Another Variable

Demographers and statisticians have produced seemingly endless numbers about poverty and economics in the United States. Studies reveal correlations, but proving causation is, of course, a much more difficult task. To further complicate the matter, politicians tend to use statistics in a most unscientific way, and the additional matter of race is added to the mix, because race is both a correlate to economic variables and a politically explosive topic.

Although adding other factors to the discussion may seem to complicate beyond reason an already-complex situation, it also may be that additional variables can bring clarity. To this end, some researchers are looking at population growth in relation to poverty and race.

The population growth variable may explain why some anti-poverty programs failed to yield significant benefits - or even worse, seemed to actually increase poverty. Although students may view FDR's New Deal as the first big wave of such social legislation, other measures pre-dated Roosevelt's 1933 initiatives. The largest mass of bureaucratic systems aimed at reducing poverty arose starting in the 1960's, under LBJ's "Great Society" slogan.

The middle class was hit with a crushing onslaught of taxation as new programs mixed with significant increases in already-existing programs: Medicare, Medicaid, Food Stamps, etc. Yet the 1960's and the 1970's saw economic stagnation and increased poverty, often in inner-city areas - precisely those areas targeted by the programs. Why did these programs fail to reduce poverty? Why did these programs in some cases correlate to an increase in poverty?

An examination of population growth trends may help to answer these questions. Social engineers and the bureaucrats who organized these programs labored under a series of assumptions which were fashionable in the 1960's: that planet earth was nearing a population crisis, that population control was necessary for the macroeconomy, and that a reduced birth rate would help individual micro-economies.

Since then, it has become clear that macroeconomies function best when population is growing steadily and moderately, that the planet has a carrying capacity far beyond what the demagogues of the 1960's thought, and that individuals who become parents tend to experience economic stability relative to those with few or no children. When population growth is stable, not erratic, at a level slightly above replacement rate - perhaps 2.3 to 2.6 children per woman - economies are more likely to experience sustained expansion. With sustainable, responsible, and renewable resource management, the carrying capacity of Earth is well above ten billion. Childlessness is a variable which correlates strongly with poverty, despite the stereotypes and cliches surrounding the image of a "welfare mother" - there are racist overtones in the phrase. Childbearing correlates not only with economic well-being, but with general satisfaction in life, and better physical health.

But in LBJ's "Great Society" programs, the assumptions went along these lines: reducing the birthrate would increase prosperity. To those ends, government programs fostered contraception, birth control, and sterilization of those in poverty - again, with racist overtones. Thus, in an attempt to reduce poverty, social programs were discouraging one of the variables which might lift people out of poverty: childbearing. This points to a solution to the mystery of why programs designed to reduce poverty actually increased poverty. Sheryl James writes:

Few social programs in U.S. history loom larger than President Lyndon B. Johnson’s War on Poverty. Launched in the social-domestic cocktail mix known as the 1960s, the War on Poverty introduced programs such as Medicaid and Medicare in an effort to boost opportunity by reducing poverty.

We have no reason to doubt LBJ's sincerity: he certainly wanted to reduce poverty. Whether out of pure altruism, or whether because he hoped to gain more voters for himself and his political party, his intentions, and the intensions of the Congress which passed the legislation in question, were certainly bent on reducing poverty. But unintended consequences are ubiquitous in history, and the "war on poverty" was no exception. Given the bureaucracy's eagerness to promote contraception, birth control, and sterilization among poor - and Black - women,

from 1964 to 1973, among the populations the federal funding served, the overall birth rate dropped by just under two percent — but a whopping 19 to 30 percent among poor women.

During those years, not only did inner-city poverty increase, it also became more intractable. Understanding the exact correlation between childbearing and individual economic stability is murky: various mechanisms emerge as candidates. Perhaps those with children are more like to seek and hold steady employment; perhaps those with children enjoy more networking within their local community; perhaps those with children are supported better during the aging process. More clear on a macroeconomic level is that children create both a steady demand for consumer goods and a steady supply of new wage-earners entering the workforce.

University of Michigan Professor Martha Bailey exposes and articulates some of the assumptions with which the social engineers of the 1960's were working:

The architects of the War on Poverty thought that family planning programs were integral to reducing poverty, and would promote opportunities among poor women and their children.

Sadly, those assumptions proved to be false. Economically, programs based on those assumptions did not alleviate poverty; in fact, inner-city economic devastation worsened in the decades after the appearance and implementation of such "war on poverty" programs. Racially, these programs amounted to a war on the African-American family. By all metrics, conditions worsened: divorce, out of wedlock births, abandonment, failure to pay child support, etc. The non-quantifiable variables worsened as well: the societal cost of living in such circumstances exacted a toll on mental and emotional well-being.

Ironically, programs aimed at reducing the birthrate among Blacks, in addition to being blatantly racist, had the unintended effect of increasing illegitimacy. The out-of-wedlock birthrate actually rose. Deneen Borelli, an African-American political activist, writes:

Welfare in the United States began in the 1930s during the Great Depression. But in the sixties, following Great Society legislation, Americans who weren't elderly or disabled could collect a check from the government on which to live. Single mothers became the biggest users of the system. In general, it became so ingrained in the fabric of the nation that many view welfare as a right. In other words, there are people that think we have the right to life, liberty, the pursuit of happiness, and hard cash from the political establishment.

It is necessary to emphasize the word "unintended" in regards to the outcome of such social legislation. There is no doubt that some voters and some in Congress had genuine and sincere concerns for those in poverty. But unanticipated effects arise from their causes with no regard for altruistic intentions.

Many like-minded thinkers are clear: Welfare has negative, unintended consequences for the black community. A 1984 book called Losing Ground by Charles Murray demonstrates that welfare has perverse unintended consequences for blacks. He argues that the system was created by elites with good intentions. They believed that the blacks population was was discriminated against and that government aid would help to redress the wrongs. He said that the rationale behind the plan was that "they system" - not the individuals - was at fault. People could not get ahead in life because of the way in the country had operated in the past. Murray's solution to the situation was, however, deemed impossible to execute: He wanted to abolish welfare altogether. Critics chastised him.

Instead, federal and state governments have hoped that various attempts at reforming the welfare system would yield a new type of program which would give the hoped-for benefits without the negative and unintended consequences. So far, this has not happened. Despite experimentation with differing configurations of entitlement programs, inner-city poverty seems intractable, and the social misery experienced by the African-American family continues.

In a four-year period, from mid-2009 to mid-2013, average real income, average net worth, and the general standard of living in the United States fell for all groups, but for African-Americans living in inner-city neighborhoods, they fell further and quicker than for other groups. After fifty years of "war on poverty," many Americans, and specifically many Black Americans, still live in poverty.

An African-American Woman's Voice in Modern American History

With the election of Barack Obama as America's first biracial president, the long history of race in the United States entered yet another new chapter. The many different phases of Black history, and of the civil rights struggle, have differed subtly yet importantly from each other. Each such phase requires a rethinking of the situation - the challenges and the tactics to meet them. Deneen Borelli, an African-American author, reflects on the latest changes:

Obama's election should have been a wakeup call to the traditional black leaders that their message was outdated. They should have taken a step back and reassessed their message of victimization and blame. The message needs to be recast. It should have either stopped Jesse Jackson and his friends in their tracks or perhaps forced them to strive for new relevance. So I have to ask myself - What are they thinking? Why aren't black leaders listening?

With a successful career in managerial marketing, Deneen Borelli wants to see opportunities for African-Americans. After volunteering for the Congress on Racial Equality (CORE), and working with various media outlets, she came to see that there were two sets of would-be leaders in America's Black community. One set genuinely works to remove those economic obstacles which hinder African-Americans as they try to enter the middle class, and works to create a fair chance for each citizen. But the other set has no desire to help Blacks make it into the middle class; this other set of self-appointed leader seeks to enrich only itself, and in order to keep Blacks dependent on such leadership, this set seeks to keep Blacks in the status of economic and political victims. These cynical leaders needs a permanent set of victims; these cynical leaders claim to represent victims, and if there were no victims, these leaders would have no jobs. Speaking of such leaders, Borelli writes:

Here's the problem: They need to look at modern society in the twenty-first century and initiate new ways to address its problems. Surging welfare dependency in the black community, alcoholism, children continually being born into single-parent homes - these things plague this nation. And it is only getting worse because the numbers keep rising.

Understanding that the false leaders - Jesse Jackson, Al Sharpton, Charles Rangel, etc. - have betrayed the Black community they claim to represent, understanding that these false leaders in fact work to ensure that the Black community does not make large-scale progress into the middle class, Borelli looks to a better set of leaders. She looks to leaders who have a genuine interest in creating economic opportunity for African-Americans. The false leaders actually profit only when the Black community suffers; the false leaders need to represent a community which is not striving upward, but rather they can only represent a community which is suffering in place under oppression - and so these false leaders work to ensure that this community remains economically handicapped. Of these false leaders, Borelli writes:

Their moniker and their reason for fighting is supposedly "justice for everybody" but the only ones benefiting are the guys making the noise. They are all benefiting personally. It's upsetting that they've been able to get away with this. People despise how the old guard is doing business. It's simply wrong. There's a cost to all of this. By not spending political clout on the new fight, these guys are not espousing the benefits of liberty. They are not enlightening people, nor are they advancing them. Rather they are missing the message and trying to keep the rest of us in a time warp. Here's a suggestion: Why not use your power to encourage school choice to stop soaring dropout rates?

The forward-thinking leaders are those who find opportunities and explain them to the Black community; the forward-thinking leaders are those who find obstacles which prevent Blacks from moving into the middle class and work to remove those obstacles. Forward-thinking leaders can lead by words, by actions, or by example. They are working to get Blacks in to the American economy; they are not working to damage the American economy; they are not parasites seeking to leach off the economy. But the false leaders are trying to take African-Americans down the path to permanent poverty: down the path to permanent dependency. Borelli describes the damage that these false leaders seek to inflict on the Black community:

The old way isn't working so let's pursue a new way. The Democrats are beholden to special interest groups - the feminists, unions, trial lawyers, and environmentalists. Here's an example: Jackson joins the unions' fight so he can't advocate for school choice. He'd break the alliance. But with this close-minded approach everybody suffers and windows of opportunity to try to advance people are lost.

In order for the new leaders, the forward-thinking leaders, to find those opportunities and alert the Black community to those opportunities, a change in mindset is in order: the false leaders need to get out of the way. There are excellent examples of such new leadership: J.C. Watts, Clarence Thomas, Herman Cain, Condoleezza Rice, Colin Powell, Allen West, Armstrong Williams, Thomas Sowell, Alveda King, and many others. But this new, positive leadership can't get its message out, as long as self-serving demagogues are working to keep Blacks in poverty and in dependency. Borelli writes:

Tragically, the numbers are getting worse for blacks trapped in inner cities. Why aren't black kids improving and growing at the same rate as their peers? My opinion: It's all in the message from the career black politicians who promote big government solutions that result in stagnation and government dependence. They are playing the blame game and using the race card as their ace in the hole to avoid accountability. Hey, blame your problems on race and don't take responsibility for your life, even when you mess it up. That's easier than providing solutions. And let's face it: it keeps these guys in business.

Deneen Borelli, an articulate Black woman, formulates a clear path forward and upward for the African-American community: do not make victimization and oppression your core identity. Instead, let your core identity be that of people who find opportunities, remove obstacles to opportunities, and pursue opportunities.

A Black Woman's Voice in Modern American History

At the complex intersection of race and politics - a complicated intersection in any nation, but perhaps more so in the United States than in most nations - nuances abound, and readers must be alert for the most subtle of textual distinctions. To that mix, add gender. A twenty-first century Black woman in the United States may well grow tired of the second-string leadership of that which calls itself "the civil rights movement" or the "black movement" - the replacements for original leaders of the SCLC, like Martin Luther King, Jr.

Deneen Borelli is a Black woman with the courage to speak - with the courage to demand intelligent leadership, instead of the substandard and self-serving individuals who are more concerned with lining their own pockets than with finding substantive help for African-Americans. Individuals like Jesse Jackson and Al Sharpton have grown extremely wealthy, claiming to advocate for Black citizens; but in fact those Black citizens have seen their plight worsen, not improve, in recent years - e.g., from 2009 to 2013.

As unemployment among Blacks increased, and as their annual income and net wealth decreased, in the years after 2009, independent thinkers like Deneen Borelli want to see African-Americans make economic progress - like the progress they'd made in the previous decade. Rebuking the corrupt leadership which claimed to speak on behalf of Blacks but which actually merely exploited their leadership positions to enrich themselves, she writes:

Your time has passed and your message is dated. These days you are doing more to hurt the black community than you are helping it. And in the process, you are dismantling the greatness of the American nation. You aren't just hurting blacks with your backward tactics, but the country itself. Your archaic initiatives and your self-serving agendas need to end. It's time to fix the United States, focus on the economy, and put your outdated 1960s agenda to bed - the civil rights initiatives that began over fifty years ago just don't apply to today's world. Unless by choice, we don't sit at the back of the bus anymore. Let me be clear - we appreciated what you did, but now your old guard message needs to be modernized because hanging on to it only benefits you and hurts everyone else.

America's Black community needs economic freedom and opportunity. It does not need anger in the streets. About whom is Borelli writing?

Of course, I am talking about a long list of black leaders who understand and conceptualize today's problems by looking backward rather than forward. I am referring to Jesse Jackson, Al Sharpton, and New York's censured Democratic Representative Charles Rangel. They rose to prominence year ago by telling us that the poverty that plagued blacks was someone else's fault. Members of the black community who didn't have jobs, housing, or money to feed themselves could feel better about themselves knowing they were victims rather than failures.

While at one time in the distant past it may have been true, it is certainly no longer true to tell the vast majority of American Blacks that they are helpless victims. Beyond being untrue, it is dangerous - it is dangerous to teach people to identify themselves primarily, perhaps exclusively, as victims. The original goal of the civil rights movement was to empower African-Americans and make them independent. But leaders like Al Sharpton and Charlie Rangel are teaching Blacks that they are powerless and should be dependent. Borelli explains:

But these public figures who are leading the black population down that path need to seriously rethink their approach to civil rights issues and update their commentary. Their self-serving agendas for power and control have been obtained by playing the race card and in some cases, by declaring blacks are victims in need of special treatment. In some instances, they've even turned their victimization message into a business - claiming they are going after corporations for their communities, then oddly, benefitting personally and professionally. In some cases, investigations of black politicians are racially motivated.

African-Americans must ask themselves which leaders truly represent them, and which leaders merely exploit them. Sharpton and Rangel, it has become clear, do not act in ways which measurably or detectably benefit the Black community; Sharpton, Rangel, and a host of other similar individuals act only to gain wealth and power for themselves. Beyond not assisting the Black community, these corrupt and self-appointed leaders enrich themselves by ensuring the American Blacks do not, as a community, make economic progress. The worst possible thing for these pseudo-leaders would be an emerging Black middle class. If Blacks achieved economic success, they'd have no need for the demagogues.

It's time to fight the new fight, not the old one. It's time to drop the old rhetoric and update the cause. It's time to take some responsibility for our own actions. Let me be clear. If we want to move forward, the shackles of yesteryear's rhetoric needs to be broken down and recast. Black Americans are a great people with great potential. Sometimes, everyone needs a reminder: that individuals control our own destiny rather than playing the blame game to justify personal failures.

A new generation of Black leadership is rising: J.C. Watts, Alan Keyes, Condoleezza Rice, Clarence Thomas, Colin Powell, and others lead with words or by example. African-Americans can rise by engaging in the free enterprise system. The success of individual African-Americans is both a barometer and a pattern to follow.

This country elected a black president. That alone should have put to rest the constant rants of discrimination and the overwhelming demands for affirmative action to rest. No quota system here. Obama got elected because he worked hard and promoted his policies in such a way as to garish the most votes. This fixation on victimization - the decades-old vision that the plights of the black community are someone else's fault - needs to go.

Rather than being made dependent on government programs - from affirmative action to hiring quotas to welfare to food stamps - Black Americans will be free to rise when they are free to engage in a free market. Black leaders who teach them how to use the economy - not how to live off the economy - will be the leaders who bring the Black community into a prosperous middle-class existence.

How Many Names Can One Spy Have?

Starting shortly after the Russian Revolution of 1917, and accelerating during the 1930's, 1940's, and 1950's, the Soviet Union maintained an extensive network of spies in the United States. They had various purposes: to collect information, to disseminate disinformation, and to work from inside the United States government to influence policy decisions. An obvious part of such covert operations is manufacturing identities, at which the KGB and other Soviet intelligence agencies worked strenuously.

One agent, whose probable name was Vilyam Genrikhovich Fisher, is known most commonly as Rudolf Ivanovich Abel. But he also used the name Andrew Kayotis and the name Emil Robert Goldfus. Although this may seem like a lot of names, for a relatively short career, it is not uncommon for any spy to have a number of aliases.

Walter Pincus, writing in the Washington Post, alludes

to the case involving Col. Rudolph Abel, a Soviet KGB agent, who lived in New York City under an assumed name and purported to be a commercial photographer. Abel was tried and convicted of spying in 1957, and in 1962 he was exchanged for Francis Gary Powers, the American U-2 pilot who had been shot down over the Soviet Union and was in a Russian jail.

Before his capture, Rudolph Abel visited Bear Mountain Park with his assistant Reino Häyhänen in 1955. The two of them buried $5000 in cash, intended for the wife of Morton Sobell, another Soviet spy who had been caught and was sitting in an American jail. This was apparently Moscow's attempt to take care a spy's wife, since Morton Sobell had been in prison since 1951. Later, Reino Häyhänen went back and retrieved the money for himself, and leaving Sobell's wife luckless. Before his capture, Sobell had been working on getting military secrets about Fort Monmouth. Describing the location, M. Stanton Evans writes:

The installation called Fort Monmouth was in fact a sprawling network of labs spread out among several New Jersey towns and other Northeast locations, doing research on confidential military projects. Radar, missile defenses, antiaircraft systems, and other devices involving advanced electronics were all on the agenda. There were four main research labs.

Monmouth would clearly be a tempting target for any Soviet intelligence agency. Morton Sobell was not the only Russian spy looking to get secrets out of Fort Monmouth:

The installation had been a scene of action in the 1940s for Julius Rosenberg, then a Signal Corps inspector, and to a lesser extent for his convicted coconspirator, Morton Sobell, and two other accused members of the spy ring, Joel Barr and Al Sarant.

Joel Barr and Al Sarant would later move from being "accused" to being "confirmed," as the FBI investigated further, and as the "Venona" documents were made available. Sobell and Rosenberg, in turn, had worked with another Soviet agent, Aaron Coleman. Coleman had learned to exploit three weaknesses in Fort Monmouth's security:

One was that the Communist Party had established a special unit in the vicinity of the research setup, called the Shore Club, which included former Monmouth employees among its members and which, according to extensive testimony, had as its object ferreting information out of Monmouth. Another was that numerous security suspects were indeed ensconced among Monmouth's suppliers, most notably the Federal Telecommunications Lab, prime target of the Sheehan inquest. Yet another was the seemingly laid-back attitude toward these matters in the higher reaches of the Army.

As a sense of alarm grew, G-2, the army's intelligence unit, began to investigate.

By far the most comprehensive overview of the security scene at Monmouth would be provided - after some initial hesitation - by Captain Benjamin Sheehan, a G-2 counterintelligence specialist from First Army headquarters in New York.

Sheehan had investigated Fort Monmouth in 1951, so his firsthand knowledge of security risks was up-to-date. Sheehan's work led to the arrest of Sobell, and Sheehan confirmed that there were weaknesses in Monmouth's security.

A poster boy for all these troubles was one Aaron Coleman, who held an important job at Monmouth dealing with radar defenses. Coleman had been a schoolmate of Julius Rosenberg and Morton Sobell at the College of the City of New York, and in contact with Sobell up through the latter 1940s. He also admitted having attended a Young Communist League meeting with Rosenberg when they were students at City College. In this connection, ex-Communist Nathan Sussman, a CCNY alum, would testify that he, Coleman, Rosenberg, Sobell, Al Sarant, and Joel Barr had all been members of the YCL together. (Coleman would deny this, as he would deny Rosenberg's testimony at his espionage trial that Rosenberg and Coleman had been in contact at Fort Monmouth.)

Although tangled and complex, these events - merely a sample of many more - serve to show the growing Soviet espionage network in the United States from the 1930's to the 1950's, and even into later decades.

Defense, Not Revenge

In late 2001, the United States faced an important question: how would it respond to, not only to the Islamic terrorist attacks of 9/11, but to the sudden awareness of a worldwide terror network - a network immutably determined to kill Americans? The question of how America would respond to this grave threat would determine much about national policy and even about daily life for the next several decades.

It was and is important to understand that such terrorist networks, al-Qaida being only one of many, while ever adapting and changing their tactics, are incorrigible in their ideology. They are immovably fixed on the goal of killing Americans. Because they have such an extreme psychology, the civilized world cannot interact with them using the methods of negotiation and diplomacy. There are no conceivable actions which could be taken, or words which could be uttered or written, by any government, individual, or society which would cause such groups to change their primary behavior, which is murder.

The ways in which nations or cultures choose to respond to terrorism will both reflect and impact the deeper core values of those nations or cultures. For this reason, the United States should not react with a motive of revenge. Revenge not only clouds strategic and tactical thought, but it infects the soul. Vengeance is backward-looking. Instead, the primary goal must be to protect citizens from future attacks. Secretary of Defense Donald Rumsfeld writes:

A key element of the administration's policy was that the primary purpose of America's reaction to 9/11 should be the prevention of attacks and the defense of the American people, not punishment or retaliation. The only way to protect ourselves is to do after the terrorists wherever they may be. This was a more ambitious goal than the approaches previous presidents had set. It reflected Bush's view, which I shared, that 9/11 was a seminal event, not simply another typical terrorist outrage to which the world had become accustomed. The 9/11 attack showed that our enemies wanted to cause as much harm as possible to the United States - to terrorize our population and to alter the behavior of the American people. No one in the administration, as far as I know, doubted that the men who destroyed the World Trade Center and hit the Pentagon would have gladly killed ten or a hundred times the number they killed on 9/11. They were not constrained by compunction, only by the means to escalate their carnage. This meant that their potential acquisition of weapons of mass destruction - biological, chemical, or nuclear - represented a major strategic danger.

Specifically, al-Qaida had set up a workshop for the manufacture of biological and chemical weapons in the town of Khurmal. The facility, operated by an al-Qaida affiliate known as Ansar al-Islam, was documented to be producing ricin, cyanide, potassium chloride, and possibly other chemical weapons. Awareness of such operations was part of the heightened alertness in the years after 9/11. The facility in Khurmal was one more piece of data which the world was incorporating into its concept of who and what Islamic terror groups are.

Learning to Prevent Terror

Reacting to terror is a sign of an unprepared and unthinking government; responding to terror is somewhat better. Preventing terror is the proper focus for a government. The United States moved through these three phases in the aftermath of the terrorist attacks on September 11, 2001. Realizing that there was a coordinated and funded network of individuals and groups whose sole aim was to kill Americans was the first step.

The name Osama bin Laden would soon be common in the news media. This Saudi millionaire issued a fatwa - an Islamic verdict - stating that

the ruling to kill the Americans and their allies - civilians and military - is an individual duty for every Muslim who can do it in any country in which it is possible to do it.

The public learned that the group operated by Osama bin Laden, al-Qaida, was one of a long list of terror organizations. Ending the terrorist threat would not simply mean dismantling al-Qaida and getting rid of Osama bin Laden. An entire network of terrorist groups would have to be defunded and destabilized; the safe havens which had sheltered parts of this network would have to be made inhospitable to it.

Most of all, the nations of the world would have to understand that these terrorists were incorrigible: their one and only objective was to kill Americans. With them, there could be no negotiating, no deterrence, no compromise, no diplomacy, no appeasement, and no tradeoffs. As long as the network of terrorist groups existed, and as long as its members lived, they would be working diligently to kill. Innocent civilians would be safe only when the network and its members were eliminated. This realization would be possible only after the immediate shock of the attacks wore off. Secretary of Defense Donald Rumsfeld writes:

America awoke the next day a nation at war. Above pictures of the burning World Trade Center, the Washington Times had a one-word front-page headline that read, in large, bold, capital letters: "INFAMY." Across the United States, Americans expressed anger and sadness. They also voiced fear of further attacks. Many wondered if they were safe, how their lives might have to change, whether their family members or friends were in danger. Major landmarks considered likely targets were watched with anxiety. Each rumor of another attack set people on edge. Some feared for family members in the military. The financial world was in shock. The stock market suffered one of its biggest drops in history when it reopened six days after 9/11. Hundreds of billions of dollars - property damage, travel revenue, insurance claims, stock market capital - all lost in a single day because nineteen men with a fanatical willingness to die boarded four commercial airliners wielding box cutters.

Understanding the nature of these fanatics was and is a central historical task. Vocabulary is helpful: there is a difference between 'Islam' and 'Islamist' and a difference between 'Islamic' and 'Islamism' and these differences are crucial.

Islam is a religion, which people, like every other religion - Buddhism, Hinduism, Judaism, Christianity, etc. - have a constitutional right to practice. Islamism is, by contrast, not merely the religion of Islam, but rather the most orthodox interpretation of that religion, adhering carefully to Qur'an (Koran) and other sacred texts of that religion. Islamism is essentially, intrinsically, and inherently violent. Civilized people in general, and the United States government in the wake of 9/11 in particular, have no quarrel with Islam. Islamism, on the other hand, constitutes a continual danger to free and peaceful civilians everywhere.

The word 'Islamic' refers to the religion, to the culture, and to the practitioners of that religion. On the other hand, the word 'Islamist' refers to the propaganda, to the attacks, and to those who carry them out in the name of orthodox understandings of the prophet Muhammad. As leaders of all western governments have repeatedly stated, the civilized nations of the word seek peaceful relations with Islamic cultures; but from Islamists, conversely, come only violence and terror. Don Rumsfeld writes:

However, I became increasingly uncomfortable with labeling the campaign against Islamist extremists a "war on terrorism" or a "war on terror." To me, the word "war" focusses people's attention on military action, overemphasizing, in my view, the role of the armed forces. Intelligence, law enforcement, public diplomacy, the private sector, finance, and other instruments of national power were all critically important - not just the military. Fighting the extremists ideologically, I believed, would be a crucial element of our country's campaign against them. The word "war" left the impression that there would be combat waged with bullets and artillery and then a clean end to the conflict with a surrender - a winner and a loser, and closure - such as the signing ceremony on the battleship USS Missouri to end World War II. It also led many to believe that the conflict could be won by bullets alone. I knew that would not be the case.

Voices in government and in the media repeated our friendship with, and respect for, peaceful and moderate Muslims - typically those who lived in American suburbia: middle class, middle-aged, mid-western, educated professionals. Such people were not to be seen as a threat. Rather, it was the radicalized version of Islam which was both seed and fertile ground for terror. The distinction between dangerous Islamists and peaceful and moderate Muslims - nominal Muslims, not bound slavishly to the literal texts of the past - was and is a central distinction to understanding the terrorism which threatened and threatens not only the United States, but much of the free world. Rumsfeld continues:

From the beginning, members of the administration worked gingerly around the obvious truth that our main enemies were Islamic extremists. I didn't think we could fight the crucial ideological aspect of the war if we were too wedded to political correctness to acknowledge the facts honestly. While we certainly were not at war against Islam, we did intend to fight and defeat those distorting their religious beliefs - their Islamic religious beliefs - to murder innocent people. I thought that the best term was Islamist extremists, which made clear we were not including all Muslims. Islamism is not a religion but a totalitarian political ideology that seeks the destruction of all liberal democratic governments, of our individual rights, and of Western civilization. The ideology not only excuses but commands violence against the United States, our allies, and other free people. It exalts death and martyrdom. And it is rooted in a radical, minority interpretation of Islam.

For more than a decade, the United States has wrestled with the subtle and nuanced situations in which these distinctions must be applied. Learning to identify those who are truly people of good will, and learning to identify those who wish only to kill, is not always easy. But learning to make such distinctions is necessary for the survival of civilization, and necessary for the defense of the peculiarly western notion that human life is innately valuable and precious.

The Multiple Roots of Our Misery

As Director of the Office of Management and Budget (OMB) from January 1981 to August 1985, David Stockman learned first-hand the workings of the federal government at the highest levels. Educated at Harvard, his firm belief was that free market capitalism will create more prosperity for the population than “crony capitalism” - the latter being a system in which markets are nudged by the government into various patterns, rather than allowing patterns to emerge organically as free individuals make decisions about buying and selling.

In addition to favoring free markets over regulated markets, Stockman also understood that in order to get the full benefit of tax cuts, such cuts must be accompanied by roughly corresponding cuts in the federal budget. When the Reagan administration opted to take tax cuts despite congressional unwillingness to make any spending cuts, Stockman declared that the “Reagan Revolution” had failed. Only when taxes and federal spending are simultaneously reduced can a country hope to make progress against both debt and deficit. Stockman saw that clear economic prescriptions were corrupted by the political process. Disillusioned, he resigned from the OMB and never returned to politics.

From his private-sector perch, he continues to offer explanations about economic events, illuminated always by the distinction between free markets on the one side, and crony capitalism on the other side.

It requires a great deal of self-discipline for a government to oversee a truly free market: the temptation to intervene is omnipresent. While it may seem catastrophic for one or more large enterprises to fail, and seem negligent for a government to stand back and allow large businesses to go bankrupt, such events are necessary, and in the long run beneficial, to the national economy.

The specter of factories closing, workers being laid off, and large unemployment numbers appearing in reports can instill fear in the stoutest hearts. But oftentimes, enduring such short-term pain paves the way for long-term gain. Enduring a few months of unemployment often leads workers to new jobs at even higher wages, if they are working in a truly free market.

Sadly, most elected political leaders - Democrat or Republican, liberal or conservative - do not have the stomach to stand back and simply let major industries collapse. Although this crash would pave the way for an economic boom, the temptation is to intervene. Stockman writes:

By the time of the September 2008 crisis, however, these long-standing rules of free market capitalism had undergone fateful erosion: traditional rules of market discipline had been steadily superseded by the doctrine of Too Big To Fail (TBTF). The latter arose, in turn, from the notion that the threat of “systemic risk” and a cascading contagion of losses from the failure of any big Wall Street institution would be so calamitous that it warranted an exemption from free market discipline.

While a political leader can sound very confident as he labels this or that concern as “too big to fail,” there is in fact no theoretical construct which clearly defines such a category of businesses. In fact, some theoretical models of free markets predict that every firm will eventually fail, and that such a failure is not only a necessary part of the business cycle, but it is a beneficial part of the cycle - such failures create the next round of opportunities.

But there was no proof of this novel doctrine whatsoever. It implied that capitalism was actually a self-destroying doomsday machine which would first foster giant institutions with wide-ranging linkages, but would then become vulnerable to catastrophe owing to the one thing that happens to every enterprise on the free market - they eventually fail.

Even if one were to grant, for argument’s sake, the TBTF hypothesis, then one would expect, as a logical consequence, that governments would simply regulate the economy so that no corporation ever grew so large that it was TBTF. While wrong-headed, that would at least be internally consistent from a theoretical point of view. But instead, the nation’s central bank chose to simply tinker with the market place.

In fact, if TBTF implied an eventual catastrophe for the system, there was an obvious solution: a “safe” size limit for banks needed to be determined, and then followed by a 1930s-style Glass-Steagall event in which banking institutions exceeding the limit would be required to be broken up or to make conforming divestitures. Yet while the TBTF debate had gone on for the better part of two decades, this obvious “too big to exist” solution was never seriously put on the table, and for a decisive reason: the nation’s central bank during the Greenspan era had become the sponsor and patron of the TBTF doctrine.

President Ronald Reagan had appointed both David Stockman to the OMB and Alan Greenspan as Chairman of the Federal Reserve. While Stockman remained true to his economic training and worked for truly unregulated markets and for spending reductions to match tax cuts, until he resigned after seeing “the triumph of politics” over rational economics, Alan Greenspan, on the other hand, seemed to shed his free market ideology upon taking office. Whether Greenspan was truly a die-hard laissez-faire advocate, or whether Reagan merely mistakenly thought he was one, is open to debate. Reagan thought that, in appointing Stockman and Greenspan, he was appointing two ideological soulmates; that hope was quickly shattered, as was the hope that Congress would see the wisdom in cutting spending as it cut taxes. When Congress refused to cut spending, Reagan took the tax cuts as a political compromise. In politics, one can take “half a deal” as a compromise; but in economics, one cannot take half an equation and get half the results.

This was an astonishing development because it meant that Alan Greenspan, former Ayn Rand disciple and advocate of pure free market capitalism, had gone native upon ascending to the second most powerful job in Washington. In fact, within five months of Greenspan’s appointment by Ronald Reagan, who had mistakenly thought Greenspan was a hard-money gold standard advocate, the Fed panicked after the stock market crash in October 1987 and flooded Wall Street with money.

Abandoning the basis of the free market, Greenspan saw his objective as the stabilization and maintenance of certain market levels. This was one of many steps which led the nation toward economic disaster.

For the first time in its history, therefore, the Fed embraced the level of the S&P 500 as an objective monetary policy. Worst still, as the massive Greenspan stock market bubble gathered force during the 1990s it had gone even further, embracing the dangerous notion that the central bank could spur economic growth through the “wealth effect” of rising stock prices.

Greenspan found justification in the writings of Milton Friedman. Friedman, a Nobel Prize winner in economics, while propounding an orthodox version of the free market, introduced another error. Friedman endorsed the notion of floating exchange rates for currencies, even after President Richard Nixon cut the final loose connections between the US dollar and the price of gold. Friedman’s vision of floating exchange rates paved the way, perhaps unwittingly, for an entire industry of currency speculation. The worst effects of that industry would take decades to emerge after Nixon’s disastrous 1971 decision.

It thus happened that Leo Melamed, a small-time pork-belly (i.e., bacon) trader who kept his modest office near the Chicago Mercantile Exchange trading floor stocked with generous supplies of Tums and Camels, found his opening and hired Professor Friedman. Even as several dozen traders at the Merc labored in obscurity to ping-pong a thousand or so futures contracts per day covering eggs, onions, shrimp, cattle and pork bellies, Melamed was busy plotting the launch of new futures contracts in the major currencies. In so doing, he inadvertently demonstrated how radically unprepared the financial world had been for the Friedmanite coup at Camp David.

The Chicago Mercantile Exchange - known simply as the ‘Merc’ - is an institution which facilitates the trading of futures and options, two types of financial instrument. A “future” is a contract to buy or sell a given quantity of a given commodity at a given price at some specified future time. For example, we can write a “future” to sell one ton of steel for $50 three months from now, or to buy one ton of wheat for $75 two months from now. Originally designed for industries which used these commodities, they eventually began to be used for pure speculation. An “option” is a document which gives its owner the right to buy or sell a quantity of a commodity at a given price at a specified future time, but does not oblige him to do so. The trading of futures and options requires complex calculation, involves great risk, but can yield great profits. Traditionally, the commodities involved were wheat, steel, copper, cotton, corn, beef, pork bellies, and a few other agricultural and mining products. Now, that would change. Because of floating exchange rates for major world currencies, and finally because of floating exchange rates for the US dollar, futures and options would be traded, not for wheat or steel, but for currencies. This would change the world’s exchange dynamic in ways which were unpredictable and which took years to manifest themselves.

Leo Melamed was the genius founder of the financial futures market and presided over its explosive growth on the Chicago “Merc” during the last three decades of the twentieth century. He understandably ended up exceedingly wealthy for his troubles, but on Friday afternoon of August 13, 1971, it would not have been evident to most observers that either of these outcomes was in the cards.

While the speculative trading of currencies was quietly starting - the world didn’t seem to notice at the time - other harmful changes to the nation’s economy were underway. Greenspan managed interest rates and managed the money supply with an eye to keeping equities markets at certain levels.

This should have been a shocking wake-up call to friends of the free market. It implied that the state could create prosperity by tricking the people into thinking they were wealthier, thereby inducing them to borrow and consume more. Indeed, the Greenspan “wealth effects” doctrine was just a gussied-up version of Keynesian stimulus, only targeted at the prosperous classes rather than the government’s client classes. Yet it went largely unheralded because Greenspan claimed to be prudently managing the nation’s monetary system in a manner consistent with the profoundly erroneous floating-rate money doctrines of Milton Friedman.

Allegedly different from each other, both President George W. Bush and President Barack Hussein Obama would find themselves in the financial turmoil of 2008, more than 25 years after Nixon’s currency rate decision, and both would seek advice from Greenspan’s successor, Ben Bernancke, who insisted on comparing the situation in 2008 to the situation in 1929.

The great contraction of 1929-1933 was rooted in the bubble of debt and financial speculation that built up in the years before October 1929, not from mistakes made by the Fed after the bubble collapsed. In the fall of 2008, the American economy was facing a different boom-and-bust cycle, but its central bank was now led by an academic zealot who had gotten cause and effect upside-down.

If the situation in 2008 was misdiagnosed, inasmuch as Bernancke saw it as parallel to 1929, then the misdiagnosis led to incorrect prescriptions.

The panic that gripped officialdom in September 2008, therefore, did not arise from a clear-eyed assessment of the facts on the ground. Instead, it was heavily colored and charged by Bernancke’s erroneous take on a historical episode that bore almost no relationship to the current reality.

The prescription for the problems of 2008 were not appropriate for that situation, or indeed for any situation. They helped not at all, but rather created two additional problems: further distortion of the market’s natural trend, and further undermining of currency’s credibility. Yet these bad prescriptions were delicious to those business leaders who did not want to operate in a free market. Cronyism had a heyday. Instead of exposing all businesses to the hurricane of market fluctuations and seeing which of them could weather the storm, markets were warped to create safe havens for those businesses which abandoned their laissez-faire ethics and would sell their honor for a government handout.

Nevertheless, the bailouts hemorrhaged into a multitrillion-dollar assault on the rules of sound money and free market capitalism. Moreover, once the feeding frenzy was catalyzed by these errors of doctrine, it was thereafter fueled by the overwhelming political muscle of the financial institutions which benefitted from it.

From Stockman’s viewpoint, 2008 was 1985 all over again. Theoretical purity was negotiated away to political pragmatism. Such damage, once done, is not quickly or easily undone.

These developments gave rise to a great irony. Milton Friedman had been the foremost modern apostle of free market capitalism, but now a misguided disciple of his great monetary error had unleashed statist forces which would devour it. Indeed, by the end of 2008 it could no longer be gainsaid. During a few short weeks in September and October, American political democracy had been fatally corrupted by a resounding display of expediency and raw power in Washington. Every rule of free markets was suspended and any regard for the deliberative requirements of democracy was cast to the winds.

In David Stockman’s view, then, a series of bad decisions led to the nation’s economic decline: Nixon’s free floating currency, the Fed attempting to manage the stock markets via interest rates, speculation on currency exchange rates, Congress’s refusal to cut spending, and more. The lingering question remains: can it be undone?