“If Chairman Wu were in power when Henry Ford was ruining the blacksmith, horse training and saddle making industries, she would have taxed the latter and subsidized the former. How about when computers took out the typewriter, carbon paper, and correction fluid (Wite-Out) industries?”
Madame Chairman Michelle Wu, Mayor of Boston, Massachusetts, has been supportive of offering a tax subsidy to landlords who convert their commercial real estate to residential units.
Why, pray tell, is she interfering with the free enterprise system (okay, okay, what little of it exists in Beantown) in this manner? Thanks to the Coronavirus (COVID-19), the demand for office space has declined precipitously. Business firms have found they can get the job done with at least some of their employees working from home, at least on a part-time basis. Thus, the lesser need for office space. This, of course, is a world-wide phenomenon, hardly limited to the United States, to Massachusetts, to Boston. But Madame Wu is taking the lead in this type of political response.
Talk about teaching grandma to suck eggs.
If Chairman Wu were in power when Henry Ford was ruining the blacksmith, horse training and saddle making industries, she would have taxed the latter and subsidized the former. How about when computers took out the typewriter, carbon paper and, correction fluid (Wite-Out) industries? This economic interventionist would undoubtedly have put her thumb on the scales once again, supporting the nerds and taxing their competitors. Then, there is the case of mobile phones supplanting, what, well, lots of stuff: cameras, telephones, flashlights, paper maps, etc. Again, this central planner would have rolled up her sleeves and helped this process along, in the precise direction it was moving anyway, without any of her help, thank you very much.
What is wrong with that? In each of these past cases, including the present one, she would have just been rendering the market more efficient. Helping it out, helping it along, as it were.
There are several problems here.
First, suppose that one of these days she guesses wrong about the movement of the market in the direction of consumer satisfaction. Then, she will have caused vast amounts of wealth to have been dissipated. But, you say, that so far she has predicted correctly. At least, as it now looks to most analysts, she is entirely correct on the need for conversion of commercial and industrial real estate to residential purposes.
Of course, it cannot be denied, entrepreneurs sometimes—alright, often—predict the economic future badly. The difference is, and this is crucially important, Madame Wu has no skin in the game.
No doubt Carlson and Greenwald favor a foreign policy of nonintervention for some good reasons that libertarians also embrace. But they favor it for a bad reason as well. Instead of favoring the taxpayers keeping their own money, Carlson and Greenwald want to spend the Pentagon’s huge budget on a gigantic, compulsory, inflationary, wealth-destroying, coldly bureaucratic, intrusive, and condescending welfare state if not outright government ownership and control.
We’re led to believe that today’s political struggles are largely a contest between populists and elitists. But something besides libertarians is missing from that simple tale: the elitists in populist clothing, or elitist populists. We have no better example than a conversation the other day between the leading “right” populist Tucker Carlson and the leading “left” populist Glenn Greenwald. (The quotation marks are to indicate that these tribal labels are seriously problematic.)
To their credit, Carlson and Greenwald consistently defend a noninterventionist foreign policy and free speech. However, advocates of full individual liberty should take care because these pundits voice positions that seriously trash individual liberty. See their views on the free movement of people and goods across national boundaries. Voluntary exchange is not a priority for Carlson and Greenwald.
Even knowing this, I was unprepared for what they would say. Carlson offered this (at 28;10):
I think a lot of people have awakened to the now-demonstrable fact that libertarian economics was a scam perpetrated by the beneficiaries of the economic system that they were defending. So they created this whole intellectual framework to justify the private-equity culture that’s hollowed out the country…. I think you need to ask, Does this economic system produce a lot of Dollar Stores? And if it does, it’s not a system that you want because it degrades people and it makes their lives worse and it increases exponentially the amount of ugliness in your society. And anything that increases ugliness is evil. Let’s just start there. So if it’s such a good system, why do we have all these Dollar Stores?… If you have a Dollar Store, you’re degraded. And any town that has a Dollar Store does not get better. It gets worse. And the people who live there lead lives that are worse. The counterargument, to the extent there is one, oh they buy cheaper stuff. Great. But they become more unhappy…. [The Dollar Store] is also a metaphor for your total lack of control over where you live and over the imposition of aggressively in-you-face ugly structures that send one message to you: which is you mean nothing; you are a consumer, not a human being or a citizen.”
There you have it. The market is an exploitative scam, and the Dollar Store, which many of us regard as a godsend, is an ugly, degrading, and dehumanizing snare. Who knew?
Where to start? Libertarian — in other words, consistent free-market — economics is a self-serving scam? Really? Got proof? Were Menger, Böhm-Bawerk, Mises, Hayek, Friedman, Kirzner, Sowell, Williams, Buchanan, Rothbard, etc. actually members of a cabal that was getting rich at our expense? Is Carlson having a laugh?
He would have been on firmer ground if had said that libertarian economics is used as a cover for elitist government interventions. But libertarians have said this roughly forever.
Central bank power has increased immeasurably with the removal of gold from the global monetary system. And as their power has increased, central banks have increased financial instability. This may have been unnoticed by everyone but the keenest observers, but the suppression of interest rates to the zero bound and below, followed by the rapid increase in interest rates to deal with the unexpected (that is by central bankers and their chorus of blind, deaf, and dumb monkeys) surge of price inflation is clearly down to policy failure.
Surely, it is now apparent that central banks are guilty of mismanaging the economy. By slashing interest rates to zero and in some cases to an unnatural minus figure, then flooding financial systems with currency-equivalent credit conjured out of nothing followed by rapidly increasing interest rates in an attempt to stem the consequences, central banks have bankrupted themselves and much of their entire economies.
Even though hapless economists and money managers are still in thrall to them, central banks have proved themselves to be unfit for purpose. It is time for a new system based on true economic demand for credit without state interference.
The ineptitude of the monetary planners is now sharply focused by events in Argentina, whose new president has vowed to close the central bank and introduce a currency board for the peso backed by the US dollar. Far from being a maverick politician, President Milei is being well advised. Currency boards work, imposing an automatic discipline on government spending.
This article opens up the debate between free banking without central banks under gold standards, and the fiat currency system which gives central banks the power of debasement. Commercial banking without central banks is the historical norm, and the evils of statist currency management is a more recent development.
Those who argue that central banks represent progress from free banking are clearly in the wrong.
Introduction
The new president of Argentina, Javier Milei, was elected on a platform that included closing down the nation’s central bank. He has been lauded by an eclectic bunch of free marketeers, monetarists, and even the IMF. So far, his monetary reform has included a 54% devaluation of the peso against the US dollar, which probably brings its official value close to the black market exchange rate. It is less of a devaluation and more an acceptance of reality.
Milei has made it plain that Argentina will adopt the US dollar as the nation’s currency through a currency board arrangement. Currency boards were originally the means by which some of Britain’s colonies tied their local currency to the pound. Operating mechanically and beyond the reach of meddling politicians, currency boards worked well. They also allowed free trade and import and export flows making exchange controls unnecessary. They are a quick fix for stabilising currency values, proved in practice to be extremely effective.
Under a currency board, a new peso will circulate backed at least 100% by US dollars. Pesos will be exchangeable for dollars and vice-versa at the holder’s option. It will cover not just banknotes, but sight deposits held at commercial banks. An issuing authority is required to discharge this duty by law, or at least with a clear mandate, precluding political interference. With the possible exception of acting as a lender of last resort, all the other functions of a central bank fall away, so it can be shut down. Where the dollars for Argentina’s currency board will come from is not yet clear, but like any fiat currency presumably the banking system will provide. In any event, dollars already circulate freely in Argentina, pesos being only money for the poor.
When “the establishment” sees its central plank, the fountain of its free financing removed inevitably there will be kickback. But Milei’s tactics are those of a boxer unexpectedly overwhelming his opponent. With the electorate behind him, he is raining rapid blows on the establishment, closing nine ministries, cutting subsidies, and cancelling tenders for public works projects. He appears to have learned the importance of acting quickly to continually keep the establishment off guard, unable to regroup and persuade Argentine’s socialistic media of an adequate response. It must be done early and quickly, while Milei retains the initiative and can always threaten opposition to his plans with a new plebiscite.
Perhaps the greatest danger to Milei is an army coup, which is the Argentine establishment’s normal way of eliminating the democracy problem.
Meanwhile, choosing the US dollar as the backing for a currency board has won him plaudits from foreign economists of various persuasions. The exception, perhaps, has been from the Asian hegemons, China and Russia who accepted Argentina’s membership of an expanded BRICS from next month. But they have kept quiet. From the US’s point of view, Milei’s election must be seen to be a positive development and a chance to throw a spanner into the BRICS works. But it is not so simple, because China recently helped the previous administration with a yuan swap line taken out with the people’s Bank to pay the majority of a dollar debt due to the IMF.
The swap is part of a pre-agreed line of up to 130 billion yuan with free access to the Argentinian central bank of 35 billion yuan of the facility. Abolishing the central bank will simply require the agreement to be novated to the finance ministry, so that shouldn’t be a problem. However, it appears that the delicacy between the previous administration’s ambitions to join BRICS alongside Brazil and Milei’s retrenchment to using US dollars are understood by Milei, because he is reported to being uncharacteristically diplomatic in his relations with China.
Milei will have to tread carefully over this thorny issue. As a free marketeer and said to be a disciple of the great Austrian economist, Friedrich Hayek, he almost certainly understands that the dollar is only a temporary monetary solution. Surely, from his libertarian instincts he observes US budget deficits and the dollar’s own debt trap in the context of its similarities with his own government’s profligacy and its debt traps.
Apparently, he is a fan of bitcoin, which confirms this understanding. A dollar currency board is only a temporary solution lasting for so long as the dollar doesn’t face its own crisis. Milei would be well advised to assess whether Argentina’s 61.74 tonnes of gold reserves are sufficient insurance for protection against the dollar’s demise, because it is increasingly likely that a Plan B will be required, possibly before the ink is dry on Plan A.
We will watch these developments with great interest, particularly the return to free banking, which we can define as banking without the controlling influence of a central bank.
Central banks are a recent innovation
Given that the Romans invented banking, and that Italian banks adopted the modern form of credit creation through double entry bookkeeping in the fourteenth century, commercial banking without central banking has a far longer history than with central banking. While the Bank of England existed as a central bank following the 1844 Bank Charter Act (it had for a long time previously operated as a commercial bank with the monopoly of the government’s business, which is not the same thing), and America’s Federal Reserve Board came into existence before the First World War, central banking per se spread more widely from then on, coinciding with the end of gold standards, particularly in Europe.
Just as a currency board makes a modern central bank redundant, it also makes them redundant for gold standards, which require a similar and simple function of issue control. The failures of the Bank of England in the years following the 1844 Bank Charter Act were down to its crude attempts at interest rate management. The Act, which was based on currency school precepts, assumed that the separation if the issue department from banking was the solution. It wasn’t, proved when the provisions of the Act with respect to gold cover for the note issue were suspended only three years later in 1847, then in 1857, and in 1866. The legislators and the bank itself did not anticipate that the run on its gold reserves would come not from the public submitting bank notes for sovereigns, but from deposit balances in the banking department being encashed.
The Bank made the further error, which persists to this day, of trying to manage interest rates in an economic context. Besides the real problem of no central banker actually understanding the business of economics, interest rates should have been managed in the context of maintaining gold reserves. At least modern currency board operators have learned this vital distinction.
Modern economists tend to dismiss currency boards, as well as free markets. Their solution to problems, mainly of their own creation, is to double down on regulations increasing their scope and complexity. An entire industry of regulators, policy managers and hangers on has been created to discharge invented functions.
Naturally, those employed in it support its continual expansion. For this reason, the practical simplicity of a gold standard and currency boards gets short thrift. This ignores the lessons of history, that the world evolved from a feudal state through the industrial revolution to a standard of life for the commoner which would have been the envy of kings only a century ago, all on the back of commercial bank credit. Yes, there have been upsets along the way: but the question to be addressed is whether commercial banks in their relationships with each other can minimise those upsets, or can governments through their central banks achieve a better outcome?
The monopoly over currency provision stems from the 1844 Bank Charter Act in English law, not adopted by the Scottish banks (Scotland has its own legal system) which to this day sees the major banks issuing their own bank notes, admittedly fully backed by their reserves at the Bank of England. While it was gradual, the withdrawal of the facility whereby English banks issued banknotes only served to consolidate the government monopoly over currency. Currency has come to be regarded as national money, and not a credit liability of a bank. The importance of this development tends to be overlooked. Very few are the economists today who understand that a banknote is actually a liability of the central bank, despite it still being evidenced as such in its accounts. They would not so readily take that erroneous view, surely, if commercial banks were still permitted to issue their own banknotes.
When a commercial bank issues banknotes, the notes are bound to have a similar rating to a deposit, the only difference is that a banknote is a promise to its unknown bearer. If the facility was reintroduced, it is certain that a bank would issue banknotes to rank as a substitute for the national currency. It may be that a bank would not take up this facility anyway, bearing in mind that London bankers ceased issuing notes in the 1790s, fifty years before their issue was banned in the 1844 Act. But there is no substantive reason why issuing bank notes should not be permitted, and if demanded by a bank’s customers, a commercial bank’s notes would simply circulate alongside notes issued by the government. Then, perhaps, economists would have a greater understanding of the credit status of banknotes.
The limit of statist involvement in credit should be to provide an updated version of the currency board, an issuing facility for banknotes and deposit balances totally backed by real, legal money, which is gold. The issuer must be charged with the sole responsibility of ensuring gold backing for its liabilities is always there. The issuer’s balance sheet would consist of notes and deposits as credit liabilities, and the assets entirely comprised of gold bars and coin. The profit and loss account would generate sufficient income from seigniorage to cover storage and minting expenses. And the directors of the issuer would be charged with managing interest rates purely with a view to maintaining gold reserves. It must be detached from all other financial activities.
In this way, credit generated through banking operations becomes a purely commercial consideration. Bank credit is a function of commercial banking, referenced to the rate set by the issuer by virtue of bank deposits held with it, but reflecting additional counterparty risks. To satisfy depositors’ likely demands for coin or bullion, a commercial bank can either maintain a deposit at the issuer gained by submitting gold in exchange or buy them in the market. This is sufficient to tie the value of commercial bank credit to that of the national currency, which unquestionably becomes tied to gold.
The error in the 1844 Bank Charter Act was to split the Bank of England into two departments, but under the same management. Its banking department was no less a credit operation than any commercial bank, and it was the inherent conflicts, particularly over the setting of interest rates, which led to the Act’s failures.
Whether the state maintains a banking presence in the commercial banking system becomes a separate issue. Management of economic outcomes by interest rate manipulation is a dead duck, given that the interest rates objective can only be to maintain gold reserves. But there is still the thorny question of the need for a lender of last resort. In his plans to abolish Argentina’s central bank, this is an important question yet to be addressed by President Milei.
Free market theory posits that this is unnecessary. In the knowledge that there will be no bail outs, bankers can be expected to pay proper attention to counterparty risk, and the faintest suspicion of impropriety would be immediately reflected in a bank’s credit rating in the interbank markets. And it is not beyond the ability of banks within the commercial network to deal with banking failures, because it is obviously in their collective interest to maintain systemic credibility. This is another lesson from the pre-central banking era.
The violence of Britain’s bank credit cycle abated in the decades following the Napoleonic wars due to improvements in clearing systems, as the chart of wholesale prices below shows:
A clearing system for the London banks was set up in the late eighteenth century, when for the first-time daily differences were settled between the banking members on a net basis. The Bullion Report (1810) reported that there were 46 private bankers who cleared a gross value of £4,700,000 daily by a net settlement of $220,000 in bank notes. This was a significant improvement on the earlier system whereby bank clerks walked around London, visiting other banks to settle claims. In 1854, joint stock banks were admitted into the London clearing system, and the Bank of England joined in 1864. By then, the system of settling balances in banknotes was done away with, replaced by bankers’ drafts settled twice daily with a final reconciliation in the late afternoon. Furthermore, over time other cities established similar clearing arrangements as well as intercity arrangements.
Over the time covered by these increasing refinements to interbank settling, wholesale prices became decreasingly volatile. In other words, as commercial banking became increasingly efficient as a system, the impact on prices from the bank credit cycle as credit was alternately expanded and contracted diminished. Given that the objective of a central bank is to ensure price stability, it amounts to evidence that this function is not needed.
When Israeli president Isaac Herzog described the assault on Gaza as a war “to save Western civilization, to save the values of Western civilization,” he wasn’t really lying. He was telling the truth — just maybe not quite in the way that he meant it.
The demolition of Gaza is indeed being perpetrated in defense of western values, and is itself a perfect embodiment of western values. Not the western values they teach you about in school, but the hidden ones they don’t want you to look at. Not the attractive packaging with the advertising slogans on the label, but the product that’s actually inside the box.
For centuries western civilization has depended heavily on war, genocide, theft, colonialism and imperialism, which it has justified using narratives premised on religion, racism and ethnic supremacy — all of which we are seeing play out in the incineration of Gaza today.
What we are seeing in Gaza is a much better representation of what western civilization is really about than all the gibberish about freedom and democracy we learned about in school. A much better representation of western civilization than all the art and literature we’ve been proudly congratulating ourselves on over the centuries. A much better representation of western civilization than the love and compassion we like to pretend our Judeo-Christian values revolve around.
It’s been so surreal watching western rightists babbling about how savage and barbaric Muslim culture is amid the 2023 zombie resurrection of Bush-era Islamophobia, even while western civilization amasses a mountain of ten thousand child corpses.
That mountain of child corpses is a much better representation of western culture than anything Mozart, da Vinci or Shakespeare ever produced.
This is western civilization. This is what it looks like.
Western civilization, where Julian Assange awaits his final appeal in February against US extradition for journalism which exposed US war crimes.
Where we are kept distracted by vapid entertainment and artificial culture wars so we don’t think too hard about what this civilization is and who it is killing and maiming and starving and exploiting.
That’s why, as this AP report notes, the Pentagon is curiously dancing on a pinhead over the Red Sea. Washington is huffing and puffing, trying to talk tough but ultimately hesitant to use its firepower. The U.S. has an aircraft carrier, USS Dwight Eisenhower, in the Gulf of Aden next to Yemen. But for some reason, it has kept a distance from the marauding Yemeni vessels.
Maybe they are a feared of getting whacked with a Chinese made carrier killer missile.
The United States has this week announced a multinational navy task force to counter Yemen’s blockade of the Red Sea. The U.S. also warned it is prepared to hit the Arab country with military strikes in retaliation.
The stakes are high. The Yemenis have the vital Red Sea global shipping route under their command from controlling the narrow Bab el-Mandeb strait that flows out to the Indian Ocean. The impact of closing this chokepoint on global trade is eye-watering. Hence the Americans and their European allies have sprung into action with threats of retaliation.
In response, the Yemeni armed forces in alliance with the Houthi rebel movement told the Americans to shove it.
The Yemenis warned that they have ballistic missiles to sink any warship or submarine that the U.S. and its allies deploy in the region. The Yemenis added they will continue blocking cargo vessels using the Red Sea route until the genocide in Gaza stops.
Over the past week, Yemen has stepped up its interdiction of cargo ships attempting to transit the Red Sea route. Several major shipping conglomerates have confirmed their vessels are being re-routed around the African continent. The additional transport costs and disruption to supply chains are already hiking price inflation in Western economies, adding to already painful economic woes and political damage for governments held in contempt by hard-pressed populations.
The Yemenis say they are only targeting Israeli-linked ships but it seems that the deterioration in security conditions in the narrow maritime corridor is deterring all shipping companies. The Bab el-Mandeb strait is 32-kilometers wide straddling Yemen and the Horn of Africa. Hundreds of container ships and oil tankers pass through the strait on any given day, ferrying cargo from Asia to Europe through the Red Sea and the Suez Canal, the other chokepoint further north in Egypt. If one chokepoint closes, the whole route is closed.
The United States has sought to frame the navy task force as a policing operation to protect international commerce and freedom of navigation.
The Yemenis, however, have said their disruption of Israeli-affiliated shipping is a legitimate action in solidarity with Palestinians.
U.S. Secretary of State Lloyd Austin in announcing the new naval coalition, dubbed Operation Prosperity Guardian, stated. “The recent escalation in reckless Houthi attacks originating from Yemen threatens the free flow of commerce, endangers innocent mariners, and violates international law. The Red Sea is a critical waterway that has been essential to freedom of navigation and a major commercial corridor that facilitates international trade. Countries that seek to uphold the foundational principle of freedom of navigation must come together to tackle the challenge posed by this non-state actor launching ballistic missiles and uncrewed aerial vehicles (UAVs) at merchant vessels from many nations lawfully transiting international waters.”
In response, Mohammed Abdel-Salam, a spokesman for Yemen’s Houthi rebels, said: “The American-formed coalition is to protect Israel and militarize the Red Sea without any justification, and will not stop Yemen from continuing its legitimate operations in support of Gaza. We are not making a show of force against anyone [except Israel]. Whoever seeks to expand the conflict must bear the consequences of his actions.”
The Americans are trying to make out that the Yemenis are acting like criminal sea pirates and the U.S.-led task force is nobly serving in the interests of international commerce and peaceful navigation.
Washington and its allies cannot publicly admit that their actions are in support of Israel. The genocidal offensive on Gaza since October 7 in which nearly 20,000 civilians have been murdered is politically untenable for Israel’s Western allies.
The life and thought of al-Farabi is the absolute opposite of the twisted concept of “clash of civilizations” – which may have been constructed with help from al-Farabi’s philosophy and politics, but then has been exploited by the usual suspects with the aim of turning post-modernity into a bloodbath.
TURKISTAN – As geopolitical insanity zooms off the charts at the end of 2023, let us seek solace in a brief Silk Road magic carpet ride.
This comes to you from a northern strand of the Ancient Silk Roads in Kazakhstan, from the Ili valley in Western China through the Dzungarian Gate all the way to the gorgeous Zailiysky Alatau mountains, spurs of the great Tian Shan range so close to Almaty.
This Silk Road strand then followed the Chu valley and branched out southwest to Samarkand (in today’s Uzbekistan), via Shymkent and Otrar (both in Kazakhstan).
The first settlers of all these vast latitudes were essentially nomadic Scythians. Their kurgans (circular burial mounds) are still dotting the countryside of southeast Kazakhstan and northern Kyrgyzstan.
The Scythians were followed by assorted, migrating Turkic tribes. By the end of the early 10th century, cities such as Otrar (the ancient Farab) and Turkistan (the ancient Yasy, a key trade center in the Great Silk Road) were blossoming.
Otrar/Farab introduces us to its most famous son, Abu Nasr Muhammad ibn Muhammad ibn Turhan ibn Uzlug al-Farabi – Islamic scientist and philosopher (872-950) but also mathematician and musical theorist. Al-Farabi lived right at the start of the golden age of Islamic civilization.
The medieval Latin world knew him as Magister Secundus: the second greatest teacher of philosophy after Aristotle. Today he is revered as a symbol of the Turkic world, and an established leader of philosophic thought across the lands of Islam.
Al-Farabi was one of the very few philosophers who woke up the West from its scholastic slumber. He was not only a pioneer of philosophy of civilization – as mirrored in books such as On the Philosophy of Politics and Virtuous City, the apex in terms of studying Greek and Islamic concepts of ethics and political order; he was also one of the founding fathers of political science.
He was a descendant of Turkmen, a Turkic people (not exactly Turkish), born and raised along the path of Silk Road caravans carrying key strands of civilization. The history of the Turks starts with the Turkish khaganate in the 6th century. The golden cradle of Turkic civilization stretched from the Altai mountains to the steppes of Central Asia.
A philosopher-sage, al-Farabi excelled in theology, metaphysics, ontology, logic, ethic, political philosophy, physics, astronomy, psychology, music theory, always relaying priceless knowledge from Antiquity to the medieval era and modernity.
A game-changer to the classical system
Turkistan/Yasy, only 60 km north of Otrar/Farab, on the fringes of the Kyzylkum desert, is a university town doubling down as home to the most important Islamic landmark, monument and pilgrimage site in Kazakhstan: the mesmerizing 14th century Timurid tomb of the Sufi master, poet and scholar Khoja Ahmed Yassawi.
Ancient Central Asian Muslims believed that three pilgrimages to Turkistan were the spiritual equivalent of going to the Hajj; badass conqueror Timur was so impressed that he ordered the building of a mausoleum on the site of Khoja Ahmed Yassawi’s original tomb.
Donald Trump’s foreign policy mistakes were many, but on the North’s nuclear challenge he has been farsighted compared to most foreign policy analysts. That continues with his reported willingness to deal with the DPRK as it is, not how everyone wishes it were. North Korea is a nuclear state. It is time to confront that reality.
With opinion polls showing Donald Trump ahead of Joe Biden in the 2024 race, Washington policymakers are contemplating the possibility of another Trump administration.
No doubt there would be dramatic changes in U.S. foreign policy. Including, it appears, in Washington’s approach to North Korea.
As Politico reported: “Donald Trump is considering a plan to let the Democratic People’s Republic of Korea keep its nuclear weapons and offer its regime financial incentives to stop making new bombs, according to three people briefed on his thinking.”
This would overturn decades of international insistence that the North eschew nuclear weapons, commonly called CVID: complete, verifiable, irreversible dismantlement/denuclearization. Until now, questioning this policy triggered wild wailing, gnashing of teeth, and rending of garments among Korea-watchers.
The conventional wisdom is that Washington must stand firm — until the end of time, or beyond, if necessary — despite the growing North Korean nuclear arsenal. Pyongyang has enough fissile material to make at least 45-55 weapons, and perhaps twice that number, though estimates vary widely.
Moreover, the DPRK continues to add nukes. One controversial study warned that the North could amass as many as 242 weapons in the next few years, which would place it ahead of Israel, Pakistan, India, and the United Kingdom.
Virtually no one believes that Pyongyang will denuclearize. Only South Africa, with just six weapons (and another being constructed), has eliminated an existing arsenal. Almost certainly disarming the DPRK would require either defeat or collapse of the Kim dynasty. Regarding North Korea, fantasy has seemingly become policy.
However, it appears that Trump is prepared to overturn conventional wisdom when it comes to Pyongyang — again. After threatening war in 2017, he turned to summitry with Kim Jong-un, a switch widely denounced in Washington. Distrust of Trump as a negotiator was pervasive, with the greatest fear that he would succeed and agree to something other than CVID. After the 2019 Hanoi summit collapsed without a deal, Kim appears to have decided that Trump was unwilling to agree to sanctions relief without a commitment to full denuclearization. The former then ended his dialogue with the US (and South Korea).
Biden continues to insist on CVID, instructing the DPRK not to conduct another nuclear test. Despite his proposals for contact, which at times came perilously close to begging, Kim has refused to talk. Rather, the latter is expanding North Korea’s nuclear capability, testing ballistic missiles, launching satellites, developing submarine-launched and tactical weapons, and threatening first use of nukes.
These efforts may now be aided by Russia, which is relying on the North to provide artillery shells and perhaps more for the Ukraine war.
The future looks no better. Last year after the Supreme People’s Assembly enshrined the North’s nuclear status in law, Kim declared that “As long as nuclear weapons exist on Earth, and imperialism and the anti-North Korean maneuvers of the US and its followers remain, our road to strengthening our nuclear force will never end.”
This policy, he added, is “irreversible.” He is likely strengthening his nuclear deterrent to prepare for talks with Washington — presumably offering to trade nuclear limits for sanctions relief.
Policymakers almost uniformly reject this course since arms control won’t deliver denuclearization, Washington’s preferred outcome. However, the result still would be better, likely far better, than Pyongyang continuing to augment its stockpile and replacing Pakistan as a global Nukes ‘R Us. However, that doesn’t matter to critics.
Some simply insist that the North cannot have nuclear weapons. Of course, it shouldn’t have them, but successive U.S. presidents repeating that point have left North Korea as an undisputed nuclear state.
Another argument is that dropping CVID would undermine the nonproliferation regime. However, the DPRK’s possession of nuclear weapons, not America’s recognition of that reality, poses the real nonproliferation challenge.
Equally important, the Cold War brought ever-increasing taxpayer-funded largess flowing into the coffers of the “defense” industry, along with the ever-increasing power and influence of the Pentagon, the CIA, and the NSA within the overall federal structure.
After the Cuban Missile Crisis, Kennedy achieved a breakthrough, one that threatened not only the ever-increasing power, money, and influence of the national-security branch, but also its very existence. Kennedy came to realize that the Cold War was just one great big racket — and a highly dangerous one at that.
While the decision to eliminate President Kennedy undoubtedly took place after his resolution of the Cuban Missile Crisis, it was without a doubt solidified when Kennedy ambushed his enemies within the U.S. national-security establishment with his Peace Speech at American University on June 10, 1963. With his Peace Speech, JFK was upsetting the Cold War apple cart that the Pentagon and the CIA were convinced would last forever.
What was so significant about that speech?
After the end of World War II, the U.S. government was converted from its founding system of a limited-government republic to a governmental structure called a national-security state. The justification for this radical change, which was accomplished without even the semblance of a constitutional amendment, was that the United States now faced an enemy that was said to be even more threatening than Nazi Germany. That new enemy was “godless communism” as well as a supposed international communist conspiracy to take over the United States and the rest of the world — a conspiracy that was supposedly based in Moscow, Russia — yes, that Russia!
With the conversion to a national-security state, the U.S. government acquired many of the same totalitarian powers that were being wielded by the totalitarian communist states, such as the Soviet Union and Red China — powers that had been prohibited when the government was a limited-government republic. Such powers included state-sponsored assassinations, torture, kidnapping, indefinite detention, and coups.
Equally important, the Cold War brought ever-increasing taxpayer-funded largess flowing into the coffers of the “defense” industry, along with the ever-increasing power and influence of the Pentagon, the CIA, and the NSA within the overall federal structure. Over time, the national-security branch of the federal government would become the most powerful branch, the one to which the other three would inevitably defer.
After the Cuban Missile Crisis, Kennedy achieved a breakthrough, one that threatened not only the ever-increasing power, money, and influence of the national-security branch, but also its very existence. Kennedy came to realize that the Cold War was just one great big racket — and a highly dangerous one at that.
That danger was manifested during the Cuban Missile Crisis. U.S. officials and their loyalists in the mainstream press have always maintained that the crisis was brought on by the Soviet Union and Cuba. Not so! It was brought on by the Pentagon and the CIA. It was those two entities that brought the world to within an inch of all-out nuclear war.
The Soviets and the Cubans knew that the Pentagon and the CIA wanted to invade Cuba and effect a regime-change operation there, one that would oust Cuban leader Fidel Castro from power and replace him with another pro-U.S. dictator, similar to Fulgencio Batista, the corrupt pro-U.S. brute that ruled Cuba before the revolutionaries ousted him in 1959.
That was why the Soviets installed those nuclear missiles in Cuba — to deter U.S. officials from attacking or, if deterrence failed, to enable Soviet and Cuban forces to defend themselves from a U.S. attack.
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