Category Archives: Current Events

“Victors’ Justice”; But Was It?

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Today we celebrate – yes, “celebrate” is preciselythe word I want – the hanging of ten as wicked men as humanity has cast up on the shore in the past several hundred years.

They’d been riding high, these lawyers, engineers, architects, doctors of philosophy, journalists, when they had the lives of millions in their filthy hands. They’d erected elaborate administrative structures where memoranda silently wafted through the chancelleries, drifted across desks, being initialed, stamped, counter-signed, and on and on, before a background of towers of smoke belching from the ovens, day in and day out. And through it all the relentless clanking of cattle wagons coupling in the switching yard, the rhythmic beat of steel wheels over rails of even length, each clack! bearing the human cargo within that many meters closer to a yard where those marked for immediate death were sent to one side – the vast majority of them – and those to be preserved for a lingering, gnawing, terrified, starving, vermin-infested, beaten-bloody deathly labor were sent to the other.

These men and their underlings occupied blocks on hell’s own organizational chart, blocks labeled things like “Referat VIIa – Ausland” and similarly bland titles. What they did was set out to slaughter an entire people, to enslave an entire ethnic group, to purge by starvation vast territories that they might be settled by Volksgenossen – racial comrades. 

We caught them, we and our allies did. The big fish, the guys who did shit like decree that a conference would be held at some forgettable suburb called Wannsee to discuss the Endlösung der Judenfrage in Europa, the final solution to the Jewish question in Europe, we carted them to a place called Nuremberg, convened a body called the International Military Tribunal (to all the hyperventilators about Guantanamo Bay and the trials there: yes, Nuremberg was not a civilian tribunal). And we made them answer for what they’d done. At least we made some of them answer, to some extent; some got off with a fraction of what they’d deserved. Some of the most culpable got in effect a walk. The Allies’ objectives were three-fold: (i) to punish behavior which few outside the Soviet Union even understood that humans could be capable of (the Soviets understood it all too well, on which more later); (ii) to document for the world that all this really had happened; and (iii) to establish a principle that such behavior was once and forever more beyond that which civilized humanity was willing to tolerate. All of that was to be accomplished within a framework of law. 

Pretty high-falutin’ stuff, when you think about it. 

I want to poke a couple of holes in what happened at Nuremberg. Not in respect of the bastards we hanged; we should have hanged more of them. In fact, my standard response to the hand-wringers who moan that the death penalty is “inherently” cruel and unusual is to ask them if they are prepared to stand atop their dunghill and crow that the Nuremberg defendants ought to have lived. Ummmmm . . . silence. So shut up, please. Where I beg leave to depart from history, and from the tenets of what I do for a living, is in the effort to characterize what happened at Nuremberg as “justice” in any legal sense, and how mistaken it was to call it “law.” 

Allow me also to make absolutely clear up front that I draw a clear distinction between “justice” and “what happens in a court room.” Sometimes the latter results in the former, but generally not. It’s why I do not refer to “the justice system,” but rather to “the legal system.” It’s why I want to throw up in my mouth when I hear the Learned Colleagues or our judiciary bloviating about “administering justice.” Bullshit, with all due respect. Your task, if you’d bother reading the constitutional documents which create you, is to determine cases and controversies according to law. You can leave justice to those cosmic wheels which were grinding slowly before your grandfather’s grandfather was a gleam in his daddy’s eye. 

It was the IMT’s tragic flaw that it conflated “justice” with “law.” The main trial defendants were charged with four counts, for each of which the penalty of death was sought: 

(i) engaging in a common plan or conspiracy to commit a crime against peace; 

(ii) planning, initiating, and waging wars of aggression and other crimes against peace; 

(iii) war crimes; and, 

(iv) crimes against humanity. 

We had in the dock everyone from the guy who ran the Reichsbank until he was fired well before war ever broke out (Hjalmar Horace Greeley Schacht; he ended the war in a concentration camp himself) to the guy whose voice sounded sufficiently like Joseph Goebbels’s that he was used as a radio stand-in (Hans Fritzsche) to the guy who ran the Hitlerjugend (Baldur von Schirach). We had Fritz Sauckel, who was the Germans’ chief slave-catcher, and Albert Speer, who allocated the slaves so caught among the manpower-starved war industries, and Robert Ley, who was in actual charge of employing the slaves allocated. We had Joachim von Ribbentrop, the foreign minister who flew to Moscow on a warm summer evening in August, 1939 and with his Soviet counterpart Molotov carved up Poland and consigned Latvia, Estonia, and Lithuania to decades of Soviet depredation and slaughter. We had Wilhelm Keitel, the “nodding donkey” as he was known around the Führer’s headquarters, who had signed the Kommissarbefehl, under which party commissars attached to every Red Army unit were to be summarily shot upon capture – and were; we had Alfred Jodl, under whose command that order was implemented. We also had men of almost truly psychotic sadism, such as Julius Streicher, who stalked his bailiwick literally carrying a riding whip in his hand, and Ernst Kaltenbrunner, who ran the Gestapo and the Sicherheitsdienst (SD) of the SS, to the lunatic fringe element like Alfred Rosenberg, the national socialist chief ideologue, to the actually driveling lunatic, like Rudolf Heß, once the Number 2 man in the party, but who’d been pretty much emasculated as a power player well before fighting broke out. We had Admiral Erich Raeder, commanding admiral of the bastard step-sister of the German military, and his immediate subordinate, Karl Dönitz, who came within an ace of starving a country into submission, then got fleeted up to command the navy and eventually, in the mad-hatter days of May, 1945 succeeded his dead-and-burned Führer.

 The problem, from a purely legalistic stand-point, is that what these men were accused of doing had never been defined as a crime. Now, from the Soviet stand-point that was no hindrance at all. If they thought you needed to be shot, why, they’d just march you down to the execution cellar (or out to a trench in the woods, as they did with 14,000-odd Polish officers, during that period when they were the Nazis’ allies). But the Americans and British had this curious tradition that without a pre-defined crime there could be no criminal offense. 

When had there ever been a “crime against humanity?” When had there ever been something like the Holocaust? Oh, well, other than the Holodomor, which netted seven million Ukrainians in less than two years, versus six million Jews in twelve; and other than the Red Terror, when anyone with more than two shoelaces was likely to be denounced to a Chekist troika, hauled in by sundown and dead with a bullet hole in the base of the skull by morning; and other than the “liquidation of the kulaks as a class,” during which hundreds of thousands of “special exiles” were given as little as ten minutes to be gone from their villages with what they could carry in their hands, and then dumped out without any tools, seeds, or shelter north of the Arctic circle. 

“War crimes” was a concept at least not completely foreign to the people in that courtroom. Of course, if by “war crime” you mean the wholesale shooting of prisoners . . . well, you’ve still got that Soviet problem. If you mean the wanton destruction of cities, with no effort even mildly to target genuinely “military” objectives within them, then the fly in your particular ointment is Air Marshall Sir Arthur “Bomber” Harris, who set out to “de-house” the German civilian population. If you mean systematically starving entire peoples, as was done on the Eastern front, well, you’ve got several hundred thousand emaciated corpses from 1914-18 in Germany, victims of a highly successful blockade the principal intent and effect of which was to starve Germany into defeat. Furthermore, the slaughter of civilians in consequence of direct military action was accepted practice as late as the Duke of Wellington’s Peninsular War. 

“Conspiring to wage aggressive war”? Huh? Since when was war something that a nation just sort of ambled into, without any planning or coordination among the various officials within its government? Well into the 1930s the United States maintained plans or at least the outlines of plans to invade pretty much every single possible country we might get to, including Britain and western Europe. Were we “conspiring to wage aggressive war?” France in 1914 went to war with Germany because of her treaty obligations with Russia. Germany went to war with Russia because of her treaty obligations with Austria-Hungary. Britain went to war in 1914 because of an 75-odd year-old treaty about Belgium, one of the signatories to which was Prussia. In 1939 Britain and France went to war with Germany by reason of unilateral guaranty given to Poland by those countries, which Poland had not asked for. Was that a “conspiracy” to wage “aggressive war”? In any of the foregoing I am not arguing the morality or immorality of what the belligerents did. What I am doing is pointing out how empty of meaning “conspiring to wage aggressive war” is as a specifically legal concept. For that matter, how do you define “aggressive” war? If the answer is that the “people who started the war” are necessarily the “aggressors,” do try to recall that from August, 1914 to this date historians still argue over “who started the war,” or whose “fault” was it that Europe exploded. I’m going to suggest that, again, as a legal concept, something that open to good-faith disagreement cannot form the basis for the definition of a crime, at least not consistently with any Anglo-American legal tradition.

A “crime against peace”? When the hell exactly did “peace” become something injurable by an individual’s action? A crime against peace must necessarily occur during peace, for during war there is no peace which may be disturbed. How do you know when a particular act of state crosses the line from recourse to violence, which so far as I’m aware no sovereign state has ever abjured in any enforceable sense, to a “crime against peace”? Either a sovereign reserves to itself every mechanism of compulsion on which it can lay hands, or it does not. War is of course the ultimate mechanism of compulsion. The United States had recourse to it in 1846 to enforce a somewhat dubious claim, inherited from Texas, to a boundary located on the Rio Grande. Britain had recourse to it in the 1820s when it desired that Turkey should no longer rule Greece. Prussia had recourse to it in 1866 when it desired to exclude Austria-Hungary from further involvement in northern European German politics. Russia had recourse when the Ottomans were alleged to have misbehaved themselves in Jerusalem, a place which then lay within their domains. Were all these “crimes against peace”? The situations from which they grew sure as billy-o had no implications for the several nations’ national security or other vital interests. 

All of which is to illustrate a principle that is fairly well-established in Anglo-American law, viz. unless you can plainly point to a specific behavior and say up front whether that is or is not within the scope of a criminal proscription, then you cannot, consistently with due process of law, make a crime of that behavior. Every person is entitled to know whether his conduct in any particular respect does or does not constitute a crime; ergo, the constitutional bar on ex post facto criminal laws. 

With all possible condemnation of the depravity of what the Nuremberg defendants (and millions more like them, every one of whom likewise deserved to hang) did, the charges of the IMT were brazenly ex post facto. And hopelessly vague. And let’s not forget that little matter of hypocrisy. The elephant in the room in that respect was of course the Soviet Union, which had waged absolutely unprovoked, undeniably aggressive wars of conquest against Latvia, Lithuania, Estonia, and Finland. In the former Baltic republics they immediately upon winning them embarked on their trademark bloodshed, in exactly the same fashion as Stalin had attempted to decapitate Polish society from September, 1939 through June, 1941. But it gets better. We charged Karl Dönitz with war crimes for waging unrestricted submarine warfare. Which he had. But then he offered the affidavit of Fleet Admiral Nimitz, who informed the IMT that the U.S. submarine fleet had operated under orders substantially identical to those of the U-boats. Oh. We convicted him anyway. 

I must say that I’m certainly not the first person to notice the above “discrepancies,” as Twain would call them. No less a personage than the then chief justice of the United States, Harlan Fiske Stone, termed the IMT proceedings a “high-grade lynching party.” “I don’t mind what he [chief U.S. prosecutor Robert Jackson, a colleague on the Supreme Court] does to the Nazis, but I hate to see the pretense that he is running a court and proceeding according to common law. This is a little too sanctimonious a fraud to meet my old-fashioned ideas.”  Jackson himself observed to Truman in 1945 that the Allies “have done or are doing some of the very things we are prosecuting the Germans for. The French are so violating the Geneva Convention in the treatment of prisoners of war that our command is taking back prisoners sent to them. We are prosecuting plunder and our Allies are practicing it. We say aggressive war is a crime and one of our allies asserts sovereignty over the Baltic States based on no title except conquest.” 

But here’s where things really went off the rails with the whole concept of legalistic punishment for what Nazi Germany did, and why I say it was above all a mistake to call it “law”: We stopped. Way too soon. Every hack of a district attorney general knows that you either enforce a law whenever someone breaks it, or that law in fact does not exist, and everyone knows it. There were trials after the major war criminals’ trial. There were trials of the concentration camp doctors and commandants. There were trials of military commanders. There was a mish-mash of a trial starring Ernst von Weiszäcker and a couple of others from the Foreign Office, and a gaggle of other functionaries. The later trials were catch-as-catch-can affairs in large measure because the prosecution by that time was pretty much starved for staff and resources. They even had trouble rustling up enough judges to hear the later cases. 

The inevitable result was that in the western zones at least, trials subsequent to the main IMT trial became farcical in their outcomes. Just for example, we tried the commanders of the Einsatzgruppen and their immediate subordinates, the commanders of the Einsatzkommandos. There were four Gruppen, lettered A through D. Each Gruppe had several Kommandos beneath it. They were roving death squads. They were what the Germans did before they hit on the notion of the gas chambers. They killed retail, by gunfire, which means that a specific person had to point a tangible object – a muzzle – at each individual, and squeeze the trigger. Thousands upon thousands of times. At Babi Yar outside Kiev, from September 29-30, 1941, they shot not quite 34,000 Jews in this fashion. Other Aktionen were smaller, but likewise just as individualized. 

The Soviets, bless their blood-thirsty little hearts, shot everyone they could find who had anything to do with the Einsatzgruppen. The western Allies had a separate trial; no defendant was more junior than commander of an Einsatzkommando. Apparently all those guns went off at the command of some officer but without other human intervention. There were fourteen death sentences handed down (not even every defendant got one). Only four actually danced at the rope’s end. The others all had their sentences commuted in 1951 to terms of varying lengths. By 1958 all had been released. Let’s be absolutely clear about this: This were the bastards who actually gave orders to aim and shoot at mothers holding their infant children, cooing to them so their last moments on earth would not be fearful, to see one last time their baby’s smile just before the machine guns barked. And by 13 years after the war they were all free. All. 

The Foreign Office was hip-deep in the Final Solution. Its emissaries, ambassadors, and bureaucrats knew what was going on, volunteered to assist the SS, the SD, and the military authorities, and enthusiastically pitched in when it came to compiling the lists of places from which deportations were to be made and the people to be deported. They hectored, cajoled, and threatened nominal allies, nominal neutrals, and of course the authorities of whatever stripe existed in occupied lands. In Das Amt und die Vergangenheit: Deutsche Diplomaten im Dritten Reich und in der Bundesrepublik, a book written and published in 2010 pursuant to a 2004 mandate from the German government, the history of the ideological penetration of the Amt before the war and its seamier activities during the war are spelled out in painstaking detail. But most of the book deals with the largely successful whitewashing operation of the post-war period. Numerous – I mean numerous – men with blood up to their shoulders retired, with full pensions, honors, and dignities. Oh sure, there were certain places where certain officials could not be posted, but that was a comparatively small inconvenience. 

Which is to say that for the most part, the bastards got away with it. Alfried Krupp von Bohlen und Halbach, better known just as Alfried Krupp, so abused his slave laborers in Essen that even the SS complained about it. William Manchester’s damning book, The Arms of Krupp, contain descriptions of Krupp’s activities during the war that are beyond sickening. We attempted to try his father, Gustav, at the main IMT trial, but by that time daddy was too gibbering even by comparison with Heß. The only problem is that as of 1943 little Alfried was the legal owner of the whole cheese and been in actual command of running it for some time before then. He was the one who ought to have stood in the dock with Fritz Sauckel, Robert Ley, and Albert Speer. Oh, we tried him, eventually, and even nominally took all his property away. That lasted until the mid-1950s, by which time we needed him and his cannons again, and so by 1957 Alfried Krupp von Bohlen und Halbach was once again free as the wind and the wealthiest private person in Europe. 

By trying to shoe-horn “justice” into “law,” all we did was make a mockery of both. We hadn’t the time, the people, the money, or the psychic energy left to dispense justice to all who needed it through the mechanism of legalistic procedures. So we laid down and let them get away with it. Churchill had wanted simply to shoot them as and when found. That would have been more honest, and less morally ambiguous. Certainly, we could have and ought to have put them in a setting in which we could spread before the world the documentary, film, and living evidence of their actions. And then taken them out and hanged them, not bothering to characterize what they did as a “crime” against anything. We would have saved ourselves having to go through the repeated theatrics of the subsequent trials. Tie the prisoner to actions x, y, and z, and if the supervising officer finds it has been done, stretch that boy’s neck a few inches for him. 

In the end we come back to the point that if you march a column of defenseless people, including literally babies in arms, to the edge of a trench in the forest, and give or follow the order to fire, you deserve to die of a broken neck occasioned by your plummeting from a scaffold with a rope knotted about it. Basta! 

Nuremberg’s unfortunate precedent endures to this day, with International Courts for this-that-and-the-other dotting the landscape, none of them capable of dealing with a monster. Will anyone dance on a rope for what happened in the Balkans in the 1990s? For all those mass graves, which they’re still digging up from time to time? Nope. How about the Iraqis who worked for Saddam? They’re still alive, most of them. For the men who organized the genocide in Rwanda in 1994? Don’t count on it. For the Khmer Rouge? Not a chance; Pol Pot himself died peacefully in bed, decades after he killed almost 25% of the population of his country. An impartial observer is entitled to ask exactly what the hell good is law if it cannot mete out any sort of “punishment” other that confinement in pleasant conditions, with “three hots and a cot,” and that only after decades of grinding procedure? If law is not feared, it is not worthy of respect. If it is unworthy of respect, it is not respected, in small things as well as large. We did the law no favor at all when we so over-tasked it at Nuremberg in 1946.

And this is where I depart from the tenets of my occupation: There are potentialities for wickedness, for depravity, for barbarity, within the human heart and mind and which are simply beyond the law’s ability to define them, to address them, to bound them with comprehensible intellectual frameworks, and to achieve justice commensurate with their nature. Those actions – so monstrous that their only claim to human status is that humans commit them – are in every meaningful sense outside the law. Those who actualize those potentialities place themselves beyond the law’s protection. They make themselves enemies of the human race, as pirates were once recognized to be, and liable to public justice upon sight. So ought the Allies have proceeded after the war. It would have entailed many thousands of executions, but in the end justice might have been done, and the commanding officers of the Einsatzkommandos would not have died free men.

 

Dept. of Be Careful What You Wish For

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In which connection we find the Frankfurter Allgemeine Zeitung reporting that Scotland is going to have a referendum about independence.

Guys, this is a country in which 90% of the population is, on a benefits-net-of-taxes basis, living off the government in some respect.  Nine of every ten Scots is drawing on the public teat.  Where, precisely, is the money to come from if Scotland can’t tap into whatever wealth is left south of the border?  The national government in Westminster and the national parliament in Edinburgh have agreed to a referendum in roughly two years’ time, which will be open to all Scots ages . . . 16 and older.  Yep.  Children of 16, who except in the rarest (and most unfortunate of circumstances) have not even had the chance to understand what it means to pay one’s own bills from one’s own means — and among whom the “independence” movement seems to be particularly popular — will have the chance to over-ride their elders.  Isn’t that reassuring?

In the unlikely event that the referendum passes (only something like 30% support it at the moment), Scotland might turn into a test case of what happens when everyone wishes to live off of everyone else.  Oh sure, we’re seeing something like it in Greece, but then that’s just Greece, whose unfortunate population really hasn’t had much of a good day since the 1820s, if then.  Scotland has been at the forefront of society before (once upon a time if you wanted to be taken seriously as a doctor, you studied in Scotland; Scottish engineers worked all over and were highly prized; you don’t have to get quite as misty-eyed as How the Scots Invented the Modern World to accept that for a time Scotland could show its face anywhere without shame).  Perhaps they’ll be at the forefront of society again.

Maybe what is happening is that we’re are going to be afforded what navigators describe as a three-point fix.  You see, if you have a single celestial or visual line of bearing from an object of a known location, all you know is that you are somewhere along that line.  Get a second, intersecting line of bearing and there is geometrically speaking only one spot on the face of the globe which can simultaneously satisfy the conditions “I am somewhere along Line A and somewhere along Line B.”  Now if you get a third line of bearing from an independent fixed object, and if that line of bearing intersects at the same spot as the other two, the chances that you are not at that point become vanishingly small.  You are there; you have fixed your position; you have a “fix.”

You see, we have one line of bearing from Greece, a Mediterranean country that has embraced the notion that the government can provide all for everyone at no cost to anyone.  Greece has no industrial tradition (save for shipping), no traditions in the last several centuries (as in within the last millennium-plus) of educational attainment, cultural attainment, or refinement of any sort.  As was said of the United States in the early 1800s, who now reads a Greek novel, or performs a Greek play, or sings a Greek song?  Who looks to Greece for guidance in how to do anything right?  Anything at all?  Its politics since the Turks were run off nearly 200 years ago have been a devil’s cauldron of blood and back-stabbing, banditry, and comic-opera farce.  So that’s one line of bearing, taken from a country that’s been bitched up in one or more respects for centuries.

We have a second line of bearing from California, in which we see how socialism can take a nation’s most blessed region, from natural, demographic, and climatological perspectives, which has rich and vibrant traditions of cutting edge standard-bearing in industry, in husbandry, in learning, and (yes) in culture as well, and within two generations turn it into the kind of place Victor David Hanson portrays with sorrow over at his blog.  California is not a place that has to worry about paying for its own defense, or for controlling its own border, or for maintaining a foreign exchange, or for embassies, or for any of the other tasks that the modern nation-state must reckon its cross to bear.  California is sovereign, but within a federal system in which it is firmly embedded.  So that’s a second line of bearing.

And Scotland is set to provide us, perhaps, with that third line of bearing, from a nation and people who for centuries have been a by-word for vigor, for vision, for frugality, for self-reliance, stoicism, and courage.  There’s a reason that the 42nd Highland have since their organization in the 1740s been among the king’s most feared soldiers.  For three centuries Scotland has been a culturally distinct place within a larger kingdom, but not itself sovereign, either on its own (like Greece) or within a true federal system (like California).  Let’s be honest, folks: what Scotland will look like with 90% of the population net takers from the system ain’t exactly the stuff from which “Scots Wha’ Hae wi’ Wallace Bled” is written.  Welcome to your gory bed, or to victory the hand-out line down at the local ministry office indeed.

If Scotland is so cock-eyed raving mad as to think she’ll go it alone under these circumstances, we’ll have that third line of bearing, and when it intersects perfectly with the two from Greece and California, I think we can take it as settled that irrespective of culture, political structure, or history, if you pursue socialism you will drive yourself and your state squarely on the damned rocks.  Socialsim is therefore a course to be avoided.  The U.S. finds itself on a lee shore with the wind rising and the glass falling; it is high time to tack into the wind.

Maybe There’s Hope for the Place, After All; or Not?

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The Telegraph reports that a proposal to outlaw blasphemy in the new Tunisian constitution has been dropped.

Tunisia was where the so-called Arab Spring started, in those starry-eyed months so long ago.  Now we’ve got Islamofascists running rampant in Libya and Egypt, Assad no nearer to being run out of town on a rail than ever, and Jordan showing signs of being undermined.  Sweet.  Depending on how one is keeping score, our diplomacy in that part of the world is one-for-not-much.

We still haven’t retaliated for what happened in Libya.  To some extent that’s understandable, and as difficult as it is to say, commendable.  There were, after all, more or less genuine demonstrations around the country against the militias who staged the movie review carefully-planned attack, demanding they be disarmed.  The problem in Libya seems to be that there is no real effective government that could do the disarming; contrast Tunisia where at least there seems to be some adults in charge.

Dear Leader has expressed “relief” that the Muslim Brotherhood is now in charge of Egypt.  At the same time we’re about to cut them a nice whacking great check.  At the same time the rumors are swirling that we’re going to release the man who masterminded the first WTC attacks in the 1990s.

Assad keeps slaughtering his own.  At least for the moment he’s got Turkey at his back door.  On the other hand, with Erdogan, who famously compared democracy to a streetcar that one exited at one’s stop, in charge of Turkey and sometimes gently, sometimes not so gently stoking fond memories of Ottoman glories, I’m not really comfortable that story has a good ending either.

Assad’s backers, the Iranians, are getting closer to nuclear weaponry by the week.  Only now, after nearly four years of sitting on our hands, they’ve managed to move their R&D and production facilities to places where we can’t get at them with anything other than boots on the ground.  Of course this tribe has long announced their intention to obliterate Israel from the map.  What doesn’t get nearly as wide play is how thoroughly they give the balance of the region the wind up.  They’re Persians, you see, not Arabs.  The “diversity” mavens of the U.S. academy notwithstanding, the rest of the world doesn’t operate that way.  They cordially despise each other and act accordingly.  And Iran’s only desirable product, hydrocarbons, aren’t going to save them from the cataclysm of going from 7 live births per female in 1979 to 1.6 today.

But at least Russia’s still going to hold to its nuclear disarmament treaties with the U.S., so we don’t have to worry about that specter in the room.  Oh, wait, never mind.  Now if this is the kind of “flexibility” that Dear Leader was promising Putin — not knowing he had a hot mic on him — that he would have “more” of than after the election, exactly what does Dear Leader have up his sleeve to give away?  He’s already sold out the Poles and the Czechs, two places in continental Europe where we were actually sort of well-liked.  In a high point for “smart diplomacy,” he chose to let the Poles know by a telephone call . . . on the 70th anniversary of the Soviet 1939 invasion.  For a street-level view of what happened next, after September 17, 1939, in Soviet-Polish relations, see Janusz Bardach’s Man is Wolf to Man; for the larger story, see, e.g. Allen Paul’s Katyn: The Untold Story of Stalin’s Polish Massacre.  Think this is all just ancient history, stuff no one outside Poland ought to care about?  Vladimir Putin, formerly of the KGB, f.k.a. the NKVD, still self-identifies among his buddies as a “Chekist.”

This is what I find worrying about all the above.  After 12 years of self-flagellation over Vietnam, years in which we Americans neglected and indeed vilified our military, a bunch of crazies in Tehran were able to storm our embassy and hold our citizens hostage for over a year (that is, by the way, still a payable on our books, so far as I’m concerned); our only serious effort to get them out turned into a Keystone Kops disaster.  In 1980 we tossed out the clown we had and elected Reagan, who (with the ironic exception of Dear Leader) has to be one of the most personally popular presidents of the past 40 years.  We borrowed ourselves silly to re-constitute our ability to protect ourselves and project our power abroad.  We managed it, but in the process we went from the world’s largest creditor nation to its largest debtor, pretty much within the space of Reagan’s presidency.  We’ve never come back.  We’re now in a world that is every bit as dangerous, every bit as hostile, with multiple loci of economic and military challenge which didn’t exist back in 1980 (I mean, seriously, who outside her immediate neighbors cared what China had to say? or India?).  As in the late 1970s, we’ve allowed our military strength to diminish, at least numerically and materially (in terms of quality of personnel we’re most likely close to the best we’ve ever had, and arguably the best anyone’s ever had).

The difference between 1980 and 2012 is this:  We’ve long since ground our seed corn, economically.  We owe $16 trillion.  Where are the resources going to come from if we are to crawl back now as we did then?

Genl Marshall, a truly extraordinary man, was extremely worried during the war.  He was not worried that we would lose it.  He was worried that it would go on so long that the derangements to American society and its economy would no longer be recoverable afterwards.  After some period of time, the massive spending, borrowing, intrusion of governments into the ordinary workings of American business and the substitution of its objectives for private persons’, diversion of men, money, and assets from peaceful and productive pursuits, and absence from the workforce of most of a generation of healthy males (the unhealthy ones weren’t in the military, recall), would so erode the channels of economic life that the U.S. would be economically defeated even though militarily victorious.  Perhaps he was thinking of the position that France found itself in the late 1780s.

I’m going to suggest that we may have arrived at the point Genl Marshall foresaw, but through largely non-warlike means.  Servicing a $16 trillion note will suck the oxygen from the air that American business needs to function.  The government spends a proportion of our GDP that is unmatched for any period since the war ended, and with the healthcare catastrophe it is proposing to take over, directly or otherwise, a full fifth of the economy.  The federal tax system is already pulling a proportion of the GDP that is pretty close to what it’s ever been able to raise (roughly 19-21%, as I recall), irrespective of the bracket structure in place at any point.  Over a third of all American working-age adults are simply no longer part of the workforce.  The collapse of the labor force is, by the way, a trend that goes back to 1950.  Somewhere I saw a chart that superimposed a graph-line of labor force participation over recessionary spells, going all the way back to 1950 or so.  What struck me was that with each recession, labor force participation plunges.  It then comes back as the economy comes out of recession . . . but it never again reaches the level it had just before the drop.

If growth shot up to a sustained breakneck pace per year we might be able to grow our way back, if at the same time we hived off massive portions of federal outlays.  But chopping off that kind of spending, when so much of the economy has become dependent on that spending, is going to do what to our short-term growth?  And exactly how realistic is it to suppose that we can sustain that frenetic growth rate for long enough to get the bills paid?  If every generation or so the business cycle takes a downward turn, and if we need multiple generations’ worth of uninterrupted growth to work our way out of our position, how likely is it that we’ll pull it off?

We may have painted ourselves into a corner.  Will we be permitted the time to stand pat and wait for the paint to dry?

Don’t Worry Dad; That Won’t Happen to Me: Uninventing Government

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Which is the short version of the speech that pretty much every lead-footed teenager gives his parent when it is suggested that driving like a bat out of hell is a good way to end up on a slab.  I’m a better driver than those guys in the paper last week.

This is the same speech we’re getting from our political class, with its refusal to address the spending avalanche.  Right now the Fed is the purchaser for over 90% of new issues of long-term treasury debt.  Our left pocket is the only source of borrowed money for our right pocket, and our right pocket is shelling the stuff out as fast as the left pocket tops it off.  At that fund-raiser where dear ol’ Mittens was so crass as to suggest that having 47% of your adult population not paying any money into the game was not a good idea, he also observed out that when a government is buying over 90% of its own debt, “at that point you’re just making it up.”

Almost no one’s really picked up on that comment; certainly no one is making an issue of the fact that we’re just making up our economy.

We’re assured by all the Deep Thinkers that this is not really a problem.  The Fed will stop in time; the economy is just about really to take off.  We’re going to grow our way out of this mess.  No, really; we mean it, this time.  And again and again, the numbers keep coming back — unexpectedly!!, as Instapundit would drily note — short of anywhere near what they would need to be for that to occur.  And so we keep firing up the presses and printing off another run.

Math, of course, operates as it will, irrespective of person, party, or country.  That we’re the U.S., or that we’re so diverse a society, or that we have a flashy military, or lots of television shows, or whatever won’t insulate us.  That either party is in or out of power, or partly-in and partly-out won’t help.  All the Learned Cogitations of our judiciary won’t stop it.  The solemn assurances of our chattering classes (of which I am now to some degree a member, I suppose) that Everything Will Be OK can’t stave it off.  Two plus two will never equal anything other than four.

As long as the federal government continues to spend not only more money that it raises in tax revenue, but vastly more than it can ever raise in tax evenue, even by expropriating not just the “1%” but the next 49% as well, the avalanche will not pull up short.  It will reach the bottom of the hill, where we are standing, absorbed in the most recent doings of Big Bird, or the Kardashian sisters and their lady parts, or whatever “reality” show is currently up in the ratings.

This is what it looks like when the avalanche hits bottom.

Germany’s hyper-inflation destroyed its middle classes.  The poor were already poor and generally on some form of relief.  The wealthy either had their wealth in hard assets or abroad.  The middle class, the ones who got up in the morning, went to work, came home and played with the kids, or with the kids’ mommy, went to church, listened to concerts, and generally pursued that inward self-development that is summed up in the uniquely German concept of Bildung — they were wiped out.  For almost 150 years Germany had consciously, aggressively pursued the creation of a society based on Bildung, a notion that is quite a bit broader and deeper than what English-speakers would think of as “education,” or “learning,” or even “cultivation.”  It is, to be sure, all those, but it is also quite a bit more.  That segment of the society that Germany knew as the Bildungsbürgertum was its sea anchor.  It was what kept the ship pointing into the waves.

Within a matter of months the Bildungsbürgertum was largely wiped out, their inward Bildung unable to heat the apartment or even rent one.  The wealthy industrialists, merchant princes, bankers, and landed aristocracy took a lick, of course, but they survived.  The proletariat, the Pöbel, was not to be considered sortable.  And so the Bildungsbürgertum looked about them for a mode of existence, a form of organizing their world and their understanding of themselves in it, that would validate them, elevate them, show them a way forward.

Recently Peter Watson, an English author, published a book, The German Genius: Europe’s Third Renaissance, the Second Scientific Revolution, and the Twentieth Century, a social, cultural, and intellectual history of German from 1750 to right about now.  His point in doing so was to demonstrate that there was a German culture before1933, and that to view Germany and its history exclusively through the prism of the Nazi era was not only to do it a disservice but also to abandon a rich trove of human insight.  I am of course over-simplifying his argument, but Watson identifies the shattered Bildungsbürgertum of the 1920s as forming a large constituent of the fertile soil where sprouted the plants whose fruits were the mountains of corpses shown on the newsreels of the camps’ liberation.

There is only one sure way to keep a teenager from driving to his own death.  You take away the keys.  There is only one sure way to take away the ability of the political class to drive us over the cliff.  You take away their power.  Kicking out Set A of them and replacing them, temporarily, with Set B will not do the trick.  We must get over the notion of “reinventing government” as a deus ex machina.  What is wanted is not “reinventing”; it is uninventing government that will save us, if we are to be saved.

Whither the Marines?

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As Instapundit would say, “Read the whole thing.” Follow some of the links as well, while you’re at it.

I was in the navy, on a steam-powered, automatic-nothing guided missile destroyer, of the Charles F. Adams (DDG-2) class; they were universally known in the fleet as “Adams cans,” the reference being to the destroyer type’s appellation of “tin can.” It fit, too; once an A-6 Intruder was practice bombing our wake with smoke bombs, about ten-pound chunks of inert metal with a smoke flare in the nose which was activated by contact with seawater. The idea being the plane would target our wake, but about 500 or so yards astern of us. This goof-ball dropped one clean through our ship. And when I say “clean through our ship,” that’s exactly what that little ten-pound chunk of inert metal did – it went in on one side of the ship, through an exterior bulkhead, blew apart a power panel for our missile fire control radars, went through a deck, through the weapons department office, out another external bulkhead, through another deck and a passageway, almost unburdening us of our chief boatswain’s mate, through the brand-new refrigerator in the chiefs’ mess, through another external bulkhead, and out onto the main deck where it finally hit something capable of bringing it to a halt, viz. the starboard boat davit, a rather massive chunk of steel, and bounced back into the scupper. 

That’s what a small, inert piece of metal did. Had it penetrated not the superstructure three decks up, but rather main hull in a main engineering space, this is what would have happened: We ran on super-heated steam. If my memory is correct the outlet temperature of a boiler was 945 degrees Fahrenheit at 1,275 p.s.i. A pinhole leak of live steam will cut a human body in half (oddly it also cauterizes as it cuts, so you have two half-men, but comparatively little blood). A significant irruption of main steam will boil alive everyone in the space. The fuel oil running to the burner face was under something like 400 p.s.i. A tiny breach of a pressurized fuel line would produce a fine mist of fuel oil, which if – when is better – it hit a piece of exposed metal that had steam behind it, would flash into a fire ball that would consume the space. And everyone in it. That happened, in fact, to a sister-ship of ours, USS Conyngham (DDG-17). A fuel oil strainer had been overhauled in the yards, but the technical drawings were incorrect; they didn’t show a retainer pin going all the way through a shaft. The retainer pin vibrated loose and the pressure inside the strainer ejected the shaft, much like a projectile from a Nerf gun. The resulting quarter-inch or so geyser of fuel oil lit off. Conyngham burned for two days (miraculously only one man died). One of our squadron-mates had a main steam line rupture, shortly after we decommissioned. Cooked several people in the boiler room.  Modern non-nuclear combat vessels tend to be gas-turbine powered, and if anything the jet fuel they run is even more highly inflammable than our good ol’ DFM.

The ladders coming up out of the main engineering spaces are maybe eighteen or so inches wide, vertical or nearly so for a good part of its length, and at the top the egress is through a round scuttle not much wider than the average male body. That’s your route out of hell, and if you’ve had your legs cooked down to the bone, or a falling chunk of machinery has crushed a foot, or you’ve been knocked senseless off a platform down into the bilges twenty feet below, how you get out is your shipmates manhandle you up that ladder and out of the space. Failing which, you die. 

Isn’t it nice to know that your shipmates in that space, on whose upper-body strength your own survival depends, won’t be able to shift your body (try hauling around an unconscious person for a distance; try maneuvering that person, say, up an ordinary stairwell; you’ll get a good understanding for the expression “deadweight”) because the strongest 5% of them are only as strong as the bottom half of their male shipmates. 

My father-in-law served in World War II. He earnestly counseled his daughter to have any son circumcised. Not for any religious reason, you understand, but because the male foreskin is a vulnerable point of infection (I’m given to understand that one of the more effective non-medicinal AIDS preventives is circumcision; apparently that li’l ol’ flap of skin is just transparent to pathogens for some reasons). He related (without too much detail) how it was the uncircumcised men who were forever getting infections, in the inevitable dirt of active service. What would have happened if those sailors had, as a female friend of mine put it once, “an interior organ mounted on the outside of their body” beggars imagination. I refer the gentle reader to Eugene B. Sledge’s With the Old Breed: At Peleliu and Okinawa for a physical description of the hygienic conditions attendant on prolonged combat operations in warmer climes. 

It is simply dishonest to pretend that the political decision to declare that no meaningful, material distinctions exist between the halves of the human species has no consequences for the lives of the Americans in uniform, of both sexes. What makes the facts behind this story so scandalous is that the people driving this are practicing intellectual dishonesty with the lives of the men (and women, too) they’ve sworn to protect.

For shame.

 

Which is It? You Decide; I Can’t

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I think that’s a fairly close paraphrase of an entry in Harry Truman’s diary, in which he agonized whether to overlook several thousands of dollars of fraudulent contracting in building the new courthouse . . . in order to save several tens of thousands of dollars in the overall project cost.  He couldn’t decide which to call it.

So also with one of the most famous photographs of the entire 20th Century, at least here in the U.S.  It’s the photograph of a sailor in Times Square when the surrender was announced.  Carried away by the euphoria of the moment, he reached for — well, we don’t know if she was the first he saw, or the most likely-appearing, or what it was that attracted his attention.  But she was a nurse, a total stranger, and like him she was in the streets when they announced the end of four years of killing and dying.  Who knows whether or if so how many wounded or maimed boys she had seen?  Maybe none.  Maybe some.  Maybe more than she’d ever known could exist.

And he grabbed her and laid on the Kiss of the Century.

This moment has lately become the subject of a bit of a fire storm.  The “feminists” of today, apparently with not enough to occupy their thoughts what with 750,000 more women unemployed now than in January, 2009, with small businesses collapsing wherever one looks — small businesses owned by husband-and-wife teams, or by single women who’ve got children to raise and can’t accommodate a 9-to-5, punch-the-man’s-clock job, or whatever — have decided that The Kiss was actually a sexual assault, possibly a rape, and the complete lack of public outrage (including by the “victim” herself, who stayed in touch with her “attacker” and even re-enacted the scene, publicly, with him decades later) evidence of a pervasive “rape culture.”

Crates and Ribbons (the subtitle of which is “In pursuit of gender equality”) weighs in.  Here’s the money quote: 

“The articles even give us Greta’s own words:

‘It wasn’t my choice to be kissed. The guy just came over and grabbed!’

‘I did not see him approaching, and before I knew it, I was in this vice grip. [sic]’

‘You don’t forget this guy grabbing you.’

‘That man was very strong. I wasn’t kissing him. He was kissing me.’

“It seems pretty clear, then, that what George had committed would be considered sexual assault by modern standards. Yet, in an amazing feat of willful blindness, none of the articles comment on this, even as they reproduce Greta’s words for us. Without a single acknowledgement of the problematic nature of the photo that her comments reveal, they continue to talk about the picture in a whimsical, reverent manner, ‘still mesmerized by his timeless kiss.’ George’s actions are romanticized and glorified; it is almost as if Greta had never spoken.

“In a way, I understand this. The end of war is a big deal, and the euphoria felt throughout the nation on that day is an important part of American history.”

And in the other corner, we have Victory Girls, whose wrap-up runs —

“So nowhere does Friedman actually call it assault. After the fact, she went back to work proclaiming that the war was over. And in the decades after that iconic moment, she repeatedly took the time to meet up with the sailor in the photograph.

“But the woman ‘assaulted’ doesn’t get to say whether or not she was assaulted, right? That’s up for the feminazis to decide, because clearly, women are too dumb to make those kinds of judgements for themselves.

“This photo wasn’t an example of sexual assault. It was an example of the exuberance of a nation exhausted by war, having millions of the best and brightest among them either be killed or injured. The photo captures that moment, the emotions behind it and the excitement, relief, and enthusiasm of the day, perfectly.”

 I think the key phrase in Crates and Ribbons is “by modern standards.”  The author is more than just a little bit falling into the same error as those who want to read the 14th Amendment back into the Pilgrims’ dealings with the locals they found in 1620.  People have not always dealt with each other the way we do now; they have not thought of each other in the same ways.  Things that we just laugh off now would have destroyed a person’s position in whatever society that person moved in — think Lydia’s escapade with Wickham.  Things we might view as at least questionable (such as grabbing a perfect stranger on the streets of New York in front of God and everybody and laying a lip-lock on her) or worse just don’t seem from the participants’ recollections and contemporaneous statements to have been that big a deal. 

Recall that all across Western Europe for the year-plus preceding this photo’s date, perfect strangers, both men and women, had been grabbing each other and kissing, as for them nearly six years of slaughter passed from their lives.  Maybe in the relief that they or their family members weren’t to be hauled in by the Gestapo after all, and “disappeared” into Nacht und Nebel (“night and fog”; the program involved snatching people, shipping them off for “Sonderbehandlung” — “special handling,” i.e., killing them — but denying their families all information of their fate; it was adopted specifically as a terror mechanism for the occupied countries), maybe, just perhaps, they overlooked the pervasiveness of the rape culture for a few moments.  Poor deluded Europeans; what a good thing Crates and Ribbons has come along, all these years later, to clear up the real issues for them.

The pictures from Europe had been in the papers, the newsreel footage splashed across screens everywhere there was a roof over the theater to run it in.  Is it remotely plausible to suppose that the people in Times Square that day had no idea what kind of celebrating took place at war’s end?

Context is not irrelevant.  Want to bet any strangers grabbed each other and kissed the night Dear Leader won the election?  Is this euphoria that, 54 years after Brown v. Board of Education of Topeka, Kansas we elected president a fellow who, had he been alive then, would have been unwelcome at diners across the nation, and in certain areas would have risked a beating or worse had he defied the prevailing norms, irrelevant to what happened that night?  Say I’m minding my business on a sidewalk and without warning I’m dashed to the ground by a blind-side flying tackle from someone out-weighing me by 100 pounds (hard to imagine that; I’m what they call a “big ol’ boy” around here), breaking my arm in two places and maybe knocking out a tooth or two.  Now, all the elements of a battery are present: (i) intent to cause the contact; (ii) no consent to the contact; (iii) no reasonable belief that I have consented to the contact; (iv) an “objectively” offensive nature of the contact; and (v) actual physical injury resulting from the contact (actually, that last element is not strictly speaking necessary, except to prove up damages).  Now let’s say that I’m tackled because the chap who takes me down sees the runaway truck and sees that I don’t.  Is his benign — charitable, really — motive irrelevant to whether as a moral proposition I should be exercised about my broken arm and missing teeth?  Would I be a thankless wretch to be upset at him?

I wasn’t Greta.  For that matter neither were the authors at Crates and Ribbons or Victory Girls.  Me, I’m going to reserve judgment, which means that I’m not going to get either all misty-eyed about it, or pop-veined splenetic either.  Once upon a time the Reverend Mr. Brontë (Charlotte’s and Emily’s daddy; he’d changed his name in honor of Lord Nelson, whose Sicilian title, bestowed after his victory at Aboukir Bay in 1798, was Duke of Brontë) sent the Duke of Wellington some drawings of what he believed to be an improved musket lock for the British infantryman.  The reverend was an amateur inventor and the Iron Duke the Master of Ordnance at the time.  The Duke returned, “FM the Duke of Wellington presents his compliments to Mr. Brontë.  The Duke believes it to be his duty to refrain from interfering in duties over which he has no controul.  Much time would be saved if others were to follow the Duke’s example.” (emphasis mine)

 Much time would be saved if the well-meaning folks at Crates and Ribbons would refrain from involving themselves in duties over which they have no controul.

In closing, however, I must also take exception to the condescension that oozes from the Crates and Ribbons comment that, “In a way, I understand this. The end of war is a big deal, and the euphoria felt throughout the nation on that day is an important part of American history.”  Very respectfully, and with all possible charity and Christian love for you as a fellow pilgrim, you don’t understand one f*****g thing about that picture’s background, or the world which those two people had just escaped.  Not.  One.  F*****g.  Thing.

Let’s hear, just for contrast, from someone who did understand it.  Paul Fussell was an infantry lieutenant who’d been wounded in Europe.  He stopped a shell splinter with his leg.  The sergeant lying in arm’s-reach beside him that day . . . ummmm . . . he’s still in France.  I hear they mow the grass over his head real nice every so often.  Still, Fussell had been patched up and was on his way to Olympic, the planned invasion of the Japanese home islands.  And then we dropped the bombs.  In his 1981 essay “Thank God for the Atom Bomb,” he recounts what it was like to be a young male, in the ground forces of the combat branches, and alive when Hirohito put his foot down and said enough was enough, finally:

“But even if my leg buckled and I fell to the ground whenever I jumped out of the back of a truck, and even if the very idea of more combat made me breathe in gasps and shake all over, my condition was held to be adequate for the next act. When the atom bombs were dropped and news began to circulate that ‘Operation Olympic’ would not, after all, be necessary, when we learned to our astonishment that we would not be obliged in a few months to rush up the beaches near Tokyo assault-firing while being machine-gunned, mortared, and shelled, for all the practiced phlegm of our tough facades we broke down and cried with relief and joy. We were going to live. We were going to grow to adulthood after all. The killing was all going to be over, and peace was actually going to be the state of things.”

I tell you what, Crates and Ribbons:  Go find you a jury box of twelve gold-star mothers (or their daughters, if you please) from World War II, or any other American war since then, and see if you get you a conviction of the man who kissed Greta, that summer day in 1945.

If not, go save some time.

What did JFK Have to say About the Future?

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That he’d seen it in Germany, and “it works,” if memory serves. 

Well, ol’ JFK certainly got the first half of it right.  If by “future” he meant a universe in which the state asserts and is conceded the right and power to control every last little penny-ante detail of the citizen’s life.  In Germany of course the party then in power simply asserted that it was going to do so, and then did.  Here in the U.S. we’ve arrived at a point where the government just taxes you to death if you don’t do what the government can’t constitutionally force you to do directly.  Tomato, tomahto.  Whatever.

But here’s the point of this post.  In the Frankfurter Allgemeine Zeitung we read an article over a forthcoming new law and accompanying regulations which are going, allegedly, to accelerate the Germans’ drive towards “minimum energy buildings.”  The first such round of Fiat Lux! legislation came in 2009, apparently.  The next two steps are mandated for 2014 and 2016 respectively, and they’re supposed to reduce energy consumption per newly-built structure by 12.5% per step.

Tellingly the statute and regulations are proposed in order to implement an EU policy.

Oh sure, one may qualify for an exemption from the new standards, if one can demonstrate that the cost-benefit analysis over the expected life span of the new building produces a negative number.  Of course, every time one looks up from one’s breakfast burrito it turns out that the “renewable energy,” which Germany has embraced with a faith so touching one is tempted to overlook how closely it comes to problems with the First Commandment, is going to get vastly more expensive — unexpectedly! — as Instapundit is fond of observing; the most recent numbers quoted show increases by 50% more than previously estimated.  So all we have to do is artificially crank up the cost of the energy one is saving and hey presto! the cost-benefit analysis goes positive.  Right now they estimate (and let’s not forget how unfailingly accurate government estimates of cost are) the extra costs for the 2014 step-up at €1.2 billion per year over the construction industry; the 2016 mandates will (sure you can take this to the bank) come in at only €2.5 billion per year.

The government estimates that each percent of consumption reduction will add 1.7% to the cost of building.  The article unfortunately does not mention whether the novel concept of diminishing marginal returns has been taken into account in calculating that number.  Anyone want to bet it hasn’t?  Anyone want to bet that the last 5% reduction in energy consumption will cost exactly what the first 5% cost? 

Let’s run this through the Countrylawyer Patented Economic Translation Machine.  I bought my house back in the mid 1990s for roughly $180,000 (yeah, I over-paid, and yes, I understand that what I paid wasn’t the builder’s cost, and the German numbers are builder’s cost figures).  Let’s just assume though that my builder made $45,000 on the sale, for a GP% of 25%.  The BLS shows a cumulative consumer price index increase from my month of purchase to now of 45.25%, so that makes my builder’s cost to build my house right now $196,000.  Each percentage of that cost works out to be $1,960.  We have gas heat and hot water, and electric everything else.  Over the past twelve months we spent $604.90 on gas (I keep the thermostat on 61 during the winter) and $2,254.08 on electricity, or $184.84 per month average.  Our local utilities in fact do charge on a linear scale above the monthly minimum bill, so each percent total energy reduction will net me out $22.54 per annum savings.  Let’s get real optimistic and assume that my house has a useful service life of 75 years.  Per Revenue Ruling 2012-28, the § 7520 interest rate for October, 2012 is 1.2%.  An extra $22.54 per year, ignoring inflation and at a 1.2% discount rate, will be worth $1,110.56 over the house’s 75 year useful life span.  That is, of course, if I were paying cash for the house and expected to live in it for the full 75 years.  But my service life in this house, as of now, is more in the range of 30 years (if that).  In contrast I’m paying the full cost of the percentage reduction in consumption up front, and I have no way of ensuring that I will get my money back out of the house (it will experience economic depreciation and functional obsolescence over time).  Recall also that we’re ignoring the additional cost of energy-efficient maintenance and repair as well.  My net present value of that extra $2,254 over 30 years is $565.03, for which I would be paying $1,960.  I’m upside down to the extent of 71% of the out-of-pocket cash cost of each additional 1% efficiency.

But here’s where the Germans have really gone off the rails.  It has to do with New York City, and the lethal combination of insane building codes and rent control.  The expense of upgrading to new building codes, and the restricted ability to pass along those increasing costs to renters, has ensured a steadily diminishing stock of housing in the city, with the result that costs for halfway decent housing have skyrocketed and the city is crowded with places like Bedford-Stuyvesant.  If you remove the economic incentive to keep the place up, the owner has no incentive to do so, at the risk of pointing out the obvious.  If you force him to upgrade what happens is you run capital out of the housing market.  Who will pump his money into a place where he’s exposed to unknowable future expense which he can be reasonably assured he won’t be able to pass on to his customer?  The only option left is housing projects, which coincidentally sprawl all over the city.  For a description of what public housing looks like, I refer you to P. J. O’Rourke’s Parliament of Whores.

The new law in Germany exempts existing buildings from the new statute and regulations.  So let’s see where that leaves us:  We’ve made new construction vastly more expensive and less economically attractive.  We’ve built in an incentive to go with the old existing building.  Although for the moment there are no upgrade mandates, we can’t be sure of that, so we trade the possibility of expense with the old building for the guaranty of expense with the new.  They’ve also written in a mandate for sellers and landlords to document their building’s energy consumption (O! for a plaintiffs’ bar in Germany).  And finally, this being Germany, after all, they’re looking at establishing an Energiepolizei.  Yep, you heard right:  Around here you hear lines like, “What are you gonna do?  Call the energy police on me?”  See, that’s a joke here. 

The premise of Friedrich Hayek’s The Road to Serfdom was that the path Germany had followed to get where it was in 1944 was the same road that Britain was on, only with a 20-30 year time-lag.  He observes in the book’s opening that that is precisely the point of his concern for his adoptive country.  Where Germany had been, Britain was; where Germany was, Britain was heading.

I can’t recall the number of times that I’ve been reading a narrative by someone who survived 1933-45 Germany, in which a person’s having to travel from Point A to B is referenced.  And almost invariably the phrase will come up that the narrator, or the traveller, or the prospective traveller has “excellent papers.”  You see, without “excellent papers” you might be detained underway and invited in to chat with your friendly neighborhood Staatspolizei official.  I guess soon we’ll hear people talking about their house or apartment, and how so-and-so had “ausgezeichnete Papiere” for the place.

So in a very real sense dear ol’ JFK in fact had seen the future.  My question concern is, are we still seeing the future in Germany?

Boondoggles, Hidden Giveaways, and “The Chicago Way”

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Everyone remembers the fall of 2008, when Everything More or Less Came Unstuck, right? When the chickens began coming home to roost, and everyone standing under the tree branches found out what was in them? What isn’t as widely known, but ought to be, is how a technical feature of the Internal Revenue Code was the subject of a sordid sequence of jiggery-pokery, resulting in a $16 billion give-away to the new president’s supporters. It’s also the story of how a crew of Wall Streeters just decided to hook up their own, bugger all to what the law says, and how that decision got validated by the same bunch who then spent the next four years excoriating all them fat cats.

But first, a bit of background. Taxpayers which have an operating loss that exceeds their income are said to have a “net operating loss” – an “NOL” – for that year. Section 172 of the Revenue Code permits them to apply that unused NOL against up to two preceding years of the taxpayer’s positive net operating income (it’s called an “NOL carry-back” in that case and involves filing an amended tax return for the years), or alternatively carrying it forward for up to 20 years (an “NOL carryforward”). The idea is to permit taxpayers to level out their taxable income and therefore their tax obligations over a period of years. Makes sense, certainly from a tax planning perspective but even more importantly from an entrepreneurial perspective. In early years of a start-up’s life it is likely to have little but net operating losses as it builds itself. Permitting those net losses to be carried forward and applied against a year with positive income advances the point in time at which the enterprise gets off the ground. 

For a taxpayer that is not a “pass-through” taxpayer – one that pays its own taxes at the entity level – that accumulated ability to offset future years’ income is an economic asset. Since an entity can be sold (unlike Aunt Sally), having a built-up ability to offset future years’ income makes that taxpayer a much more attractive object of a suitor’s affections. And sure enough, companies in the market to acquire other companies were powerfully attracted by such assets. Until 1986 so long as the loss company either maintained its legal identity or underwent a tax-free reorganization, the acquiring corporation could derive the benefit of its target’s prior accumulated NOLs. 

Well. Heaven forfend that anyone salvage some benefit from prior misfortune. Apparently there grew the thought that the “policy” (whence the logic supporting it derives is not terribly clear) of Section 172 is only to permit losses and income to offset each other when it’s the same taxpayer realizing both. There is of course no inherent such policy. The Deep Thinkers overlooked the fact that a target corporation with a significant accumulated NOL carryforward has accumulated it for a reason – it has been losing significant money for some period of time – and one of the many other implications of that reason is that the corporation is not likely to survive. It will generally either collapse or get sold. In either event it will be sold at fire-sale prices, the shareholders will take a bath, the employees will lose their jobs, the vendors will take it on the chin, and in short the potential wealth represented by that enterprise will vanish. The notion that the increased price an acquirer could pay and still make money on the deal (boo! hiss!) if it could enjoy the benefit of that NOL carryforward is in fact a benefit flowing to the taxpayer who has accumulated the loss, apparently did not make too deep an impression on the Deep Thinkers. They would rather preserve the purity of their Tax Policy than see an economic enterprise survive (private people making money=bad; drawing a government check for “public service”=good). 

Thus came to pass (pun intended) Section 382, which severely limits the acquiring taxpayer’s ability to recognize its target’s built-up NOL carryforward. Subsection 382(m) grants the Secretary of the Treasury the authority to make such regulations as may be necessary to implement the purposes of Section 382. 

2008. Comes the crash. Banks are failing; banks are tottering; thanks to the intertwinedness of the financial system, their losses are mounting rapidly, and spreading as fast as socially awkward pathogens among a crowd of high schoolers. The “healthy” banks had a problem, though: Why on earth should they pony up the money to buy a bunch of losses they could never derive any benefit from; why should they pay “sticker” price for such turkeys? More to the point, how could the boards of the healthy banks justify to their shareholders pouring sand down those rat-holes of banks when no one – literally no one – could be sure what the value of the targets’ paper was? 

Along comes the Treasury department. On September 30, 2008, it issues Notice 2008-83, which exempted financial institutions from the constraints of Section 382. What?? For starts, a “notice” is not a “regulation”; the process for adoption of the twain are quite distinct. Second, how can the purpose of Section 382 – limiting taxpayers’ ability to buy and then use someone else’s accumulated NOLs – be implemented by an ad hoc exemption from the section’s provisions? Finally, precisely what authority is there in the Revenue Code for exempting some corporate taxpayers but not others from black-and-white provisions of the Revenue Code which apply to all corporate taxpayers equally? The long and short was that Notice 2008-83 was illegal as hell. Pretty much everyone knew it (but wait, it gets better, as it usually does in Washington). 

To get an idea of just how big a boondoggle this was, before Notice 2008-83 was issued Wachovia was looking seriously at an offer from Citibank for $2.16 billion. After the notice? Well, after Wachovia’s losses got put on the table, Wachovia sold to Wells Fargo for $16 billion, a nearly 700% increase in value. Wachovia’s $70+ billion in losses will, if fully used to offset its purchaser’s subsequent income, generate a $25± billion boost to the bottom line (over up to 20 years, of course, and one needs to work the present value of that to get a more relevant number). By the way, I refer the gentle reader to my point made above that this additional almost $14 billion in fact does represent the recapture on the back end by the loss-maker. 

Congress – you may remember them: they’re the folks who decided Section 382 was the law of the land subject, apparently, to whatever the hell the Secretary of the Treasury feels like doing on any particular day – immediately leapt in to cut Treasury off at the knees by legislatively repealing Notice 2008-83. Which it did, in February, 2009, by which time of course we had a new administration in the White House, backed by massive legislative majorities in both houses. Standing up for fairness, the little guy, and punishing them dam’ fat cats on Wall Street, Congress showed the world that carving out exceptions from the law to favor pet constituencies who had dumped untold money in to polluting the political process (well, we won’t mention that Wall Street backed by an overwhelming margin the fellow who Won and his party; that doesn’t fit what the media calls “the narrative” these days) was not the American way any more. No; the open hand to the oligarchs of the counting house was withdrawn, and Congress broke it off in Treasury . . . prospectively only. The repeal not only was made not retroactive to September 30, 2008; it was not made applicable to any bank merger that occurred before that date (and of course those banks cannot claim to have relied on an illegal notice – which their inside and outside counsel would have in any event told them was flagrantly illegal in the first place – that had not been put out yet). Congress and the White House, in other words, made a Great Big Show of slamming the barn door shut, long after all the big horses had marched out of the barn, caparisoned, groomed, and starving to browse at the public fisc. Way to look out for the little guy, fellers!! 

It gets better (didn’t I promise you that?): Congress in the same enactment – the $780+ billion Porkulus Bill – created what is known in the land of tax-geekdom as a “rifle shot.” A rifle shot is a provision that is shoved in to a tax law on the sly and that is so narrowly crafted that, while blandly neutral on its face, it applies and can apply to exactly a single taxpayer. As one might think from the fact that the practice has a nickname in the first place, they’ve been around a while. But most of them were penny-ante things, bought of famously corrupt legislators like John Murtha and Robert Byrd. But this rifle shot was . . . well, let’s just say that the main battery on the Iowa-class battleships is generally described as 16″/50-caliber “naval rifles” (by the way, for bore diameter >1″, “caliber” is an expression of barrel length as a multiple of bore; thus each of Iowa’s nine main guns are 50 times a 1.33-foot bore, or roughly – I’m doin’ this math in my head, folks – 66 feet long; they’ll toss a shell that weighs over 2,300 pounds over 20 miles, and put in on a target measured in square yards). If we include those tubes o’ doom in the definition of “rifle,” why then yes, my chickabiddies, Section 382(n) was a “rifle shot.” 

What Section 382(n) did was exempt from the provisions of the rest of the section one and only one taxpayer: General Motors, by that time known as “Government Motors,” a large chunk of which was owned by Uncle Sugar himself, but another large chunk of which was owned by the labor union which had donated millions of dollars in cash to the recent congressional and presidential candidates of a specific political party, and whose members had donated further millions upon millions of dollars of man-hours to canvassing for them (anyone want to bet whether any of those man-hours in fact showed up on someone’s time card as having been spent at work? anyone? Bueller? anyone?). The tax-forgiveness value to “New” GM of being able to use “Old” GM’s accumulated NOLs? Roughly $16 billion. That’s $16 billion that GM will be able to use, if and when it makes it. Ford won’t have that round in the magazine, nor will Toyota, Nissan, Volkswagen, BMW, or Mercedes.  All those corporations have U.S. based manufacturing subsidiaries, employ U.S. citizens. The only difference is that they’re not owned by a labor union and its bed-mates. 

What happened with the NOL rules between fall, 2008 and February, 2009 is wrong on so many levels it’s hard to keep them all straight in one’s head. The easy part is the sheer unfairness of it. How many companies haven’t been bought out in the last four years because their purchasers couldn’t use the accumulated NOLs? How many families are now on food stamps because the parents’ employers didn’t have the suck to get their very own Notice 2008-83 or Section 382(n)? How much wealth has simply been destroyed that might have been salvaged, even at pennies on the dollar? But now it’s gone. Hey!! At least our Tax Policy is once again pure, though. I can sleep at night, now, I suppose. 

The worse part is the transparent buying and selling not only of legislators – that’s been going on since, in round numbers, 1789 – but also of one of the statutes which forms the framework on which hangs the rest of our society and economy. Go as far back as you please in history and you’ll find oppressive, unfair tax laws as the tinder boxes which set societies alight. Preferential tax policy – from the latifundia enjoying tax benefits denied to the peasant farmer down the valley to aristocratic tax exemption to Established Churches owning enormous swathes of nations and paying no tax – has been at the core of every failed society, collapsed nation, vanished culture in Western civilization. 

Once a people begins engaging in tax corruption on this scale, a corner has been turned. It’s no longer unspeakable. Someone once asked Twain whether he “believed in infant baptism.” “Believe in it? I’ve seen it done!” was his response. When will the next batch of political contributors decide that (i) they’d like the government to hand them someone else’s company, and (ii) while they’re at it, they’d like to play by majorly distinct tax laws that give them a leg up on their fellows? 

Michael Barone I believe it was used the expression “gangster government” to describe how this administration does business. He’s right, of course; this troupe has proudly flaunted that it does business “the Chicago Way.” But the fact remains that the above squalid tale involves (i) a Republican treasury secretary; (ii) two Congresses, both dominated by Democrats; (iii) a lame-duck Republican administration; and, (iv) a new Democrat administration that has demonstrated nothing if not its commitment to reward – handsomely – its donors, and punish severely its “enemies.” 

We’ve seen it done, folks. In the phrasing of Billy Yank and Johnny Reb, who had been eager to see combat for the first time, we’ve “seen the elephant.” We’re likely to see him again. Who gets trampled next time? 

I am, by the way, more than just a bit indebted in the above to a Comment by Matthew Cline in The Tax Lawyer, Vol. 65 No. 2 (Winter 2012), “The Economics and Politics of Tax Loss Carryforwards in the Great Recession: Why GM Gets a $16 Billion Subsidy”. His analysis of the technicalities, history, and legal/theoretical framework of the story is excellent. I’d known of the existence of the GM “rifle shot” for some time, but had not been aware of the, shall we say? peculiarities of Notice 2008-83, and could not have written this post without large reliance on Mr. Cline’s heavy lifting.

Update (08 Oct 12):  This doesn’t exactly have to do with the Section 382 giveaway to the UAW GM, but it does have to do with what appears to be a very real risk of the entire bail-out flying apart.  It seems that Dear Leader’s administration and his car czar might have been less than entirely candid with the judge they duped into approving the deal.  And judges, no less than Mother Nature, don’t enjoy finding out they’ve been lied to.

 

“I Didn’t Knock Over That Liquor Store; I Was Busy Raping Someone Else”

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This just in, from the Dept. of You-Can’t-Make-This-Up:

Der Spiegel (English-language edition) carries a round-up of German editorial commentary on Turkey’s retaliation against Syria, and the Turkish parliament’s approval of military deployment onto Syrian territory.  What’s hilarious is this:  The evidence adduced in support of Syria’s claim (made at least to its buddy Russia) that the shelling against which Turkey has retaliated was a “tragic mistake,” runs something like this:  Of course it was all a tragic mistake; Assad’s too busy butchering his own people to have meant to shell some podunk town in Turkey.  Well, I guess that disposes of it, then.

But wait: Here’s a line from Die Welt:   “If it came to an all-out war, the Syrian army could also use chemical or biological weapons from its well-stocked arsenal.”  Wait a damned minute.  Syria doesn’t have the capacity to manufacture its own, which means it got them from somewhere.  That somewhere, by the way, was Iraq.  The weapons were shipped out just in advance of our 2003 invasion.

When the Only Tool You Have is a Hammer

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I guess everything does look like a nail to you.  Here we have Slate attributing a predicted (although by no means certain) Democrat presidential blow-out in Missouri to — wait! don’t get ahead of me here, folks — racism and religious bigotry. 

The Won running poorly in a heartland state just can’t, it just can’t have anything at all to do with four years of not doing what he said he was going to do, doing what he said he was not going to do, of hurling descriptions of them and their occupations that could easily be epithets lifted from some 1920s-era penny-ante socialist newsrag in Eastern Europe, of calling them bigots every time someone has the gall even to ask whether all this crap is really a good idea.  Having the NLRB try to shut down Boeing for daring to open a non-union shop won’t have impressed anything on anyone in the defense industries in Missouri.  His “you didn’t build that” snark will have had zip, zero, nada to do with his flagging popularity among a population that is proud of its “Show Me” attitude.  What, precisely, has OPromptr shown Missouri over the last four years?  He’s shown them a not-even-thinly-veiled contempt for them, their values, their country, and their livelihoods.  He’s superintended an economy that’s staggered under 8%+ unemployment continuously (that’s not unimportant) for more months than the previous eleven presidents experienced collectively, at any time during their tenures.  He’s told those unemployed people that “the private sector is doing fine.”  I have news for the navel-gazers at Slate:  Missouri is chock-full of people who remember the “clinging bitterly to their guns and religion” crack.  They hunt and they go to church, even the ones who live in the cities.  But not a bit of that has anything to do with his chances in 2012.

Let’s see: a guy who doesn’t match over 80% of the electorate still wins the state, notwithstanding some nut-job of a third-party candidate who siphons off four times OPromptr’s margin of victory.  Kewl.  But without that nut-job running the Democrats expect to lose that same state four years later, when the same people who statistically had to vote for the guy who didn’t look like them in order for him to win constitute a lower percentage of the electorate.  So obviously the only explanation can only be . . . racism!!!!

This clown has nothing left but the race card, the bigotry card. 
So he plays it over and over, until its edges are frayed and it’s worn so thin that even the blind can see through the paper.  Run on yer damned record, OPromptr, if you can.  But don’t have your cheerleaders call me a racist because I have the temerity to think you’ve done a lousy job and haven’t proffered anything other than a proposal to do more and more extreme of the same thing.