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This Is Getting Serious — We May Offend the Kremlin



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Jonah wrote on Friday about the administration’s threat to send socks to the Ukraine. On top of that we may nominate an ambassador to Russia who we’ve feared might offend the Kremlin. From the New York Times yesterday:

The manifestation of this thinking can be seen in Mr. Obama’s pending choice for the next ambassador to Moscow. While not officially final, the White House is preparing to nominate John F. Tefft, a career diplomat who previously served as ambassador to Ukraine, Georgia and Lithuania.

When the search began months ago, administration officials were leery of sending Mr. Tefft because of concern that his experience in former Soviet republics that have flouted Moscow’s influence would irritate Russia. Now, officials said, there is no reluctance to offend the Kremlin.

Walter Duranty—Still Honored by the New York Times



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The New York Times had an honor roll of the paper’s Pulitzer Prize winners that it ran on the back-page of the SundayReview yesterday. There in 1932 is Walter Duranty, “for coverage of the news from Russia”:

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Inflation Cure is Medical Malpractice



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James Pethokoukis writes much with which I agree in his home-page piece today: Inflation right now is running low; the rising prices that concern consumers are not in any important sense the result of Fed policy; “the Fed should explicitly and publicly target the level of nominal spending in the economy, or nominal GDP.” Yet I don’t agree with his conclusion that right now, higher inflation is “the correct economic fix.”

In the long run, a nominal-spending target is compatible with any desired level of average inflation. If trend growth is 2.5 percent a year and you want 2 percent inflation on average, target nominal spending at 4.5 percent. You don’t need to raise average inflation to gain the advantages of stabilizing the path of nominal spending (such as more predictable debt burdens and the ability to vary inflation around the average to mitigate the effect of supply shocks).

In the short run, Pethokoukis doesn’t really want more inflation; he wants higher growth in nominal spending and income. And he’d prefer as much of that nominal growth to be real, and as little of it to be inflation, as possible. He writes that the ”expectation of higher nominal growth and higher inflation would boost both consumer and business spending.” It’s true that expectations of higher inflation have this effect, but so do expectations of higher real growth. In other words, it’s the expectation of higher nominal growth that’s doing all the work.

Higher inflation should neither be the goal nor the means of monetary policy even in the short run; at most it’s an acceptable byproduct of monetary policy in some situations. 

If advocates of a nominal-spending rule for the Fed don’t have any reason to desire higher inflation, and calling for higher inflation is bound to be unpopular, then why do it? I think the answer is that we shouldn’t.

Web Briefing: April 23, 2014

When Improper Payments and Political Donations Meet



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Recently, Greg Mankiw had a post called: “Next time you hear someone advocate for single-payer healthcare, remember this.” He quotes the following NY Times story:

Two Florida doctors who received the nation’s highest Medicare reimbursements in 2012 are both major contributors to Democratic Party causes, and they have turned to the political system in recent years to defend themselves against suspicions that they may have submitted fraudulent or excessive charges to the federal government…. 
Topping the list is Dr. Salomon E. Melgen, 59, an ophthalmologist from North Palm Beach, Fla., who received $21 million in Medicare reimbursements in 2012 alone….  
Dr. Melgen’s firm donated more than $700,000 to Majority PAC, a super PAC run by former aides to the Senate majority leader, Harry Reid, Democrat of Nevada. The super PAC then spent $600,000 to help re-elect Senator Robert Menendez, Democrat of New Jersey, who is a close friend of Dr. Melgen’s. Last year, Mr. Menendez himself became a target of investigation after the senator intervened on behalf of Dr. Melgen with federal officials and took flights on his private jet.

As I have mentioned in the past few weeks, according to the Office of Management and Budget (OMB), the federal government misspent more than $100 billion in 2012 on things like sending hospitals reimbursements for treatments they didn’t provide or overpaying them for treatments they did provide. And that figure is comprised only of mistakes the OMB managed to catch. According to the GAO, Medicare Fee-for-Service (FFS), Medicare Advantage, and Medicaid combined to a total $61.9 billion in waste in 2012, making government-run health care by far the biggest offender in the waste sweepstakes. Medicare FFS alone improperly spent $32 billion in 2012. 

The problem is that nobody in the health-care system has a real incentive to crack down on fraudulent or mistaken payments. In fact, it is worse than that; the financial rewards provided by these overpayments are so lucrative that providers will go to great lengths to be sure that the money keeps improperly flowing. The New York Times quote above shows that.

In an October 2013 piece published in Citizens Against Government Waste’s WasteWatcher publication, analyst Leslie Paige laid out in detail the efforts by health-care providers and their sidekicks in Congress to slow down the rate of improper payments through recovery audit contractors (RACs).

This month, Paige doubles down with a piece showing that when it comes to controlling Medicare fraud, Centers for Medicare and Medicaid Services is all talk but no action. She writes:

Thanks to the Recovery Audit Contractor (RAC) program, $8.2 billion in improper Medicare payments has been recovered since its nationwide implementation in 2010.  RACs operate on a contingency fee basis, so their work does not cost taxpayers a dime.  Rather than celebrate this successful program, members of Congress, the Centers for Medicare and Medicaid Services (CMS), and special interests, particularly the hospital trade associations, are conspiring to kill it.

Beginning in October 2013, in three consecutive steps, CMS suspended 80 percent of the program’s post-payment auditing for an entire year.  CMS also barred the RACs from reviewing retroactive claims, even though federal law allows the RACs to look at claims going back five years.  The one-year suspension of claims reviews means that the Medicare Trust Fund will hemorrhage about $4 billion in overpayments to hospitals.  Between them, Medicare and Medicaid have the worst improper payment rates in the federal government. 

And members of Congress, both Republicans and Democrats, are no better. In fact, they are doing everything in their power to get in the way:

The landscape for the RAC program, and taxpayers, became exponentially worse on Thursday, March 27, 2014, when the U.S. House of Representatives moved to address Medicare’s Sustainable Growth Rate (SGR) issue, popularly known as the “doc fix.”  In 1997, Congress established the SGR, which was supposed to peg the amount of money for Medicare reimbursements to physicians to economic growth.  Almost immediately, Medicare spending began outpacing economic growth, which would have triggered reductions in the reimbursement rates.  Since physicians are increasingly refusing to take on new Medicare patients, cutting reimbursement rates only accelerates their exodus from the program.  Since 2003, Congress has passed temporary patches 17 times to prevent the SGR cuts from going into effect.  Faced with a March 31, 2014 deadline, the latest “doc fix” patch was a must-pass legislative vehicle and was, inevitably, laden down with all sorts of other provisions, including language that would suspend all RAC audits for another six months. 

When some members of Congress balked at taking a public roll-call vote that would enable billions of dollars in improper payments to flow out of the Medicare Trust Fund, House Republican leadership engaged in a stunning and outrageousprocedural gimmick.  Collaborating with House Democratic leadership, as well as Senate Majority Leader Harry Reid (D-Nev.), they quietly jammed the bill through a virtually empty House chamber by voice vote.  The House’s procedural skullduggery guarantees that this highly successful anti-waste program will remain vulnerable to future political manipulation by members from both sides of the aisle.    

RACs will now be barred from post-payment reviews of improper hospital claims for 18 months, which means that the Medicare Trust Fund will lose at least another $2 billion in improper payments.  

Paige’s piece is here

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The Moral Case Against the Ex-Im Bank: Why Are We Encouraging Third World Governments to Buy Boeings?



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There are plenty of excellent reasons why we should shut down the Export-Import Bank: We don’t need it, there is no “market failure” to address, it is inefficient, and it distorts price signals. Even Barack Obama called the Ex-Im Bank “little more than a fund for corporate welfare” in 2008. (He quickly changed his tune after assuming power).

But there’s an equally important but less often discussed argument against the Ex-Im Bank: the moral case.  

A major function of the Ex-Im Bank, practically speaking, is to coax foreign companies to buy Boeing airplanes. It’s often overlooked that many of the companies buying these planes are government-owned airlines in poor (or even very poor) countries.

Take Ethiopian Airlines, for instance. The airline is owned by the government of Ethiopia, a country where 78 percent of the population lives on an income below $2 a day, the average life expectancy was 59 years in 2011, and state health expenditures amount to a paltry $3 per person. 

And how does Ex-Im encourage Ethiopia to spend its meager public funds? Perhaps on education improvements, health services, or critical infrastructure? Don’t be silly. They sell them Boeing planes, of course! Bad credit, no credit? No problem! The Ex-Im Bank’s creative financing options will allow any country to put shiny new Boeing planes in their national airports — no matter how dire their fiscal position.

Keep reading this post . . .

Scientists: There’s a 99 Percent Chance Juan Williams Is Wrong



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Juan Williams’s column this week in the Hill hits an optimistic note: 

There is still hope for Democrats to win the House majority!

Democrats picked up seats in 2012, he points out, and 30 of the House races they lost were by less than ten percentage points; the GOP brand is awful; and Obamacare hit 7 million enrollees. Alas, 2012 was a presidential election year — an Obama election year, at that; the GOP brand has rapidly recovered since last year’s shutdown fiasco; and Obamacare remains just as unpopular as it did before exchange enrollment looked pathetic. (He relays Democratic Congressional Campaign Committee chairman Steve Israel’s implausible hope that “the Republican budget [is going to] define the next seven months.”)

Which is why the Washington Post’s political-science blog, the Monkey Cage, said on Friday that there is effectively no chance of Democrats’ retaking the House. Here’s the results of a simulation they ran:

As you may have noticed, there are very very few scenarios in which Republicans end up with fewer than the controlling threshold of 218 seats — about 1 percent of the scenarios, in fact, a result that their model has produced since last December. The Monkey Cage simulation predicts the median scenario is that Republicans will gain about five seats, and there’s a 39 percent chance they get back to their 2010 position, with 242 seats. This simulation, of course, relies on today’s data, and things can change over the next seven months — President Obama’s approval rating could improve some, for instance. But Williams doesn’t really offer reasons why the situation is going to change — it’s a very good bet it won’t, or won’t do so enough to flip the House.

Monday links



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British Pathé, the U.K. newsreel archive company, has uploaded its entire 100-year collection of 85,000 historic films in high resolution to YouTube.

Go Ahead And Drink A Bottle Of Wine A Day, Says Alcohol Scientist.  Hey, it’s science!

21 Dogs Whose Groomers Took Things A Little Too Far

Tomorrow, April 22, is Earth Day; here’s the co-founder who killed then composted his girlfriend.

Excellent set of charts and graphs that illustrate some of the basic painful truths of everyday life in the Western world.

9 Vintage Video Beauty Tutorials.

ICYMI, Friday’s links are here, including the 1973 Turkish Captain America movie in which he fights evil Spider-man, a Rube-Goldberg-esque wine bottle opener and pourer, and an excellent photo essay: Victorian Prudes and their Bizarre Beachside Bathing Machines.

Bonneys



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Impromptus today is a Nebraska journal (Part I). I’d like to add a musical note, here in the Corner. In the journal, I quote a friend of mine about Billy the Kid: “He’s often thought of as a romantic hero. But he was a really bad guy.” I comment, “Was he. One of the less attractive traits of our popular culture, I think, is that it makes heroes out of people who were thoroughgoing villains, people who would slit your innocent throat without blinking.”

Okay, the music: Barbara Bonney is a famous American soprano (who lives in Salzburg, incidentally). She believes that she may be related to Billy the Kid (a.k.a. William H. Bonney). In the mid-’90s, André Previn composed a piece for her: Sallie Chisum Remembers Billy the Kid. (Chisum was one of the women who knew him. Whether Biblically, I’m not sure.)

A golf note, to follow a musical note? I can handle it: The daughter of a golf pro, Barbara Bonney is a crack golfer herself. I once asked her whether golf and singing were similar (as every singer-golfer says). She answered, “No, they’re the same.”

There is an essay to be written on that subject. Maybe someone has already done it — I’ll have to check.

Wasserman Schultz: ‘We’re on Offense’



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Congresswoman Debbie Wasserman Schultz (D., Fla.) said Sunday that the Democrats are in a strong position for the midterm elections despite a growing litany of wobbly statements from party officials, elected politicians and liberal commentators.

Wasserman Schultz, chairwoman of the Democratic National Committee, said Democrats who are distancing themselves from the Affordable Care Act are a demonstration of “Legislation 101″ and evidence that her party is on course to perfect the unpopular law.

“The president is right and Jeanne Shaheen is right,” Wasserman Schultz said in an appearance on NBC’s Meet the Press, responding to criticisms of Obamacare by Democratic Senator Jeanne Shaheen of New Hampshire, who faces a potentially tough challenge in November.

“I will match up our ground game and our turnout operation . . . any day of the week,” Wasserman Schultz told host David Gregory. “We ran circles around the the Republicans in 2012 and 2008.”

Gregory countered that the president’s leadership on Obamacare, the Keystone XL pipeline and other matters has drawn criticism from major figures including former Obama advisor David Axelrod, Shaheen, Senator Mary Landrieu of Louisiana, and other prominent Democrats.

But Wasserman Schultz denied that the November elections will be a referendum on Obama’s leadership. She asserted that only three House seats are seriously endangered by Republicans in November and that Senate races are “absolutely not” about the president and his policies.

“Each of these candidates have to run their own race,” Wasserman Schultz said. “They have to talk about the issues that are important to their constituents. If you look at the success rate and track record of these incumbents — Mark Pryor, Mary Landrieu, Mark Begich — they are all ahead of any of their Republican opponents. And these Republicans are mired in a civil war where the Tea Party has won. And they’re consistently nominating the most extreme candidates. And we’re on offense in states as well. So you’ve got Georgia and Kentucky and even Mississippi, where we have a very good chance to pick up those seats.”

Tags: Elections , Democratic Party , Debbie Wasserman Schultz , Sunday Shows April 20 2014

Peggy Noonan: Hillary Wants to Show She Was a ‘Significant Player’



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Celebrated Ronald Reagan speechwriter Peggy Noonan said Sunday that Hillary Clinton is trying to prove she mattered in her tenure as President Obama’s first secretary of state.

“I think part of the purpose of this book,” Noonan said about Clinton’s upcoming Hard Choices, “is to refute the idea out there that as secretary of state she was not a significant player in the creation of U.S. foreign policy.”

Clinton’s book, which is due in June, will reportedly focus on her tenure running the State Department. Prior to that she served as first lady during President Bill Clinton’s administration and as a U.S. senator from New York State.

Noonan noted that Clinton must counter a popular impression that she was a placeholder secretary during a less-than-exemplary period for American statecraft.

“She was a person put on a plane and sent to Manila to be on Good Morning Manila,” said Noonan during a morning appearance on CBS’ Face the Nation. “Do you know what I mean? It was different than other secretaries of state in the past. And I think she’s going to try and say in this book, ‘No, no, no. I was very involved in the building up and creation of U.S. foreign policy.”

Noonan’s fellow panelists speculated that getting more credit for policy-making could be a monkey’s-paw achievement for Clinton, noting that her time at State saw the deadly conquest of the U.S. diplomatic compound in Benghazi, Libya by Islamic militants and controversial secret negotiations with Iran, and that she has been criticized by former Defense Secretary Robert Gates.

Tags: Hillary Clinton , Sunday Shows April 20 2014

George Will: ‘The Debate Is Over’ Is Obama’s Mantra



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Washington Post columnist George Will said Sunday that the Obama administration has a habit of shouting down debate on matters that are not going President Obama’s way.

Will made the observation in response to the president’s push to persuade voters and media that Obamacare is working and that Republicans should stop complaining about it.

“‘The debate is over’ is something of a mantra,’” Will said on Fox News Sunday. “‘The debate is over on climate change; everyone, be quiet.’ ‘The debate is over about early childhood education; everyone, be quiet.’ Lots of things are supposedly over, and you hear that from people who are finding the evidence inconvenient.”

Will noted that the president is making “a fairly minimal claim” when he asserts that the Affordable Care Act is working. “I mean, the farm subsidies in this country are working; whether or not they are doing good work is another matter.”

Also dragging out the debate, Will said, is the lack of data on new health-insurance enrollees and whether the Affordable Care Act’s mechanism — in which forcing Americans to buy insurance creates a large enough base of healthier, lower-cost members to balance out an influx of less healthy members with higher costs — will actually work. But the real debate, he said, is over first principles.

“The argument about Obamacare is not just about Obamacare,” he said. “It’s about the nature of the American regime: what kind of country we want to live in. And therefore it’s going to tick on for some while.”

Will also noted that the president is contradicting himself by declaring debate over but still urging his fellow Democrats to sing the Affordable Care Act’s praises.

“He says we should all quit talking about this,” Will said, “except Democrats this fall should campaign on the basis of the multiform excellence of Obamacare.”

Tags: Obamacare , George Will , Sunday Shows April 20 2014

Stevens: Fix Second Amendment to Remove “Any Limits” on Government Power



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Retired Supreme Court Justice John Paul Stevens supports gutting the Second Amendment in order to remove any limit on government infringements on the right of self-defense.

In his new book Six Amendments: How and Why We Should Change the Constitution, Stevens — who generally favored maximum government power during his 35-year tenure on the high court — proposes, among other things, changing the language of the Second Amendment to the U.S. Constitution so that the amendment would read, “ . . . the right of the people to keep and bear arms [when serving in the militia] shall not be infringed.”

Stevens acknowledged in an interview Sunday that this would remove “any limits” on government power over legal gun owners.

“I think that’s probably right,” Stevens said on ABC’s This Week. “But I think that’s what should be the rule, that it should be legislatures rather than judges who draw the line on what is permissible.”

Stevens said his proposed amendment, and a potential nationwide gun ban, would be closer to the original intent of the framers of the U.S. Constitution than the amendment the framers actually wrote and adopted.

“There was a fear among the original framers that the federal government would be so strong that they might destroy the state militias,” he told ABC host George Stephanopoulos. “The amendment would merely prevent arguments being made that Congress doesn’t have the power to do what they think is in the best public interest.”

Stevens made clear that the amendment would clear the way for a national ban on private ownership of the means of self-defense. “I think that’s right,” Stephens said in a pre-recorded interview with Stephanopoulos, a former communications director and senior adviser in the Bill Clinton administration.

Tags: Gun Control , Second Amendment , Supreme Court , Sunday Shows April 20 2014

Spicer: I Hope Democrats Take the President’s Advice on Obamacare



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The spokesman for the Republican National Committee wants Democrats to follow President Obama’s longstanding advice and talk about health care.

“It’s clear that Obamacare is still the number one, number two and number three issue going into this election,” Sean Spicer, communications director for the Republican National Committee, said Sunday. “Democrats are running from it, distancing themselves from it, talking about things they’ve done [to modify the inceasingly unpopular law]. They won’t talk about the fact they were the deciding vote, that they were out there advocating for it, that they want to implement it. They’re talking about how they can distance themselves from it . . .  In my opinion, I hope they take the president’s advice, frankly, for our side. In race after race, the reason we’re expanding the map, that Oregon, Minnesota, New Hampshire, Virginia are getting more and more into play is because it’s working.”

Spicer doubled down on Obamacare during an appearance on CNN’s State of the Union, along with Mo Elleithee, communications director for the Democratic National Committee and Rothenberg Political Report’s Stu Rothenberg.

Spicer’s three interlocutors all tried to dismiss his claim that Obamacare’s unpopularity remains potent politically. CNN host Candy Crowley introduced him by asking whether the Republicans are “a one-note party at this point.” Elleithee claimed that only Republican leaders are concerned about the Affordable Care Act, which passed in 2010 on a close party-line vote that lacked the wide majorities that were enjoyed in the past by comparably broad laws expanding the scope and intrusiveness of government power over citizens.

“I hope you believe that,” Spicer told Elleithee, “because I can’t wait until we see Majority Leader McConnell, Speaker Boehner . . . ”

Rothenberg too objected to Republicans’ focus on the law, which has led to millions of insurance-policy cancelations and will next year begin penalizing individuals for not buying insurance. “It’s hard for me to believe Republicans can run from now to November,” Rothenberg said in a sing-songy voice, “just on ACA.”

Spicer cited a recent Gallup Poll showing 54 percent disapproval of the Affordable Care Act and noted that health-care policy losses continue to pile up. He pointed to a report by Alabama’s WHNT on a group of widows of county employees whose policies have been terminated.

Rothenberg labeled such stories “additional anecdotes.”

Tags: Obamacare , Sunday Shows April 20 2014

Still Lacking a Leninfall



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In a piece for The New York Review of Books, the Russian writer Vladimir Sorokin highlights the key failure of post-Soviet Russia — the failure that has spawned so much more failure — the failure to stage a real reckoning with the communist past:

In the course of three days in August 1991, during the failed putsch against Gorbachev, the decaying Soviet empire tottered and began to collapse. Some friends and I found ourselves on Lubianskaya Square, across from the headquarters of the fearsome, mighty KGB. A huge crowd was preparing to topple the symbol of that sinister institution—the statue of its founder, Dzerzhinsky, “Iron Felix” as his Bolshevik comrades-in-arms called him. A few daredevils had scaled the monument and wrapped cables around its neck, and a group was pulling on them to ever louder shouts and cries from the assembled throng.

Suddenly, a Yeltsin associate with a megaphone appeared out of the blue and directed everyone to hold off, because, he said, when the bronze statue fell, “its head might crash through the pavement and damage important underground communications.” The man said that a crane was already on its way to remove Dzerzhinsky from the pedestal without any damaging side effects. The revolutionary crowd waited for this crane a good two hours, keeping its spirits up with shouts of “Down with the KGB!”

Doubts about the success of the coming anti-Soviet revolution first stirred in me during those two hours. I tried to imagine the Parisian crowd, on May 16, 1871, waiting politely for an architect and workers to remove the Vendôme Column. And I laughed. The crane finally arrived; Dzerzhinsky was taken down, placed on a truck, and driven away. People ran alongside and spat on him. Since then he has been on view in the park of dismantled Soviet monuments next to the New Tretiakov Gallery. Not long ago, a member of the Duma presented a resolution to return the monument to its former location. Given events currently taking place in our country, it’s quite likely that this symbol of Bolshevik terror will return to Lubianskaya Square.

The swift dismantling of remaining Soviet monuments recently in Ukraine caused me to remember the Dzerzhinsky episode. Dozens of statues of Lenin fell in Ukrainian cities; no one in the opposition asked people to treat them “in a civilized manner,” because in this case a “polite” dismantling could mean only one thing—conserving a potent symbol of Soviet power. “Dzhugashvili [Stalin] is there, preserved in a jar,” as the poet Joseph Brodsky wrote in 1968. This jar is the people’s memory, its collective unconscious.

In 2014, Lenins were felled in Ukraine and were allowed to collapse. No one tried to preserve them. This “Leninfall” took place during the brutal confrontation on Kiev’s Maidan Nezalezhnosti (Independence Square), when Viktor Yanukovych’s power also collapsed, demonstrating that a genuine anti-Soviet revolution had finally occurred in Ukraine. No real revolution has happened in Russia. Lenin, Stalin, and their bloody associates still repose on Red Square, and hundreds of statues still stand, not only on Russia’s squares and plazas, but in the minds of its citizens….

Meanwhile, the overnight news from Ukraine is of a curious shooting of a pro-Russian militiaman in Slaviansk (Slovyansk), the city that has been a center of “separatist” activity in the east. The cars of the supposed gunmen have allegedly been found to have been carrying materials that linked them to Ukraine’s (nationalist) Right Sector, a fact that the Russian foreign ministry has been quick to highlight. For its part, Ukraine’s interior ministry has denounced the incident as a fabrication.

Estonia’s president Ilves, a man who knows his history, has retweeted this:

“On the evening of Nov. 26, 1939, Soviet forces shelled the Russian village of Mainila.”

Google and it will make sense.

“At the going down of the sun and in the morning...”



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In a powerful and beautifully written piece for the Sunday Telegraph, Dan Hannan, well, I’ll let him explain:

 In 1925, Rudyard Kipling wrote an uncharacteristically restrained and sombre short story called The Gardener. It tells of a woman’s search for her illegitimate son, who goes missing in action on the Western Front. After the Armistice, she learns that he has been killed, and is buried in a military cemetery. Arriving there, she finds a man planting flowers in the earth and asks him where she might find her “nephew”.

The man looks at her “with infinite compassion,” and tells her “Come with me, and I will show you where your son lies”. As she leaves the graveyard, she looks back, and sees the man bending over his plants; “and she went away, supposing him to be the gardener”.

Those words, an echo of Mary Magdalene’s first sight of the Risen Jesus, often strike our generation as out of place. But for Kipling, who had lost his own son in the war (“Have you any news of my boy Jack?” begins his most heart-wrenching poem), the Easter reference was natural. He never wavered in his belief that Jack and all the rest had given their lives for others.

…Well, perhaps it was because of Easter, or perhaps because of the centenary year but, coming back from Strasbourg last week after the final session of the current European Parliament, I decided finally to visit Thiepval, where my great-uncle, William James Hannan, is commemorated along with 73,000 other British and South African soldiers.

I know little about the man, except that he was said to have been a promising golfer. He was killed in the Somme bloodbath on 21 October 1916, aged 24….

Hannan concludes:

Today, our grief is second-hand: almost none of us knew any of the war dead. But but don’t make the mistake of thinking that this makes it ersatz. Try looking up the details of your ancestors on the Commonwealth War Graves Commission website – or indeed, if you’re male, try typing in your own name, and counting how many matches come up – and see how easily the tragedy touches you across the intervening century.

Kipling’s generation, the generation that mourned its sons, was the first to pass; then the generation which mourned its comrades; then that which mourned its fathers, clinging, perhaps, to fragmentary childhood picture-memories. Then the fallen became faces in yellowing photographs. Now they are names on family trees. Soon, they will be only notches on slabs. Yet we will remember them.

Fund: Reid Calling Bundy Supporters ‘Domestic Terrorists’ Part of Dems’ Effort to Rally the Base



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Be sure to check out John’s most recent piece — “The United States of SWAT?” — on government agencies’ military-style units, such as the one used by the Bureau of Land Management at the Bundy ranch.

The (Re)birth of Ivan Ilyin



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Here’s a thought-provoking take on, if you like, “Vladimir Putin, conservative”, from John Schindler. The piece covers too much ground to be summarized in a few excerpts, so I’ll focus on just one aspect of it, the way that Putin is looking to base the legitimacy of his regime on older, far older, notions of what the Russian state should be:

[T]he reconquest of Crimea has caused a clear change of tone in Moscow, with celebration of old fashioned Russian nationalism coming into fashion. In his speech to the Duma announcing the triumphant annexation of Crimea, when speaking of Russians, Putin specifically used the ethnic term – russkiy –  not the more inclusive rossiyskiy, which applies to all citizens of the Russian Federation. This came among incantations to the full Great Russian program, with a Moscow-centric view of Eastern Europe seemingly endorsed by mentions of great Orthodox saints. Unstated yet clearly, this was all of a piece with “Third Rome” ideology, a powerful admixture of Orthodoxy, ethnic mysticism, and Slavophile tendencies that has deep resonance in Russian history.

Westerners seemed shocked by this “Holy Russia” stuff, but Putin has been dropping unsubtle hints for years that his state ideology includes a good amount of this back-to-the-future thinking, cloaked in piety and nationalism. Western “experts” continue to state that a major influence here is Aleksandr Dugin, an eccentric philosopher who espouses “Eurasianism,” an odd blend of geopolitical theory and neo-fascism. While Dugin is not irrelevant, his star at the Kremlin actually faded a decade ago, though he gets some Kremlin attention because his father was a GRU general. Far more important to divining Putin’s worldview, however, is Ivan Ilyin, a Russian political and religious thinker who fled the Bolsheviks and died an emigre in Switzerland in 1953. In exile, Ilyin espoused ethnic-religious neo-traditionalism, amidst much talk about a unique “Russian soul.” Germanely, he believed that Russia would recover from the Bolshevik nightmare and rediscover itself, first spiritually then politically, thereby saving the world. Putin’s admiration for Ilyin is unconcealed: he has mentioned him in several major speeches and he had his body repatriated and buried at the famous Donskoy monastery with fanfare in 2005; Putin personally paid for a new headstone. Yet despite the fact that even Kremlin outlets note the importance of Ilyin to Putin’s worldview, not many Westerners have noticed.

They should, however, because Putinism includes a good amount of Ilyin-inspired Orthodoxy and Russian nationalism working hand-in-glove, what its advocates term symphonia, meaning the Byzantine-style unity of state and church, in stark contrast to American notions of separation of church and state. Although the Russian Orthodox Church… is not the state church, de jure, in practice it functions as something close to one, enjoying a privileged position at home and abroad…

Ilyin is a complicated figure, and perhaps more of ‘liberal’ (these things are relative) than the synopsis above might suggest, but he does play an important symbolic role in what has become the key intellectual project of the Putin regime, the reconciliation of imperial and Soviet Russia, an idea that is (I’d argue) at its core, absurd, but comes with the advantage that it spares the Russian people the necessity of a full reckoning with what was done to, and by, them in the Soviet era.

As to what Putin actually believes, well, that’s anyone guess, but there should be no doubting his willingness to make use of the ideological position he has developed to support his agenda at home, in the territories of the former USSR (‘the near abroad’) and even further afar than that. Schindler has plenty to say about what the implications of that could be, none of them reassuring.

As the saying goes: read the whole thing. 

Gabriel Garcia Marquez



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Like everyone else I read One Hundred Years of Solitude in college. The magical realism — the sister, was it? with the tail, the other one who ascended into Heaven — seemed like cheating. Another way to put it is that Garcia Marquez was like Faulkner only worse. Yet some expressions and insights have stayed with me.

I understand The Autumn of the Patriarch contains veiled, perhaps unconscious, criticisms of Castro. I hope that is the case, because Garcia Marquez’ explicit politics were dreadful. He was a despot’s fanboy, like Gorky, Neruda, Pound, and Celine in the last century; or, to go back a bit, like Seneca (who at least killed himself). The paradox of the disciple of beauty who is also the disciple of crime is an old one.

Rand Paul to Meet Top Romney Donors in Boston



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Rand Paul will do his best to charm a group Mitt Romney’s top donors next week at an event facilitated by Romney finance director Spencer Zwick. 

The Friday luncheon will take place in Boston at the offices of Zwick’s private-equity firm, Solamere Capital, according to a source familiar with the event. Romney’s eldest son Tagg is also a managing partner at the firm, and Romney is the executive chairman. 

The event is yet another signal that Paul is preparing a for a serious presidential bid in 2016. Two years before the GOP primary, Paul is attempting to branch out beyond his libertarian-leaning base, and the ability to tap some of the establishment donors who helped Romney raise over $1 billion in 2012 will be critical to that effort. 

A number of the GOP’s likely candidates, including Bobby Jindal, have also looked to Zwick to make these introductions. Presidential contenders frequently seek access to the donors of the party’s previous nominee, but getting an in with Romney’s top bundlers is particularly coveted because Romney, who opted out of the public financing system, was the first Republican to raise over $1 billion. Romney’s donors also have a reputation for loyalty, and Zwick’s willingness to make introductions is likely to mean a lot.

The Washington Post reported last month that Paul is in the process of building a national political network, with over 200 people in its ranks, that extends to all 50 states. 

The Coming Real Estate Hyperpocalypse: All YOUR Fault!



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Some good folks are pig-biting mad about my recent article noting that the rate of foreclosures has dropped dramatically as a result of the reinflation of the real estate market.

Some of the vituperation is coming from the usual gang of housing justice fairness activists incensed that anybody (let alone a majority of homeowners and experts) would oppose the practice of giving public assistance to people who borrowed money with no intention of paying it back. But a lot of the abuse stems from a sentiment I agree with — that declaring victory on mortgage defaults means you have to ignore how bogus the “recovery” of the real estate market is.

There are three main claims: 1. Banks are sitting on a massive number of non-performing loans and putting off foreclosure starts because that would mean realizing big losses on their balance sheets. 2. For years the “shadow inventory” of hopelessly distressed homes was said to be in the multimillions, and since it’s not clear what happened to those (estimated) numbers, there are still second, third and fourth shoes waiting to drop on the market recovery. 3. The short-term recovery of the market is the result of massive public expenditures, government support for real estate inflation, and outright deception; so the whole house of cards must eventually collapse.

I agree with the general idea here, and in fact I find the whole concept of the real estate “recovery” infuriating. But facts is facts, and there just isn’t a lot of support for the idea that a second coming of the real estate correction is imminent. The Wall Street Journal had bank-owned property at only 309,000 units in October. Also in October, CoreLogic had the full shadow inventory, including REO and other seriously distressed property, at just1.9 million — about three months of inventory even if it all hit the market at once.

It’s certainly true that banks dragged their feet on foreclosures in the past, through a combination of swamped processing infrastructure, general reluctance to own real estate, and probably an effort to disguise how dire their balance sheets were. But in fact, the reinflation of real estate increases the bank’s incentive to foreclose on a bad loan. In most cases, foreclosure is just a way of minimizing losses: you lose the value of the loan but you end up with an asset you can unload in order to make up some of what you lost to the deadbeat. But foreclosing on a bad loan in a rising market can be an attractive deal: The lender can potentially end up owning a property that is worth more than the amount of the remaining principal. For the same reason, bad borrowers in rising markets will try to avoid default and foreclosure. That happens more often than you might think: A Boston Fed report [pdf] from 2009 — a time when house prices were still plummeting — found that a third of bad borrowers managed to “self-cure” without any loan modification or outside help. That portion can only go up as the incentive to hang on to the property increases.

That said, I fully agree that the 2006 crash was only a partial correction that was interrupted, less than midway through its healthful work, by massive fiscal, monetary and regulatory interventions. As a function of income, real estate began 2006 outrageously overvalued; it hit the trough of the downturn only noticeably overvalued; and today it is stunningly overvalued. This is an imbalance that began in the 1990s and has gotten more pronounced, and it is well outside of historic norms.

For most of postwar history, a house cost about 1.5 to 2.5 times more than a person earned in a year. Today, even after the much-whined-about correction, it is more than four times as much. In 1940 the median U.S. income was $1,368; and the median house price was $2,938, a little more than double the income figure. In 1960 the income figure was $6,200, while the house price was $17,200, 2.77 times as much. In 1980 the ratio was 1/2.62, with income at $18,000 and house price at $47,200.

But by 2011, supposedly the bottom of the correction, a house cost more than four times what an American earned in a year: income $50,054; house price $212,300. It is a massively unfair situation, and like most contemporary unfairness, it is directed against the young, who are looking at an ever-growing chasm between what they earn and what it takes to buy a house.

The standard explanations for this imbalance are laughably inadequate. Does anybody believe this is all the result of low interest rates (which by the way are an artificial phenomenon that can’t be sustained indefinitely), or that houses today are that much more valuable because they have bigger bathrooms and granite countertops? As Edgar Guest might have said if he were a certified financial planner, it took a heap o’ swindlin’ to make these houses into overpriced homes. Land-use policy, relentless Realtor propaganda, heedless pro-homeowner lawmaking by both parties, and maybe most of all the IRS’s unjust mortgage-interest deduction (which indirectly encourages real estate ownership by directly encouraging real estate debt) all had a hand in creating this monster.

As 2006 proved, some parties can come to an end even though they have massive political, business, financial and popular buy-in. Like many of you, I long for the second coming of the real estate crash, and I’m encouraged that RealtyTrac estimates there are still 9.1 million homes underwater. But I also remember how intense the reaction was during the recession, when all the masters of the universe got together to “rescue” us from the threat of reasonably priced homes. All those same people are still working overtime to keep the so-called recovery alive. Fear them.

Never doubt that a large group of panicking idiots can prevent the world from changing, especially when they have all the guns, all the money and all the microphones.

Tags: Real Estate

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