Leftist Stupidity on Ecuador from a Year Back

Lately, I’ve been learning a bit about economic development and its relationship to economic freedom. I’ve been especially interested in economic nationalism and leftist support for it. A few minutes ago, I found this bit of tripe from a blog more popular than this. It’s not the worst sort of tripe on this matter, of course- but it’s pretty bad. The bit of tripe compares apples (Ecuador) to cucumbers (the U.S. in the 1990s and 1980s), does not adjust for population growth, and uses an improper methodology (Russia does not have a lower GDP per capita than Turkey; always use Purchasing Power Parity in GDP comparisons). In reality, per capita GDP (PPP) growth in Ecuador since 2009 has been slower than in either of the two countries (both of which have commitment to free-market policies) bordering it. The statistics came out less than a day ago and, for some reason, do not include the 1980s.

Also, there seems to be a general pattern. Latin American countries adopt leftist policies. Rightist economists warn they will surely be disastrous in the long run. Latin American countries experience high inflation and debt crisis, thus leading to IMF intervention. Leftists blame IMF intervention for slow growth resulting from debt overhang and failure to absorb traditional economy into the globalized world.


Things That Will Never Be Said by the News Media or President Obama

But then Mr. Erdogan has said many reasonable and conciliatory things since the Syrian crisis began, and he has done nothing to rein in the thugs who have seized control of parts of eastern Syria, or to block the fighters and sophisticated weapons supplied them from Turkey.

Suddenly, the risks inherent in Erdogan’s gamble are glaringly obvious. By supplying weapons to the rebel militias, with their strange mix of intelligence agents, local thugs and trigger-happy Turkish volunteers, Erdogan made himself a hostage to their brutish blundering.

The West, led by President Barack Obama, will demand that he cut off support to the rebels once and for all and seal the border.

Obama said Turkey has a “direct responsibility” to compel rebels to cooperate.

If Turkey continues to destabilize Syria, Obama said, it will further isolate itself from the international community.

It is long past time that Erdogan ended both the inflammatory information war in Turkey and the military proxy war in northern Syria that he has done so much to conceive, fund, organize, and fuel. There are hundreds of corpses strewn across a field today in eastern Syria. What is Recep Tayyip Erdogan’s next move?

Turkey’s Recep Tayyip Erdogan is at a fateful crossroads. He can go all-in on Syria, upping the ante by increasing military supplies to the retreating rebels in Syria’s north, providing open military backing to their cause, and as a last resort ordering an invasion by Turkish troops. Or, on the other hand, he can relinquish his would-be stranglehold over Syria and accept Syria as a unitary state, probably oriented toward Iran and the Axis of Resistance, while establishing normal relations with Syria on the lines of, well, Greece.

-Thus is the power of the Narrative. Some destabilization (e.g., in Syria and Iraq) is almost completely ignored (though not quite covered up; but note the measured tone) (but why?). Other destabilization (e.g., in Donetsk) is seen as a threat to international order (but why?). What fundamentals lie behind this? And who directs all this? The war crimes of the Syrian rebels and the ISIS (the former actively supported, the latter apparently only passively supported by Erdogan’s regime) are no less severe than those of the Novorossiya rebels.

The Congressional Hearing on the Rise of ISIS

Only a couple hours after I left D.C.’s White House North Lawn to drive home, a Congressional hearing on the rise of the ISIS began less than three kilometers away from where I was. It is only fair to comment on it here.

1. James Franklin Jeffrey of the Washington Institute for Near East Policy recognizes the threat of ISIS (which I also do), supports the White House’s decision to attempt the overthrow of Maliki (which I oppose), opposes Kurdish independence (which I support), supports greater oil revenue distribution with the Iraqi Arab Sunnis (which I also support), and supports a serious activist anti-ISIS policy (which I support, but Obama doesn’t). He fails to see that it is Turkey that is the Middle East’s rouge state, not Iran, which, aside from its occasional support for Hezbollah’s attacks on Israel and U.S. citizens, is harmless to the U.S.. Money quotes:

Importantly, our allies in the common struggle for stability—Turkey, Israel, and the Sunni Arab states— see Iran as at least an equal threat to their survival as Al Qaeda, and we must respect that to gain their essential cooperation.

As we’ve experienced, from Al Qaeda before 9/11 to Iraq since 2011, problems in the region absent decisive, heads up engagement by the US will keep getting worse to the point when, very late, and at great cost, the US will be compelled to act at far greater cost and risk than if acting earlier.

2. The retired General Jack Keane of the neocon (and very informative) Institute for the Study of War gives an occasionally flawed, but generally correct, informative, and commendable testimony. His is the testimony at this hearing closest to my own views. It is the only one of the four testimonies to not throw Maliki under the bus. Unfortunately, this testimony contains blatant falsehoods: Syrian military-ISIS conflict is not uncommon (though it is true that the Assad regime has helped Syrian militant Islamist fundamentalists) and the FSA was definitely not “the only force in Syria that fought ISIL” (Kurds? Nusra? Syrian Army?). Keane also, sadly, fails to mention the crucial role of Turkey. Money quotes:

U.S. intelligence agencies have been quite aware of this threat, this is the failure of policy makers who ignored it.

AQI was defeated in Iraq by 2009, an admission they made repeatedly in message traffic, calling off the flow of the foreign fighters.

Key policy decisions in 2009 to disengage from Iraq politically and to no longer help shape Iraq’s political future was disastrous. Particularly in light of previous success in other post conflicts; Germany, Italy, Japan, South Korea, the Philippines, and Bosnia Herzegovina.

Russia desires to be a key player in the Middle East and influence other actions as they are doing successfully in Syria and Iran desires Iraq to be a client state similar to Syria. Maliki has brought them in as significant international supporters to assist with operations against ISIL which only enhances Maliki’s political position due to the lack of tangible support by the US.

3. Doug Bandow of the Friedman/Koch libertarian Cato Institute makes an unconvincing case for abstinence. He comes closest to my views while the U.S. occupation of Iraq, which I then saw as stupidity on a massive scale and today accept as necessary to clean up the mess the U.S. left behind after its reckless toppling of Saddam, was still going on. He correctly points out that the ISIS has plenty of problems, is more committed to expanding in the Fertile Crescent than striking the U.S., and cannot conquer most of Iraq’s population. However, the ISIS can easily triumph over its Baathist allies if they rebel, as it already has done in Syria. Bandow also points out that U.S. intervention is a band-aid over a much larger Iraqi credibility problem. However, if the Iraqi government is unable to become credible, there’s always the well-funded Kurdish Regional Government the U.S. can rely on to defeat the ISIS in northern Iraq. Bandow’s statement that “Today ISIL is too big to simply decapitate.” raises the prospect of a civil war in the Islamic State, which, while terrible to contemplate, is quite plausible. Unfortunately, Bandow wrongly throws Maliki under the bus. He fails to understand the consequences of his two statements: “In Syria the ISIL radicals face simultaneous military challenges from the government, moderate opposition forces, and even slightly less extreme jihadists, as well as the political task of establishing a functioning government in areas under its control.” and “Turkey is a Muslim nation with significant military capabilities which borders both Iraq and Syria.”. It is Erdogan, not Maliki, who is the Middle Eastern leader most responsible for the rise of ISIS. Fortunately, Bandow makes up for his mistake by pointing out the dubious prospects for a replacement for Maliki. He also correctly points out that the Middle East is in flux and that partition should not be off the table. Bandow is only partly correct in his objection to funding Syria’s rebels: the risk is that weapons may fall into the hands of Nusra, but supporting more secular humanist forces in Syria decreases Nusra’s advantage. Likewise, weapons falling into the hands of the enemy is an inevitable risk in any violent conflict. Bandow’s statement regarding Israel, Jordan, and Lebanon “However, Washington should be burning the diplomatic wires to encourage them to take action according to their interests and abilities. The U.S. has enough challenges in the Middle East and elsewhere around the world to jump into another conflict.” is 180 degrees from the truth. It would be foolish for these states to fight the ISIS, as all of them are smaller in territory than the ISIS and have no access to the Turkish border. The U.S., however, has enough pressure to force Turkey to allow the U.S. to conduct coercive operations against the ISIS from Turkish territory. If anything, Bandow is too supportive of Iran, though he does correctly state that “the Obama administration should quietly ensure that any U.S. military involvement does not clash with actions taken by Tehran”. Though Bandow does state that “ISIL has grown most obviously out of past U.S. policy mistakes”, he fails to state that it had shrunk during and after the late 2007 surge out of past U.S. policy successes. Money quotes:

To the extent that the organization establishes effective control over a territory, which remains problematic, it will have less incentive to strike the U.S., since doing so would, as with the Taliban in Afghanistan, risk its geopolitical gains. The group continues to pose a serious challenge, and one which could morph into something different and more menacing over time. But today Washington has an opportunity for a considered, restrained, and measured response.

Iraq’s most serious problem today is that the state lacks credibility and will, and the military lacks leadership and commitment. These America cannot provide.

Moreover, appearing to reflexively back Baghdad risks foreclosing potential solutions, including some form of federalism or even partition. The Iraqi Humpty Dumpty has fallen off of the wall. The Kurds are moving toward a vote over independence. The willingness of mainstream Sunnis to back ISIL demonstrates the depth of their alienation from Baghdad. The collapse of the Iraqi military suggests that the national government is unlikely to quickly reassert its authority. The U.S. and other interested parties, including Jordan, Israel, Turkey, and Iran should be talking informally and quietly about options to defuse the potential sectarian explosion. While Washington could help advance such an approach, no plan will succeed without support of regional states and local peoples. All options should be in play.

Washington’s reluctance to countenance Tehran’s involvement in Iraq is understandable but irrelevant. Hussein’s loss always was going to be Iran’s gain, the Bush administration’s intentions notwithstanding. There is nothing Washington can do to change that today. The more America is willing to tie itself to the Maliki government the less the latter might need to rely on Iran, but the impact likely would be marginal. The overwhelming religious, cultural, personal, economic, and geopolitical ties would remain. The U.S. always will be a distant and alien power.

America’s role should remain advisory, at most, but it would be best to ensure no inadvertent complications. The crisis in Iraq has placed a greater premium on improving relations with Iran—and especially resolving the nuclear issue, if possible.

4. Michael Eisenstadt of the Washington Institute for Near East Policy comes closest to Obama’s views, but refuses to mention the crucial role of Turkey (if ISIS is equivalent to Viet Minh, Turkey is equivalent to North Vietnam and the U.S. is equivalent to the U.S.S.R.). He points out that direct U.S. intervention in Iraq would simply lead to more ISIS recruitment, but I say that this is a good thing! The more ISIS jihadis killed this time, the fewer the Iraqi government has to kill later. His testimony is mostly perceptive and quite frank. He does understand that “The road to liberating Iraq passes through Syria.”. He supports Obama’s half-billion dollar package to aid Syrian rebels, which I dismiss as duplicitous, and way too much and too late. Money quotes:

Thus, the U.S. should allow Prime Minister Maliki to twist in the wind as long as he is not willing to work to achieve a cross-sectarian coalition government, while quietly pushing for an alternative to him who would be willing to work on that basis. It should, however, hold out the prospect of expedited weapons deliveries, and even U.S. drone and air strikes against IS positions in Sunni-only areas in the north as an incentive.

And thanks to its rapid success, IS was transformed overnight from perhaps the richest terrorist group in the world, to one of the poorest (de facto) states in the world.

IS’s defeat of the ISF was also a major setback for Iran. And IS’s rise threatens the so-called ‘axis of resistance,’ from the Levant to Iran, as IS is active in Lebanon, Syria, Iraq, and its recent victories might inspire violent Salafists already active in Iran.11 This is yet another reason, barring any major change in policy by Baghdad, not to move too quickly to lavish military support on the Iraqi government, as it is worth letting Tehran consider how its own policies have contributed to the current state of affairs there.

In conclusion: Michael Eisenstadt has spoken. The ISIS is staying. Thousands of antiquities in its territory are doomed to be either sold or destroyed.

Why the U.S. had Two, not One, WW I Demobilization Recessions

I have often found it curious that the U.S. had two post-World War I demobilization recessions, rather than just one, with the later one being much more severe than the earlier. The U.S. also apparently had two post-World War II demobilization recessions, but the 1948-49 recession isn’t as interesting because industrial production fell by only 9 to 10%, not by 32% as in 1920-21, and was much less severe than that in 1945. The simple fact of the matter is that the recessions of 1920-21 and 1918-19 were distinct due to the delayed effects of government deficit spending. Due to confusion about when the war would end, U.S. government spending cuts in the aftermath of the armistice occured remarkably late (in comparison to those just after WWII) and the industrial demobilization that occured in 1918-19 was remarkably incomplete (yes, the yearly estimates are for the entire year). Thus, up to mid-1920, the U.S. economy was wildly overheated in all but real output and stock prices. The period between the two demobilization recessions was characterized by an import boom (the export boom only ended after the end of the import boom), high inflation (up to June 1920), and the yield curve being steeply inverted. This period was apparently the only one in U.S. history in which the yield curve inverted before a recession and continuously remained inverted into the next recession.

The total length of the 1920-21 recession was the same as that of the recession of 2008: 18 months. This was normal for pre-Great Depression U.S. recessions, but one has to remember that the recession of 2008 was the longest the U.S. has experienced since the Great Depression. The most severe portion of the recession occured between August 1920 and March 1921. This was a period of strong deflation, a flattening yield curve, and the highest short-term real interest rates in the history of the United States. The end of the 1920-21 recession also had significant downward wage flexibility, which helped lead to a speedy and strong recovery. The idea that either the Federal Reserve or tax cuts had much to do with the end of the 1920-21 recession is rather dubious. The New York Fed Discount Rate was over 50 basis points higher at the end of the recession than at its beginning. Likewise, the recession was pretty much over by the time the first of the Mellon tax cuts were put into effect in July of 1921.

Some Clarification on the Previous Post

There is a discrepancy between the two translations of the relevant text I linked to the day before yesterday regarding whether Bartolomé de las Casas meant that the Hispaniolan native population declined by over two-thirds between 1494 and 1496 or between 1494 and 1506. The text is ambiguous, stating that this decline occured “from the year 94 to 6”.

The archaeological facts do not support the idea that the pre-Columbian population of Hispaniola was much greater than a quarter million. The site of Bas Saline/Navidad, said to be a “chiefly residence” and “one of the largest Taíno village sites reported in Haiti” is only some “95,000 square meters”, or 23 and a half acres, in area. Using the typical urban 100 person per acre rule (which is probably highballing in this context), this Taíno capital village was home to only some 2350 people. Assuming five other such capital villages on Hispaniola and 95% of the Hispaniolan population living outside these capital villages, one gets a pre-Columbian population of Hispaniola of some 235,000 people-pretty close to the results of my exponential model published a day before yesterday.

Also, by my estimate, the peak population density of pre-Columbian Hispaniola was just over 3 persons per square kilometer. This is the same as the population densities of such lands as Iceland, Australia, and Suriname. Population densities higher than those of Laos (population of capital: over half a million) or Estonia (population of capital: over two fifths of a million) are highly implausible for pre-Columbian Hispaniola.

I’m now wondering what the pre-Columbian population of Cuba was. Using the population density figure mentioned above, I guess something like 300,000 , but I’m probably overestimating.

The Pre-Columbian Population of Hispaniola

There have been many attempts over the past century to figure out the pre-Columbian population of the island of Hispaniola, which is now home to some 20 million people. What native population was left by the end of the 16th century apparently completely mixed with the Spanish ruling class and black majority. This was due to extensive enslavement, starvation, war deaths, and spread of infections of European origin throughout Hispaniola. The highest serious estimates of Hispaniola’s pre-Columbian population are something like half to a quarter of the present population; the lowest are around 60,000 natives. I have recently created two very similar and very simple exponential models of the 15th-16th century population of Hispaniola since the arrival of Columbus. Column C is an exponential model relying only on the first four data points (1508-60,000 natives, 1510-33,528 [not 33,523 as in the Born to Die book], 1514-26,334, 1519-18,000). These data points come from the Born to Die book. Column D is an exponential model which includes the last two data points. 1900 natives in 1542 is based on the “less than 2000” natives mentioned in the Born to Die book. 150 natives in 1565 is based on a data point mentioned in Cook and Borah’s infamous piece of work, which happens to be fully available online. Both models have an R2 of over .98 if the last two data points are considered. The results of the model which includes the last two data points are shown below. I have excluded the dubious 1496 count Borah and Cook so often rely on as it does not seem that any count of the Spanish-held area of Hispaniola took place at the time. The Excel file I made is available here.

This is a decline of some 9-10% of the native population per year. However, it still only gives us roughly an eightieth of the present population of the island, or roughly a quarter million, as the supposed pre-Columbian population of Hispaniola. Even Bartolomé de Las Casas, who famously advocated a pre-contact population of Hispaniola of some 3-4 million natives, is only bold enough to say “it was believed that not one-third were left of the multitudes of people who had been on this island from the year 1494 to the sixth (probably 1506)“. This fits my exponential models remarkably well, with them yielding declines for the native population of Hispaniola of some 70% during those years. It is thus fairly safe to say that the population of Hispaniola at the time of first Columbian contact was around a quarter million, perhaps a bit less. This is the same figure that the U.S. News and World Report reported back in 2007.

First Time Since April 2009, U.S. Employment Situation Better than in June 1983

Almost a miracle (seasonally adjusted):

Note: U.S. unemployment figures from before the end of the post-Vietnam War recession are distorted by the effects of both wartime and peacetime military conscription practiced between 1940 and 1973. Part of this recent decrease is due to the expiration of extended unemployment benefits on December 28, 2013. Americans have waited over five years for this labor market improvement.