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Housing Bubble trouble – Playing Monopoly in Charm City…

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A piece I wrote two years ago sounds prescient now. I am posting it again today, because of the response I received about the Stormfront piece. I wonder if in an oblique way, the question I ask at the end doesn’t say more about where some of the anxieties on display about race and culture really have their root….

“June and downtown Baltimore is a few degrees cooler than the tropics but more stifling. There is greenery here but also more concrete and glass buildings, overheated asphalt, an endless twinkling stream of cars, and lightless parking lots. Not a bullock cart or rickshaw in sight to break the monotony.

Mornings, the sun beats down, late afternoon, a convectional shower or a muggy stillness. Near the water — sticky dimpled thighs, sticky floral shirts, and sticky wafer cones. The Harbor is all the rage. Again. We old timers remember the past and shake our heads. Not again. But the newcomers are believers. This time it’s different. This time — it’s for real.

Mencken’s tough old broad is moving on up. So they say, anyway.

“They” are quite a crew. Leading the cast — Streuver Bros., Eccles, and Rouse, fat from earlier gentrification schemes, now churning soil relentlessly wherever you look, like that sixty million dollar rehab of a shuttered Proctor and Gamble soap factory.

From Federal Hill on up, billboards announce the opening of glittering apartment complexes under the gritty eyes of the old ones. Everywhere, streets are cordoned off and the grind of bulldozers shatters the familiar buzz of traffic. Little Italy, Bayview, Locust Point, Butcher’s Hill, Brewer’s Hill, even Union Square, home of the old cynic, is back in fashion again.

“You want to buy where there’s building going on,” says Dave, nudging his gleaming white SUV around a grimy corner not too far from Druid Hill Park. Nearby, a couple of construction workers are swaying on a scaffold in front of the house, opposite a three-story brick row house with windows boarded up. Municipal notices are plastered like band-aids over the house fronts.

Dave is showing me a house on the outskirts of Reservoir Hill which is “hot, hot, hot,” according to the real estate web site where I first saw it. Dave is a broker officially, but actually, he tells me, he does this because it helps his own investing. He grew up in Baltimore and then spent ten years in California where he lived through the dotcom crash. Shortly after, he pulled his money out, clubbed together with some friends, and started buying property in San Francisco.

“Then I moved back here,” he smiles wolfishly. “It was dirt cheap compared to SF.”

But even the dirt is expensive now. The Housing Authority of Baltimore pimps burnt-out shells in drug-shadowed ghettos for a small fortune. A hundred grand gets you a dank, rotting hieroglyph, a skeleton with gouged out eyes and a deadline — two years and two hundred grand more in rehab work to be completed as specified. The city is getting tough with delinquent landlords, finally. All down St. Paul Street and Calvert, near the railway station, there are notices to repair… or else. Last time round, the city sold the boarded up homes to individual investors, but it didn’t work. One rehab wasn’t enough to pull up a block, so the little guys gave up and became absentee landlords. It wasn’t worth it to them. Then the drug gangs moved in and the middle class fled. This time around, the BHA has got wise. The houses are being offered in blocks to scare away the small fry and get in people who mean business. Eight shells on North Avenue in a package. A block near the Greenmount cemetery. Even the shadiest of neighborhoods have catchy little monikers — Sandtown, Old Goucher, Marble Hill.

And people are buying. Greenmount Avenue, once the bright line between the drug havens and respectable Baltimore, is now porous. It’s not just the city which is buying and improving housing stock either; Johns Hopkins University, bulging with massive donations, is throwing its turgid coils past Greenmount, pushing the drug line back. The Hospital area used to be a war zone. Today, North Broadway is another hot neighborhood, a future prospect for hospital employees. South, near the Bayview campus, modest row-houses are nearly two hundred thousand; further north, near the main campus, in what used to be the student ghetto of Charles Village, small row-houses are over 200, the bigger ones between 300 and 400 and on the main thoroughfare, Charles Street, half a million. Charles Village is no ghetto anymore. The old dormitories have been rebuilt stylishly, a Xando’s and Ruby Tuesday at the corner, dark green awnings plump and cool in the heat. Hopkins has cleared a flourishing corridor through the city, but elsewhere? Who knows.

There is no Xando’s on Druid Hill Drive for sure. Litter floats across the street. A surly looking man slumped on the steps of a house blows smoke out of the corner of his mouth and narrows his eyes at us. The SUV gleams temptingly. I give a nervous glance back. “Think it’ll be okay?” “Oh yeah,” says Dave. I wonder how many times he has been down this street to show the place. In the ad it was a graceful neglected marvel, painted a delicate teal with a decorative tin roof inside and five fireplaces. Reservoir Hill and the fringes were once the home of the great merchants of Baltimore, and their streets have some of the grandest and most ornamental architecture in the city. Flourishes of woodwork, imposing marble mantels and floors, elegant spiral staircases, swirling wrought-iron work. In the 20s, Gertrude Stein once lived in a mansion here. Then things changed. The residents became absentee landlords, the mansions were chopped up into apartment blocks, drugs took over, and the neighborhood fell into the shadows.

Until the last three years. Suddenly the poor cousin of Bolton Hill is selling for half a million.

Dave fumbles with the lock box and then pushes the door in. The place is dark and there is an overpowering smell of mold. He switches on his torch. “Watch your step.” The floors are crisscrossed with planks and the walls have been stripped down to the frame. The torchlight bounces off the wood and onto a black tendril of exposed wire. Through the fragment of a door, we can see what must be the kitchen area, although there are no appliances to prove it. The torchlight gestures toward the stairs and I follow. The contours of the stairs, still gracious, sweep us upward to the next floor.

“What do you think?” he asks as I look around at the torn walls, the gaping emptiness of the roof, the piles of plaster and rubble, the broken frames that lean menacingly toward us in the gloom.

“I know it looks like a lot of work now, but seriously, you could do it for maybe, eighty, ninety.”

A hundred plus ninety.

“Across the street is selling for two fifty,” he adds. How long would it take? “Three — four months.” He shrugs. “Maybe faster. Depends on who you know.”

Who I know.

I know Ralph, the handyman at my old condo. But Ralph is retired and likes to sleep in or play b-ball with his grandson. I wasn’t certain he was the right person to turn me a profit on a broken down mansion in Druid Hill.

And if it took longer? “Then you just sell it next spring.” That wolf smile again.

Next spring? The bottom might drop out of this thing by then.

“Don’t you think we might be in a bit of a bubble here?” I asked, as we gingerly picked our way through the debris and climbed down the stairs back to the front door. Outside, the sun was still beating down. “Naah. Way too much demand. This stuff goes on the market and it’s gone in days. Too many people around now.”

If so, they weren’t in Druid Hill. The smoker had left leaving his smoke hanging like a Cheshire smile in the hot air.

“People from DC, you mean?” Everyone was talking about them. That’s why the area around the train station was so hot suddenly. A few years back, you would have risked being shot if you’d been out there in the night. Now, someone had bought up even that raggedy old Chesapeake restaurant, fixed it up, and was trying to sell it. People were talking of trendy cafes and artsy shops. A place to eat after the theater. Night life. Station North, they called it now. And even four streets away, past the drug line of Greenmount, houses were selling steadily in Greenmount West.

Live Baltimore, the housing campaign, has signs all over Union Station in DC about it. Pictures of a solitary potted plant and the caption, “If you call this a yard, you need to get out of DC.” Designed by a Baltimore ad agency, the Campbell Group, Live Baltimore has been selling the idea to Washingtonians of all stripes but especially mid-level managers, administrators, librarians, people who work in DC but don’t make the big salaries that the law firms and businesses pay. A townhouse that would cost a million in DC is “only” half a million here. And with Penn Station connected at the umbilicus by the speedy little MARC train, Baltimore is now a DC suburb. Or so they say.

Too bad they forget to mention that the half-a-million dollar mansion is only a street or two away from an open-air market for drugs. Or that Patterson Park, now selling for a quarter of a million, used to be a row of flophouses. Or that the drug problem isn’t going anywhere soon. Or the school problem. Or the jobs problem. Or the race problem.

The Baltimore problem.

We got into the SUV. “Look — there’s always a risk,” he said, pulling out into the street. “Nothing’s guaranteed in life. But you can see this is for real. Everyone wants in on this. It’s not coming down anytime soon. Maybe never.”

“Didn’t they said that about the tech stocks too?”

He shook his head. “You really are pessimistic, y’know? A home isn’t a piece of paper. There’s value there. The people who saw that value and bought in five years ago, they had the vision.”

Five, ten, fifteen years ago, those Druid Hill houses couldn’t be given away. And the landlords boarded up the windows and let them sit vacant for years, eyesores that destroyed the neighborhood. I knew an artist who fell in love with one of those beautiful ruined ghosts and sunk his savings trying to breath life back into it. After ten years of smashed windowpanes, broken steering wheels, reefers and condoms tossed into his yard, he gave up, sold for a loss, and went to France. He had vision. I wondered what he was thinking now.

“You better buy now,” said Dave, as we swung back onto North Avenue. “Look at the construction.” He was right. Right across from Penn Station, land had been cordoned off for condominiums. “Station North Town homes,” said the sign. “Starting in the two hundreds.” They’d probably all been sold and sold again, though there was not yet a brick in place. That fast commute to DC was going to lure a whole new population into the city and landlords were ready for them. Yuppie analysts driven out of New York by the prices. Californian dotcom couples hardened by million-dollar sticker tags for modest bungalows. Baltimore looked cheap to them. Baltimore was cheap for them. They weren’t making Baltimore salaries. After 9/11, the federal government began hiring with a vengeance — computer analysts, accountants, engineers. In DC’s bedroom communities, in Virginia and Maryland, recession never hit. The defense giants, Northrop, Lockheed, Boeing, and the newcomers, Titan, CACI, began hiring as though their lives depended on it — which in a way they did — and the money was great.

The money is still great. You only have to skim the Washington Post’s online ads to realize where all the housing money is coming from. Bush has created the biggest government program since FDR.

And it’s all going to the middle-class and upper middle-class who want to put it someplace where it will grow, not crash and burn like the stock market. More and more money looking for a safe hideout. And what’s safer than land? What’s easier to understand? The primal urge to own your own dirt, to put a roof over your head. Land’s the only thing that lasts, Katy Scarlett….

Dave handed me a card. A mortgage banker. “She’s good,” he says confidentially. “Someone who’ll give you a fair deal. Not just looking for a commission.”

Were there any fair deals left? The real estate web sites consider Baltimore “fair value” now, not overvalued but not undervalued anymore, either. But the old-timers aren’t so certain. They’ve lived through the winds of gentrification twice before and each time things have sunk back. Of course, there’s more money coming in now — from the federal government, from private developers, from the city. But if you look closer, you begin to wonder.

SCOPE, the city program offering rehab properties, sounds like a public-spirited effort — Selling City Owned Properties Efficiently. What could be wrong with that? But what the efficient part only hints at is the raw truth that the city makes a profit when it sells those properties through the commercial agents. The city makes money; the realtors who get to broker the deal make money. But the homeowners who buy and then put in the mandated hundred or two hundred thousand dollars worth of work are spending money and spending it on spec., because there’s no guarantee that prices are going to keep going up, although that’s the chorus from everyone — the banks, the realtors, the mortgage brokers, the newspapers. And if prices fall 5%, or god forbid 20%, as they did after the last few spasms of gentrification, what happens to that two or three hundred grand you owe on a gutted shell that no one can live in but on which you still have to pay mortgage and taxes?

Shells for a shell game….

The greater fool theory is in full throttle. People trying to buy and sell before they get left holding the bag. With New York Times bestsellers salivating over an impending real estate crash, the hot potato jumps from hand to hand quicker and quicker, buyers flipping before the ink gets cold on the deal. And they’re making money. Baltimore properties are up on average around 20% a year over the last few years.

“I wouldn’t want to put much money down,” I say hesitantly. Not to worry, I didn’t need any money down, it seemed. 100% financing — hadn’t I heard of it?

Apparently anyone with a pulse can get a loan. Appraisers boost house values — appraisal fraud is at an all-time high — but it keeps everyone happy; the banks make loans based on the inflated values knowing that the loans aren’t any good, only it doesn’t matter because they’re going to get sold off in packages as securities; the buyers borrow money they don’t plan to return because they’re going to turn a quick profit by selling fast; the investors — many of them foreign — buy the packaged securities because with the dollar falling American real estate looks cheap.

An elaborate, delicate house of cards teetering on disaster.

“I don’t have much of a credit history,” I falter. His eyes shift away. “But I do have savings.” They brighten.

In this intricate leveraged game, cash — real hard cash — is in short supply in America, even though, ironically, it’s an excess of liquidity in international markets that’s driving the assets boom at home.

“That helps,” he says. “The more you can put down, the more house you can buy.”

But how much house do I want to buy? A single woman, I don’t really need a house, but if rents go the way prices are going, I might soon be as priced out of the rental market as I am out of the housing market. A house isn’t a home to me, really, but a hedged bet on the market. Commodities are not something a novice can easily get into, and aren’t commodities taking a beating this quarter anyway? Gold has been up for some time, but might be on its way down. Your average savings account isn’t paying more than three percent. Bonds — too much complicated math. Short of buying jewelry or stuffing the mattress, land’s the answer.

So, how much land does a man need? Tolstoy once asked the question and answered it. Six feet. Enough to die in.

But the American mortgage industry has no use for parsimonious solutions, however elegant. Six feet of house will not get them interested in you. You have to borrow beyond a certain amount, and in most cases you’ll be slapped with a penalty if you pay back too early. Seems like they need to make the loan more than you need to borrow the money.

Having savings doesn’t help either. They don’t want to know you have the money to pay them back. They’d rather have proof that you’re used to the drip-drip of intravenous credit. They want you brain-dead and hooked up to their monthly payments. They need you playing their lethal little game. They need you to be one more sweaty little Sisyphus, shoulder to the rock.

And with the dollar plummeting, you don’t know how not to be. If you don’t buy, you risk being left behind as prices thunder away, pulverizing your savings into the dust. If you buy at these inflated prices, you know you’ve gifted over a chunk of your savings to someone who bought before 1999 and you’d be doing it just when the market has probably topped out and is ready to fall. To those who have, more will be given; to those who lack, what little they have will also be taken away. So says the Gospel somewhere, and the Bush government is working overtime to prove it. In fact, the current housing boom is the biggest re-distributor of wealth since the New Deal, only this time it’s from those who haven’t homes to those who have.

Not that many homeowners, unless they’re ready to retire, can directly cash in their inflated assets by selling. For a conservative minority, the housing boom has only meant another reason for the city to raise property taxes, forcing some of those on fixed incomes out of their overpriced digs. But for the vast majority of homeowners, the new boom has turned their homes into an ATM card through refinancing and home equity loans that allow them to tap the appreciation for new credit. And the creditors are lining up to give the junkies their fix.

It’s predatory banking and it’s no different from what sleazy credit card companies do when they mass-mail plastic purchasing to penniless immigrants, students in debt, grandmas on fixed incomes, the struggling poor, and those on the verge of bankruptcy. They want you to go under. And when you do, they want to be there to collect.

Loan sharking of the worst kind. But at least you could easily pick out the old-time loan sharks. They were the polyester-suited, gold-chained hustlers on the corner, charging you 20 percent as they forked over a billfold with their greasy pinkie-ringed paws. But today’s loan shark is camouflaged as your neighborhood banker in wire-rimmed glasses and button-down shirt, ready at your elbow with a no-money down, 100% financed, adjustable rate mortgage under 4%. There’s even negative amortization. That’s right. They’re willing to pay you to borrow money. Your monthly payment is kept artificially low because not only are you not paying the principal you borrowed, you’re not even fully paying the interest. So the amount you’re borrowing actually keeps rising. And the more interest rates rise, the bigger that amount becomes until at some point the bank decides to pull the cozy rug from under your feet and your monthly payment skyrockets to cover both P and I. That’s when all those $30,000 wage-earners brandishing $300,000 plus homes bite the dust. All over the country, it’s already beginning. Foreclosures are up dramatically this year. In Allegheny County in Pennsylvania, officials talk about a Depression era level. If it hasn’t brought prices down any, it’s only because these days the banks are holding back and selling through the realtors not just to recoup costs, but at profit-making prices. It’s only because at swanky auction houses like Alex Cooper in Baltimore, properties that go to auction are frantically bid up by greedy speculators and their shills who want to keep the game going.

But somebody knows what everybody pretends they don’t — that someday this is all coming down. Otherwise, why have so many realtors sold their homes and begun to rent? Why have the bankruptcy laws been tightened up effective from October this year just as interest rates start the slow but inexorable climb that will make defaults cascade into an avalanche?

“You’ve got to believe,” says Dave, watching me finger the card slowly before I put it in my wallet. “This city is only going to get better.” He opens the door and I slide out. He smiles, the little sunbursts on his green and yellow shirt smile, even the SUV, opulently, extravagantly energy-inefficient, smiles. I feel the spoilsport I am.

I think suddenly about how the stock market “crashed” and nothing really changed — not so many jobs maybe, but no bread lines or gas lines, people still spending and living as they’ve always done. I think about all the doomsday predictions before the war, and yes, it’s a mess but the Middle East didn’t implode, nuclear war hasn’t broken out. I think about the dollar bears and how, this spring, the Euro has fallen instead. America acts and the world falls in line… for the most part, anyway. A Chavez here, a Kim Il there, a little grumbling, but no more. I remember someone saying, it doesn’t pay to bet against America. I wonder with a sinking feeling if I’ve been wrong all along.

Dave shouts out, “You’ll see!”

Then, just for a second, I do see. How it works, what it lives on, this country of perpetual optimism. As he waves to me from the car, he looks suddenly boyish, quintessentially American, puer aeternus despite the first bulge of middle age.

And it’s I who feels old suddenly and somehow cheated. Not because I didn’t buy a house four years ago, but because having grown up in the third world, in an old culture, I’ve never bought and could never buy what seems to ultimately drive this country and fuel its endless consumption, its bountiful credit — I’ve never made a down payment on that relentless waking dream in which it sleepwalks toward the future, the brittle dream that tomorrow is always better than today….”

Lila Rajiva, “Playing Monopoly in Charm City,” Dissident Voice

 

 

 

 

 

 

Globalization in India: Commie- Corporate kiss-up

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“In case of the Communists, it is not electoral but ideological defeat, indeed ideological annihilation, that their leaders have led them into. When was the last time we heard our Communist leaders extolling Marx, Engels, Lenin, Stalin, Mao, Zhou or even Fidel Castro? Not for a long time. The bankruptcy of official communism is obvious even to them, at least in their candid moments in front of the mirror every morning. Even for the CPI and CPI(M) to merge into a genuine modern socialist party is too creative and productive an outcome to be handled since top and middle management retrenchments would be inevitable. Also, the Cannot-Leave-Nice-Housing-Effect applies here too, and so the most we find by way of communist transformation is a perverse alliance with organised big business in trying to cheat very poor and unorganised peasants of their land in an economy where runaway paper money printing threatens a hyperinflation.

Nobody in power wants to address the rotten state of our public finances, since all of them have contributed to causing the stench. Our Finance Minister finds time to attend posh parties and publish books while presiding over an RBI-supported capital flight of India’s super-rich: “ultrahigh networth individuals are looking forward to buy overseas equities and real estate” Business Standard (25 April 2007) blithely said. The Finance Minister should have been instead burning the midnight candle getting public budgets and government accounting cleaned and healthy nationwide.

We in India have had more than enough time and democratic experience to have developed by now a set of normal conservative, liberal democrat, social democrat and socialist parties. That we have nothing of the kind speaks to the rot in the political culture we are witnessing in our capital and other major cities. Politically, we may be in for an especially ugly, unpleasant and incoherent few years starting with the presidential election currently underway.”

From the Independent Indian.

(Dr. Subroto Roy is Contributing Editor, The Statesman.)

And more:

“Cleaning up public budgets and accounts would pari passu stop corruption in its tracks, as well as release resources for valuable public goods and services. A beginning may be made by, for example, tripling the resources every year for three years that are allocated to the Judiciary, School Education and Basic Health, subject to tight systems of performance-audit. Institutions for improved political and administrative decision-making are necessary throughout the country if public preferences with respect to raising and allocating common resources are to be elicited and then translated into actual delivery of public goods and services.

This means inter alia that our often dysfunctional Parliament and State Legislatures have to be inspired by political statesmen (if any such may be found to be encouraged or engendered) to do at least a little of what they have been supposed to be doing. If the Legislative Branch and the Executive it elects are to lead this country, performance-audit will have to begin with them.

The result of healthy public budgets and accounts, and an economy with functioning public goods and services, would be a macroeconomic condition for the paper-rupee to once more become a money that is as good as gold, namely, a convertible world currency again after having suffered sixty years of abuse via endless deficit finance at the hands of first the British and then numerous Governments of free India that have followed.

It may be noticed the domestic aspects of such an agenda oppose almost everything the present Sonia-Manmohan Congress and Jyoti Basu “Left” stand for — whose “politically correct” thoughts and deeds have ruined India’s money and public budgets, bloated India’s Government especially the bureaucracy and the military, starved the Judiciary and damaged the Rule of Law, and gone about overturning Family Values. While there has been endless talk from them about being “pro-poor”, the actual results of their politicization of India’s economy are available to be seen with the naked eye everywhere.

One hundred years from now if our souls returned to visit the areas known today as India, Pakistan, Bangladesh etc, we may well find 500+ million inhabitants still below the same poverty-line despite all the gaseous prime ministerial or governmental rhetoric today and projections about alleged growth-rates.

If the Congress and “Left” must oppose any real “classical liberal” or conservative agenda, we may ask if the BJP-RSS could be conceivably for it. The answer is clearly not. The BJP-RSS may pontificate much about being patriotic to the motherland and about past real or imagined glories of Indian culture and religion, but that hardly ever has translated concretely into anything besides anti-Muslim or anti-Christian rhetoric, or breeding superstitions like astrology even at supposedly top technological institutes in the country….”

 

Amartya Sen on the Clash of Civilizations

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“People see themselves—and have reason to see themselves—in many different ways. For example, a Bangladeshi Muslim is not only a Muslim but also a Bengali and a Bangladeshi, typically quite proud of the Bengali language, literature, and music, not to mention the other identities he or she may have connected with class, gender, occupation, politics, aesthetic taste, and so on. Bangladesh’s separation from Pakistan was not based on religion at all, since a Muslim identity was shared by the bulk of the population in the two wings of undivided Pakistan. The separatist issues related to language, literature, and politics.

Similarly, there is no empirical reason at all why champions of the Muslim past, or for that matter of the Arab heritage, have to concentrate specifically on religious beliefs only and not also on science and mathematics, to which Arab and Muslim societies have contributed so much, and which can also be part of a Muslim or an Arab identity. Despite the importance of this heritage, crude classifications have tended to put science and mathematics in the basket of “Western science,” leaving other people to mine their pride in religious depths. If the disaffected Arab activist today can take pride only in the purity of Islam, rather than in the many-sided richness of Arab history, the unique prioritization of religion, shared by warriors on both sides, plays a major part in incarcerating people within the enclosure of a singular identity.

Even the frantic Western search for “the moderate Muslim” confounds moderation in political beliefs with moderateness of religious faith. A person can have strong religious faith—Islamic or any other—along with tolerant politics. Emperor Saladin, who fought valiantly for Islam in the Crusades in the 12th century, could offer, without any contradiction, an honored place in his Egyptian royal court to Maimonides as that distinguished Jewish philosopher fled an intolerant Europe. When, at the turn of the 16th century, the heretic Giordano Bruno was burned at the stake in Campo dei Fiori in Rome, the Great Mughal emperor Akbar (who was born a Muslim and died a Muslim) had just finished, in Agra, his large project of legally codifying minority rights, including religious freedom for all….”

The point that needs particular attention is that while Akbar was free to pursue his liberal politics without ceasing to be a Muslim, that liberality was in no way ordained—nor of course prohibited—by Islam. Another Mughal emperor, Aurangzeb, could deny minority rights and persecute non-Muslims without, for that reason, failing to be a Muslim, in exactly the same way that Akbar did not terminate being a Muslim because of his tolerantly pluralist politics…”

More at Slate.

Police State files: all we need is a trigger

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David Lindorff at Common Dreams:

Meanwhile, last October Bush and Cheney, with the help of a compliant Congress, put in place some key elements needed for a military putsch. There was the overturning of the venerable Posse Comitatus Act of 1878, which barred the use of active duty military inside the United States for police-type functions, and the revision of the Insurrection Act, so as to empower the president to take control of National Guard units in the 50 states even over the objections of the governors of those states.

  1. Put this together with the wholly secret construction now under way–courtesy of a $385-million grant by the US Army Corps of Engineers to Halliburton subsidiary KBR Inc–of detention camps reportedly capable of confining as many as 400,000 people, and a recent report that the Pentagon has a document, dated June 1, 2007, classified Top Secret, which declares there to be a developing ³insurgency² within the U.S, and which lays out a whole martial law counterinsurgency campaign against legal dissent, and you have all the ingredients for a military takeover of the United States.”

Stephen La Tulippe at Lew Rockwell tells us just how far the current oligarchy is prepared to go in defense of its interests in “Ron Paul and the Empire”:

“This is not a democracy, and certainly not a constitutional republic. America is actually a carefully concealed oligarchy. A few thousand people, mostly in government, finance, and the military-industrial complex, run this country for their own purposes. By manipulating the two-party system, influencing the mainstream media, and controlling the flow of campaign finance money, this oligarchy works to secure the nomination of its preferred candidates (Democratic and Republican alike), thus giving voters a “choice” between Puppet A and Marionette B.

Unlike the establishment’s candidates, Ron Paul is a freelancer running on three specific ideas:

1. The federal government must function within the strict guidelines of the Constitution.

2. America should deconstruct its empire, withdraw our troops from around the world and reestablish a foreign policy based on noninterventionism.

3. America should abolish the Federal Reserve Bank, eliminate fiat currency and return to hard money.

This is not a political agenda. This is not a party platform. It is a revolution. The entire ruling oligarchy would be swept away if these ideas were ever implemented. Every sentence, every word, every jot and tittle of this agenda is unacceptable, repellent and hateful to America’s ruling elite.

The reasons for this are fairly obvious.

Through its control of the Federal Reserve, the banking elites make billions of dollars in unearned profits and exert enormous influence over the American economy. Countless industries and special interest groups (both foreign and domestic) have sprung up around our defense and national security budgets. The bureaucratic elites who dominate the federal government despise the Constitution’s limitations on their power and view the document as just an archaic “piece of paper.”

Anyone who believes these folks will simply “walk away” if Ron Paul is elected president obviously doesn’t understand with whom they are dealing.”

Immigration: how Stormfront is saving the Tibetans…

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“A man who has lectured on race politics for four decades with the passion of a tent-revival preacher isn’t likely to run from critics. Recalling the bumper sticker he’d seen as he entered, Dickson told the people who perked up at the Sevananda confrontation, “You want to save Tibet. I’m in agreement.”

Dickson took the opportunity to compare Tibet – which the communist Chinese government has flooded with non-Tibetans – and America. “I told those who attacked me that the people of Milton and Shakespeare have a right to save themselves, just like what they advocate for Tibet. They were furious at the idea of someone arguing that white people should try to avoid extinction. Which is what is happening.”

Dickson’s message hasn’t changed much since he was a University of Georgia activist with the right-wing Young Americans for Freedom in the late 1960s: The white race must unite to save itself.

But technology has transformed racial politics just as it has the rest of our culture. Today Dickson’s soapbox is no longer confined to small rooms where he addresses handfuls of fellow travelers. His message is amplified and shoots around the planet at light speed, thanks to Stormfront.org, the online bulletin board whose booming growth delights white nationalists and causes anguish among their enemies….”

More at “A kinder, gentler racism,” John Sugg at CreativeLoafing.com

What differentiates a racialist from a racist?

1. A racialist acknowledges the existence of race, racial differences, and the influence of feelings of racial solidarity. He/she might take race into consideration in formulating policies.

Racialists take into account cultural and economic factors in the forming of civilizations/societies.

Racialists do not deny or denigrate commonly acknowledged and subtantiated historical or factual evidence. The do not advocate harm to other races either directly or indirectly.

2. A racist goes beyond acknowledging differences, and makes judgments about inferiority and superiority and worth/value as a whole. Racists commonly find answers to societal problems primarily in terms of genetics and biology. They tend to be deterministic even in that understanding. They may actively propagandize against intermarriage between races. [correction: I think that’s a little broad. You might inveigh against intermarriage and still be a racialist. However, actively penalizing group members would make you a racist]. Their studies are usually confined to scholarship and reports produced by people of their same racial group. They show an inability to weigh alternative arguments or interpretation seriously. They rarely have extensive life experience or interaction with people of a different race….

This is something I haven’t finished thinking through..

And I am going to expand this post over the next two days to include pieces on Asian, Black, Hispanic racism, as well as Zionism …I am curious to see what the comparison might yield and whether the sharp rise in Stormfront’s membership is paralleled in the other groups. (Make that two weeks…)
Is this an off-shoot of immigration policies, the Internet, economic problems, crime….or some combination thereof..?

Libertarian Economics – Eric Bonabeau on swarm intelligence

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An interview with Eric Bonabeau on emergent swarm technologies:

“In social insects, errors and randomness are not “bugs”; rather, they contribute very strongly to their success by enabling them to discover and explore in addition to exploiting. Self-organization feeds itself upon errors to provide the colony with flexibility (the colony can adapt to a changing environment) and robustness (even when one or more individuals fail, the group can still perform its tasks).

With self-organization, the behavior of the group is often unpredictable, emerging from the collective interactions of all of the individuals. The simple rules by which individuals interact can generate complex group behavior. Indeed, the emergence of such collective behavior out of simple rules is one the great lessons of swarm intelligence.

This is obviously a very different mindset from the prevailing approach to software development and to managing vast amounts of information: no central control, errors are good, flexibility, robustness (or self-repair). The big issue is this: if I am letting a decentralized, self-organizing system take over, say, my computer network, how should I program the individual virtual ants so that the network behaves appropriately at the system-wide level?”

Comment:

As usual social and economic theory are way behind science and technology. But then, they don’t have the DC monolith getting in their way…

Rothbard on the real history of liberty

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In his essay “Left and Right: The Prospects for Liberty,” Rothbard describes the “Old Order”:

The myth held that the growth of absolute monarchies and of mercantilism in the early modern era was necessary for the development of capitalism, since these served to liberate the merchants and the people from local feudal restrictions. In actuality, this was not at all the case; the king and his nation-State served rather as a super-feudal overlord reimposing and reinforcing feudalism just as it was being dissolved by the peaceful growth of the market economy. The king superimposed his own restrictions and monopoly privileges onto those of the feudal regime. The absolute monarchs were the Old Order writ large and made even more despotic than before.

And about the incestuous love of the state and mercantilism by both right and left:

”  Historians have long recognized the affinity, and the welding together, of right-wing socialism with conservatism in Italy and Germany, where the fusion was embodied first in Bismarckism and then in fascism and national socialism – the latter fulfilling the Conservative program of nationalism, imperialism, militarism, theocracy, and a right-wing collectivism that retained and even cemented the rule of the old privileged classes. But only recently have historians begun to realize that a similar pattern occurred in England and the United States. Thus, Bernard Semmel, in his brilliant history of the social-imperialist movement in England at the turn of the twentieth century, shows how the Fabian Society welcomed the rise of the imperialists in England. [6] When, in the mid-1890s, the Liberal Party in England split into the radicals on the left and the liberal-imperialists on the right, Beatrice Webb, co-leader of the Fabians, denounced the radicals as “laissez-faire and anti-imperialists,” while hailing the latter as “collectivists and imperialists.” An official Fabian manifesto, Fabianism and the Empire (1900), drawn up by George Bernard Shaw (who was later, with perfect consistency, to praise the domestic policies of Stalin and Mussolini and Sir Oswald Mosley), lauded imperialism and attacked the radicals, who “still cling to the fixed-frontier ideals of individualist republicanism (and) noninterference.” In contrast, “a Great Power . . . must govern (a world empire) in the interests of civilization as a whole.” After this, the Fabians collaborated closely with Tories and liberal-imperialists. Indeed, in late 1902, Sidney and Beatrice Webb established a small, secret group of brain-trusters, called The Coefficients……

Other members of The Coefficients, who, as Amery wrote, were to function as “Brain Trusts or General Staff” for the movement, were: the liberal-imperialist Richard B. Haldane; the geopolitician Halford J. Mackinder; the Imperialist and Germanophobe Leopold Maxse, publisher of the National Review; the Tory socialist and imperialist Viscount Milner; the naval imperialist Carlyon Bellairs; the famous journalist J. L. Garvin; Bernard Shaw; Sir Clinton Dawkins, partner of the Morgan Bank; and Sir Edward Grey, who, at a meeting of the club first adumbrated the policy of Entente with France and Russia that was to eventuate in World War I. [8]

The famous betrayal during World War I of the old ideals of revolutionary pacifism by the European Socialists, and even by the Marxists, should have come as no surprise; that each Socialist Party supported its “own” national government in the war (with the honorable exception of Eugene Victor Debs’s Socialist Party in the United States) was the final embodiment of the collapse of the classic Socialist Left. From then on, Socialists and quasi-Socialists joined Conservatives in a basic amalgam, accepting the state and the mixed economy (= neo-mercantilism = the welfare state = interventionism = state monopoly capitalism, merely synonyms for the same essential reality)…..”

And in an essay on Rothbard at LRC, Ryan McMaken shows how Rothbard broke away from the convenient linear history of the state’s triumphal march upward:

“In spite of his long-range optimism, however, Rothbard was always one to emphasize that history is in no way linear. In the High Middle Ages, the fledgling bourgeoisie might have thought that the benefits of free trade and weak States might have lasted forever. But Absolutism and “Enlightenment” intervened. The liberals of the 19th century might have thought similar thoughts. The disaster of the 20th century certainly put an end to that as well. Today, we are left wondering if the 21st century will be more like the 20th or the 19th. It is still too early to tell, but the problem for defenders of liberty is the same today as it has always been. The choice is between the State and liberty; between a free economy and a controlled economy; between peace and war. The myth that modern kings, and democracies, and armies of freedom secure the blessings of liberty for all has been an obstacle to real liberty for centuries. The real history of the State is one of power, war, and domination. Real freedom has advanced in great salvos against the State from political revolutions and from industrial and technological ones. In spite of the 20th century, and the seemingly insurmountable obstacles the State continues to pose against the cause of liberty, freedom has nevertheless erupted at the most unexpected times. Rothbard, knowing the resilience of liberty through the centuries, undoubtedly agreed with Thomas Paine that although “the flame of liberty may sometimes cease to shine, the coal can never expire.”

IQ and wealth…

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Genetics helps; it’s not dispositive:

“Yes, smarter people make more than someone with an average IQ. But they pretty much end up with the same amount of money.

By Karen Aho

You don’t have to be a genius to manage your money.

That’s the take from a new study of intelligence and wealth, which looked at thousands of baby boomers and found that those with average and low IQs were just as good at saving money as those with high IQs. At the same time, smart people were just about as likely to run into credit problems.

“If I were a person with low intelligence, I shouldn’t believe that I’m handicapped in any way, shape or form in achieving wealth,” said the study’s author, Jay Zagorsky, a research scientist at Ohio State University’s Center for Human Resource Research. “Conversely, if I’m sort of high intelligence, I shouldn’t believe I have any kind of special advantage.

“I don’t care what your IQ is — you can do well.”

More at MSN Money.

Comment:

And you don’t need to earn a lot, to keep a lot or become an financially independent. I know people with $200,000 incomes who are broke or worse. Can’t say I feel too sorry, unless they were sick. And I know people who make under $25,000 who own their own homes, have stock investments, no debt and live reasonably well. Some of this is up to individual self-discipline and the ability to make sensible choices.

That said, it doesn’t help when the financial and professional classes (bankers, accountants, CPA’s, lawyers) abandon professional ethics and set out to snooker people…

Mark Twain: the Belgian empire in the Congo…

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Apropos some earlier comments from a reader on the Congo and how the best thing that ever happened to it was the Belgian empire (since the Belgians suppressed Congolese cannibalism):

Here’s Mark Twain in an interview in 1905:

(And that should put a dent in the idea that liking Western culture means you have to endorse imperialism)

“Leopold is too well known as a domestic person, as a family person,” said Mark Twain, facetiously, “as a king and a pirate, to believe what he says. He sits at home and drinks blood. His testimony is no good. The missionaries are to be believed. I have seen photographs of the natives with their hands cut off because the did not bring in the requited amount of rubber. If Leopold had only killed them outright it would not be so bad; but to cut off their hands and leave them helpless to die in misery–that is not forgivable.

“We’re interested in all this because we were the first country to give recognition to Leopold’s villainous Congo Free State in 1885.”

Mr. Clemens commented on some of the brutalities perpetrated by other nations on the natives of Africa and cited the Matabele war, in which the English massacred so many thousands of the Matabeles….”

And now some details about Leopold of the Congo:

 

King Léopold II of Belgium

KING LÉOPOLD II OF BELGIUM

Country: Congo Free State (present-day Democratic Republic of Congo) and Belgium.

Kill tally: Five to 15 million Congolese (the indigenous inhabitants of the Congo River basin).

Background: The Portuguese navigator Diogo Cao reaches the Congo River in 1483. Commerce between the coastal Kongo Kingdom and Portugal quickly develops, with the trade in slaves soon coming to dominate all other exchanges. The Dutch begin to arrive in the 17th Century, to be followed by the French and British. As the influence of the Europeans steadily moves inland, the Congo River basin is raised in the imagination of the West, with the exploits of 19th Century explorers such as David Livingstone receiving wide publicity. More background.

Leopold Bio: Born on 9 April 1835 in Brussels, the capital of Belgium. He is the eldest son of Léopold I, first king of the Belgians. His full name is Léopold Louis Philippe Marie Victor.

Excerpts:

… Léopold continues to advocate his long-held belief that Belgium should become a colonial power. “I believe that the moment is come for us to extend our territories. I think that we must lose no time, under penalty of seeing the few remaining good positions seized upon by more enterprising nations than our own,” he says in 1860.

Over the next 20 years Léopold lobbies the Belgium Parliament to get a colony “in our turn.”

1876 – Léopold sponsors an international geographical conference in Brussels where he proposes the establishment of an international benevolent committee for the “propagation of civilisation among the peoples of the Congo region by means of scientific exploration, legal trade and war against the ‘Arabic’ slave traders.”

“To open to civilisation the only part of our globe which it has not yet penetrated, to pierce the darkness which hangs over entire peoples, is, I dare say, a crusade worthy of this century of progress,” Léopold says at the conference.

“I’m sure if I quite openly charged Stanley with the task of taking possession in my name of some part of Africa, the English will stop me,” Léopold says. “So I think I’ll just give Stanley some job of exploration which would offend no one, and will give us the bases and headquarters which we can take over later on.”**Léopold also tells Stanley, “It is a question of creating a new state, as big as possible, and of running it. It is clearly understood that in this project there is no question of granting the slightest political power to the Negroes. That would be absurd.”

**Over the next 23 years Léopold will amass a huge personal fortune by exploiting the Congo directly and by leasing concessions to private companies prepared to pay him 50% of their profits. The period will witness some of the worst atrocities ever committed on the African continent. However, Léopold will never visit the region, ruling instead by decree from Belgium.

***Ostensibly formed to put down the slave trade, the Force Publique, will quickly be turned on the Congolese.

***The Congolese will be systematically exploited and abused. Their forced labour will build the colony’s infrastructure, transport rubber and ivory from the interior to the river ports, and produce all the territory’s food. At the same time, they will be required to pay taxes to the state (a ‘provisions tax’ and a ‘rubber tax’). However, the remuneration they receive is completely arbitrary and inadequate and little of the revenue from the taxes is reinvested in the state.

***The Congolese are only allowed to trade with approved agents. To ensure that the maximum is squeezed out of each sector, the salaries of the agents are set at a bare minimum, with the bulk of their income coming from a commission on the rubber and ivory they supply. The agents in turn hire and arm African mercenaries, the so-called ‘Capitas’, to force the Congolese under their jurisdiction to work. Communities who refuse to be intimidated or who retaliate are brought into line by military “expeditions”.
**The general act ratified by the conference includes an article binding the signatories to “support and, if necessary, to serve as a refuge for the native populations; … to diminish intertribal wars by means of arbitration; … to raise them by civilisation and bring about the extinction of barbarous customs, such as cannibalism and human sacrifices; and, in giving aid to commercial enterprises, to watch over their legality, controlling especially the contracts for service entered into with natives.”

1891 – The price of rubber begins to increase following the invention of the inflatable rubber tire. The agents and concession holders exploiting the Congo’s wild rubber vines now stand to make enormous profits, with returns of up to 700% per year being reported.

To cash in on the opportunity, the Congolese labourers are squeezed further still. Local chiefs are required to supply men to collect the so-called ‘rubber tax’, with wives and children being held hostage and chiefs imprisoned until the men return with their quotas. The amount of rubber needed to meet the tax requires the men to work for up 25 days each month harvesting the wild rubber vines in the Congo forests. Failure to supply the quotas results in floggings, torture, and death.

**Resistance to Léopold’s rule again mounts and is again crushed, with local chiefs organising many uprisings. The Babua tribes revolt in 1903, 1904, and 1910, and the Budja in 1903 and 1905. In 1895 and 1897 the Force Publique mutinies.At its peak, the Force Publique numbers about 19,000 African conscripts, led by about 420 European officers. The force commits many atrocities to terrorise the Congolese into complying with Léopold’s ever-increasing demands. Villages are burned, and men, women and children are indiscriminately slaughtered or forced into slavery.

**To prove the success of their patrols, Force Publique soldiers are ordered to cut off and bring back a dead victim’s right hand for every bullet fired. The soldiers resort to cutting off the hands of the living to ensure that the number of spent cartridges tallies with the number of preserved hands. They are also reported to engage in cannibalism.

The headquarters of Force Publique leader Leon Rom exemplifies the gruesome nature of the regime. The fence surrounding Rom’s office bears a severed native head on each slat, and the garden contains a rockery full of rotting heads.

The terror campaign succeeds and Léopold’s profits soar….”

More here.

Comment:

First, using abhorrent cultural practices to justify the colonial invasion of a country is nothing new: it was a justification used by the British over the veiling of women. The treatment of women (for eg. the stoning of adultrous women) in Islamic countries today was also used as one of the many pretexts for the invasion of Iraq and for current neocolonial policies there.

Second point, cannibalism occurs in different contexts. You notice that two of those contexts (famine and mental illness) still obtain in modern Western societies, even if the others don’t.

I added this research on cannibalism from wiki:

“Care should be taken to distinguish among ritual cannibalism sanctioned by a cultural code, cannibalism by necessity occurring in extreme situations of famine, and cannibalism by mentally disturbed people. ”

Third point. There is some evidence that cannibalism may have been a practice common in the human past. It has been practiced by cultures all over the world, in ancient and in modern times. And memories of it remain in religious practices even in the major religions.

According to wiki (which also gives examples of Japanese, Chinese, Russian, Liberian, Aztec, and even American anthropophagy), a British tribe reportedly practiced it:

  • St. Jerome, in his letter Against Jovinianus, tells of meeting members of a British tribe, the Atticoti, while traveling in Gaul. According to Jerome, the Britons claimed that they enjoyed eating “the buttocks of the shepherds and the breasts of their women” as a delicacy (ca. 360 AD). In 2001, archaeologists at the University of Bristol found evidence of Iron Age cannibalism in Gloucestershire.[11]

Charges of cannibalism were common in the blood libel against Jews, and evidence of cannibalism among tribal people was often exaggerated to dehumanize them and win popular support for mass killings, expropriation of their land and enslavement. If you tot up the deaths from cannibalism (it was frequently ritualistic and occurred in a cultural context that lent meaning to the practice — so it can’t be seen as solely murderous) among the Congolese at the hands of their own against deaths at the hands of their civilizers, there’s no doubt what the numbers would show.

An analogy. Reportedly there are around 5000 honor killings (not exact) a year around the world. But using those 5000 killings to initiate wars and economic policies that kill or mutilate millions and ruins tens of millions more sounds like a pretty flimsy and immoral pretext.

Apart from that, if you were to balance those 5000 honor killings against the innumerably greater number of rapes and other forms of street crimes against women in Western countries (there are almost no street crimes of that nature in Saudi Arabia, for example) — you would get a clearer idea of the disingenuousness of such arguments.

As a further example, the US has among the highest rates of infanticide (a practice that was widely prevalent in many cultures until the advent of birth control)

[Update: According to Laila Williamson, for infants less than one year, the American homicide rate was 11th in the world in 1998, while for one through four it is 1st, and for  five through fourteen it was fourth. From 1968 to 1975, infanticide of all ages constituted nearly 3.2% of all reported homicides in the United States].

Now, would some foreign country have been justified in bombing American civilians en masse because of this? I think not…

But that’s the power of propaganda. It gets otherwise rational people to swallow patent absurdities and go charging off the cliff because some government/corporate hack told them to on TV…

The New Yorker on a Zionist’s apostasy in Israel

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Letter from Jerusalem

David Remnick July 30, 2007

 

 

“People are not willing to admit it, but Israel has reached the wall,” Avrum Burg says.

“People are not willing to admit it, but Israel has reached the wall,” Avrum Burg says.

 

Related Links
Audio: David Remnick on Avraham Burg and Israel.

The self-regard of Israelis is built, in no small part, around a sense of sang-froid, and yet few would deny that the past year was deeply unnerving. Last July, Israel launched an aerial attack on Lebanon designed to destroy the arsenal of the radical Islamist group Hezbollah, the Party of God, and force its leader, Hassan Nasrallah, to return two kidnapped soldiers and end its cross-border rocket attacks. “If the soldiers are not returned,” Dan Halutz, the Israeli Army’s chief of staff, said at the time, “we will turn Lebanon’s clock back twenty years.” Israel bombed the runways of the Beirut airport, the Beirut-Damascus highway, and numerous towns, mainly in the south; Hezbollah, from a network of guerrilla installations and tunnel networks worthy of the Vietcong, launched some four thousand rockets, mainly Katyushas, at cities in northern Israel. Israel degraded Hezbollah’s military capabilities, at least temporarily, but there was no victory. Hezbollah survived and, in the eyes of the Islamic world, in doing so won; Nasrallah emerged as an iconic hero; and President Mahmoud Ahmadinejad of Iran, one of his sponsors, called yet again for the elimination of Israel from the map of the Middle East. Halutz, who had dumped all his stocks on the eve of the war, resigned, and Ehud Olmert, the Israeli Prime Minister, saw his approval rating fall to as low as two per cent.

More recently, Hezbollah’s ideological ally in Palestine, Hamas—the Islamic Resistance Movement—led a violent uprising in the Gaza Strip, overwhelming its secular rival, Fatah. Suddenly, Israel, backed by the United States, found itself propping up the Fatah leadership, in order not to lose the West Bank to Hamas as well. Not even the ceremonial office of the Israeli Presidency was immune from the year’s disasters: a few weeks ago, President Moshe Katsav agreed to plead guilty to multiple sexual offences and resign, lest he face trial for rape. Despite a resilient, even booming economy, peace and stability have rarely seemed so distant.

In this atmosphere of post-traumatic gloom, Avraham Burg, a former Speaker of the Knesset, managed to inflame the Israeli public (left, right, and center) with little more than an interview in the liberal daily Ha’aretz, promoting his recent book, “Defeating Hitler.” Short of being Prime Minister, Burg could not be higher in the Zionist establishment. His father was a Cabinet minister for nearly four decades, serving under Prime Ministers from David Ben-Gurion to Shimon Peres. In addition to a decade-long career in the Knesset, including four years as Speaker, Burg had also been leader of the World Zionist Organization and the Jewish Agency for Israel. And yet he did not obey the commands of pedigree. “Defeating Hitler” and an earlier book, “God Is Back,” are, in combination, a despairing look at the Israeli condition. Burg warns that an increasingly large and ardent sector of Israeli society disdains political democracy. He describes the country in its current state as Holocaust-obsessed, militaristic, xenophobic, and, like Germany in the nineteen-thirties, vulnerable to an extremist minority….”

More in “The Apostate,” The New Yorker Magazine.