battlefield?

But I am optimistic. My whole existential worry about the world is that it is impossible to reform any government program, so nothing changes until the whole thing collapses from failing to adapt to changing circumstances.

But with women getting to be top managers of big bureaucratic organizations from schools to hospitals to universities we can expect an increased failure to adapt, because of an inborn inability in women to succeed in a "formal social control" environment. This means that our current bureaucratic monstrosities in health care and education are heading for the cliff earlier than we would expect if ordinary dull men were in charge.

Put it this way. Charles Dickens represents your average male bureaucrat as a "Barnacle" or a "Stiltstocking." Clearly such names just do not connect with women. But what names would be appropriate?

That is the question for today. And I have to admit that I don't have a clue.

So. The FBI is Just Another Dysfunctional Bureaucracy

I have to admit that when I read Charles Dickens' account of the government's Circumlocution Office in Little Dorrit I understood completely that many of the employees at that excellent government office would be Barnacles. Of course. The average bureaucrat will hang on like living death to his job and his pension. But I was not so sure about the other race of bureaucrats circumlocuting themselves about their bureaucratic offices: the Stiltstockings. What exactly did Dickens mean by that?

Today, thanks to the FBI and the Inspector General report on the FBI's handling of the Clinton Email Matter, I now understand. A Stiltstocking is the kind of person that would text the following.

Just went to a southern Virginia Walmart. I could SMELL the Trump support . . . 

The Stiltstockings are utterly unremarkable bureaucratic worms that think they are a cut above.  But they are not. They are Barnacles with attitude, bumbling idiots doing nothing in particular except sending each other memos and texts while banking their government checks every month.

And they are living proof of the law of bureaucracy, which progressively does less and less as the years pass until it is just working to ensure its survival and continuance. As Kimberly Strassel writes of the FBI:

A neutral arbiter has found they made a hash of the Clinton investigation, and it is reasonable to assume that those same players made a hash of the Trump probe.

 Of course the FBIers made a hash of things. That is what long-established bureaucracies do. They stumble and bumble around pretending to do serious work. But serious work means taking serious action, and serious action is dangerous: someone powerful might take exception to a serious action, and then what would happen to the Barnacle's job and pension?

Actually, you can't really fault the FBI Barnacles and Stiltstockings too much. What do you expect, given the clear message from the top during the Obama administration that the fix was in? On everything.

If Hillary Clinton had half a brain she would never have set up a private email server. Because suppose the Russkies found out about it; suppose its existence became public, etc.? What is the point of being Secretary of State if the Russkies are reading your emails before you do. If President Obama had half a brain he would have insisted: No Private Email Server in my administration, not no how. If Hillary Clinton had an ounce of honor she would have backed out of the presidential race when her private email server became public knowledge in 2015, because she would have understood what a huge liability such a scandal would be going into the election. Then she wouldn't have needed a weenie like James Comey to kick dust all over the FBI's pro-forma investigation of her private email server and "exonerate" her. Then the angry rank-and-file FBI agents wouldn't have stampeded James Comey into reopening the private email investigation just days before the election.

Sen. Chuck Schumer (D-NY) is right. Did the FBI investigate Clinton's private email server? "Of course not." So therefore:

At the end of the day, the actions reviewed in this report helped Donald Trump win the election, not the other way around.

Right Chuck. So the right thing for Democrats to do would have been to insist that the Obama administration and Hillary Clinton follow the law and not try to stonewall and make excuses for an act -- transmitting classified material over an unsecured email system -- that would have put anyone else in jail.

It's like the House Bank Scandal of 1992. Your average smelly Walmart shopper may not understand high politics, but they do understand about Congresscritters bouncing checks without penalty.

Only you chaps aren't that smart, and aren't that honest, and generally you chaps can get away with it, because mainstream media.

Yeah. Mainstream media. You guys would be doing your side a real favor if you insisted on your side playing by the rules, and shaming it when it doesn't. If you had then your chap would likely be in the White House today instead of Donald Trump.

As usual, Shakespeare Scott has the last word:

Oh what a tangled web we weave when first we practise to deceive.

But look on the bright side. The intelligence community tried to wrong-foot Candidate Trump by colluding with the Clinton campaign to convert ordinary oppo. research into a government intelligence product and failed. The FBI tried to whitewash Hillary Clinton on the private email server and failed. Probably the Mueller investigation is going to fail as well.

Thank goodness all these Barnacles and Stiltstockings at the Circumlocution Office are all idiots. Otherwise this country would be in a world of hurt.

So back to the real question. Is Trump an idiot?

Probably, the answer is Yes. But not as much of an idiot as his political opponents and their bribed apologists in the Circumlocution Office and the media.

About That Inscrutable Chinese World Domination

Everybody is worried that the Chinese are going to take over the world. They are beating us hollow by making cheap knockoffs to sell in WalMart and they are stealing all our IP (intellectual property).

All true. And, of course they are also building a global transportation network in their Belt and Road initiative, and they are meddling in Africa.

In other words, China is copying the United States, the current global hegemon. Back in the day, the US had a high tariff policy to encourage local industry against those perfidious Brits. And the Brits, at least around 1800, had all kinds of laws to prevent textile industry technology, which they realized was the basis of their world power, from heading across the Channel or across the Atlantic.

And they may be right. Maybe the future is in a replication of the US ascendancy; maybe the future is in selling cheap manufactures to the US; maybe the future is in the exploitation of current intellectual inventions; maybe the future is in a transportation and trading network organized on the old tributary system of imperial China.

But I start from the position that people in politics are all idiots. I mean: what kind of idiots would have a war in Europe, twice in a century, that killed off the flower of its youth, not to mention liquidate the kulaks, the best farmers in Russia, and decimate the Jews, the smartest kids on the block? What kind of idiots would inflate their currencies so that today's dollars and pounds and whatnot are worth about 5% of their value in 1900? What kind of idiots would mew up 30-40 percent of national income in unaffordable middle-class entitlements?

My point is this. The story of the Miracle of the last 300 years, or if you prefer the Great Enrichment of the last 200 years, is that nobody saw it coming. The key to understanding it, in my view, is successive waves of innovation by nobodies that the political elite was too stupid, or too late, to kill in their cradles: textiles, railways, electricity, oil, personal transportation, better living through quantum mechanics, IT.

Now. Do you think that a bunch of Chinese politicians and their hangers-on and their tame scientists have a clue what is coming down the pike, what staggering innovations are about to spring on us? If you do, I've got a bridge to sell you.

Look. I've been a computer guy all my working life. But do you think that I had a clue that today I would have a smartphone sitting beside me here that cost $129 with 16 Gb of memory, with an amazing camera, with all my music on a 64 gig micro card? When I was programming with punch-cards on a 16k IBM-1130 computer I assure you that I had no idea, no idea at all, what was coming.

By the way, do you know what the difference between 16 Gb and 16 Kb is? It is 9 orders of magnitude. In other words, my personal $129 smartphone has not 10 times or 100 times but 1,000,000,000 times more memory that the office $30,000 minicomputer of 1970.

My whole view is that we have entered an era, as Nietzsche says, of the transvaluation of all values. The old tribal culture of defending your patch of food-growing land is over. Because food-growing land doesn't matter any more. What matters are the crazy ideas in the heads of crazy kids and entrepreneurs.

Notice that China is still going down the old path, thinking that the key to the future is to control your trading network, control your people with a political hegemony, to take advantage of your trading partners, to steal other peoples' ideas.

Maybe they are right. But I doubt it.

Bond Bears Start to Worry

A couple of days ago the Wall Street Journal started to worry about the "inverted" yield curve. Go take a look.

What they are saying is that the recent interest rate increases have brought the 2-year Treasuries close to the 10-year Treasuries. Oh no!

So what is the current Treasury yield curve? I am glad you asked, because I am setting it up on my usgovernmentspending.com site.



This is called a "normal" yield curve. As you can see, the interest rate on a 1M -- or one month -- Treasury bill is less than, e.g., a 1Y -- or one year -- Treasury bill. In fact every longer maturity Treasury security has an interest rate higher than all the securities with a shorter maturity.

So everything looks fine. In that case what are the WSJ boys whining about? They are whining about this, the yield curve from late in 2006, at the very end of the 2000s expansion before the Great Crash of 2008.



That, my friends, is what an"inverted" yield curve looks like. In this case the short-term Treasury securities are yielding over 5 percent and the medium and long-term securities are yielding about 4.6 percent.

Why is this a problem? It is a problem because the business that almost all financial institutions are playing, banks especially, is to borrow short (i.e. checking accounts where depositors can remove money immediately) and to lend long (i.e., everything from car loans business loans to home mortgage loans).

When banks are borrowing at 5 percent and lending at 4.5 percent, then they are losing money. The result is a financial crisis.

Obviously we are not there yet, and the yield curve is still normal. But. The Federal Reserve is expected to be raising interest rates three or four times this year. That would bring short term rates from 2 percent to 3 percent. No doubt long-term rates would increase too.

The question is, how many interest rate hikes would it take before the short-term rates start to get bigger than the long-term rates.

That is the question.

But what do you care, if you have a mortgage already? You care because if you have to sell your home, the guy buying it will have to pay a much higher interest rate on his mortgage. And that will tend to lower the price that he can bid for your house.

For those of you with a yen for history, the current situation is similar to the late 1920s. President Coolidge, in association with his Treasury Secretary Andrew Mellon, lowered income tax rates again and again. It set off an amazing boom. In due course, of course, the Fed raised interest rates, and at some point, the stock market started retreating. Then the market crashed. And the political hacks at the Federal Reserve hesitated to act as lender of last resort when banks started failing.

Fast forward to 2008. In September 2008 Gentle Ben Bernanke hesitated to bail out Lehman Brothers. Then the Dow Jones Industrials started losing 500 points per day, every day.

I  wonder if current Fed Chairman Jerome Powell has the necessary cojones.

Just saying.