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Today — 20 June 2024Main stream
Yesterday — 19 June 2024Main stream

US billionaire eyes TikTok takeover to save internet from Big Tech

19 June 2024 at 12:53
Biden told Xi of US concerns on China ownership of TikTok: W.House

Frank McCourt, a US real estate billionaire, aims to buy TikTok to rescue the internet from the clutches of major platforms that he firmly believes are destroying society and endangering children. In the United States, McCourt is best known as the former owner of the Los Angeles Dodgers baseball team, while in Europe he is […]

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Hezbollah chief says nowhere in Israel will be spared in case of full-blown war

19 June 2024 at 12:32
Hezbollah chief says group has not yet used 'main' weapons against Israel

Hezbollah chief Hassan Nasrallah on Wednesday warned “no place” in Israel would be spared from the group’s weapons in case of a full-blown war, after Israel said operational plans for a Lebanon offensive had been approved. “The enemy knows well that we have prepared ourselves for the worst… and that no place… will be spared […]

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Hezbollah chief threatens Cyprus if it opens airports, bases to Israel

19 June 2024 at 12:30
Hezbollah chief says group has not yet used 'main' weapons against Israel

Lebanon’s Hezbollah chief Hassan Nasrallah on Wednesday threatened the nearby island of Cyprus if it opened its airports and bases to Israel in the event of total war with his armed movement. “Opening Cypriot airports and bases to the Israeli enemy to target Lebanon would mean that the Cypriot government is part of the war, […]

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Brussels refuses to host Belgium-Israel football match over security fears

19 June 2024 at 12:22
Palestine reach Asian Cup knockouts for first time

Brussels has refused to host a Nations League match between Israel and Belgium on September 6 because it could spark demonstrations, city authorities said on Wednesday. They said in a statement that holding such a match while the war in Gaza was continuing “will undoubtedly provoke large demonstrations and counter-demonstrations, compromising the safety of spectators, […]

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North Korea helping Russia carry out ‘mass murder’ of civilians: Kyiv

19 June 2024 at 12:13
Russia says UN sanctions on N.Korea have 'not helped' improve regional security

A senior Ukrainian presidential aide on Wednesday said North Korea was helping Russia kill Ukrainian civilians and called for greater international isolation of both countries. Russian President Vladimir Putin and North Korean leader Kim Jong Un on Wednesday signed a comprehensive strategic partnership, deepening military and political ties that have flourished since Russia invaded Ukraine. […]

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Loved ones search for missing as hajj death toll passes 900

19 June 2024 at 11:16
no restriction hajj numbers

Friends and family searched for missing hajj pilgrims on Wednesday as the death toll at the annual rituals, which were carried out in scorching heat, surged past 900. Relatives scoured hospitals and pleaded online for news, fearing the worst after temperatures hit 51.8 degrees Celsius (125 Fahrenheit) in Mecca, Islam’s holiest city, on Monday. About […]

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Stonehenge monument sprayed orange in UK climate protest

19 June 2024 at 11:03
Stonehenge spray paint uk

UK police arrested two people on Wednesday after environmental activists sprayed an orange substance on Stonehenge, the renowned prehistoric UNESCO world heritage site in southwest England. The Just Stop Oil protest group said two activists had “decorated Stonehenge in orange powder paint” to demand that Britain’s next government legally commit to phasing out fossil fuels […]

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Putin says Russia, North Korea ‘fighting US hegemony together’

19 June 2024 at 08:20
Putin Kim

Russian President Vladimir Putin said Wednesday that Moscow and Pyongyang were fighting “US hegemony” together as he thanked North Korean leader Kim Jong Un for what he called the country’s “balanced position” on Ukraine. “Today, we are fighting together against the hegemonism and neo-colonial practices of the United States and its satellites,” Russian state news […]

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Germany weighs expulsions to Afghanistan via 3rd countries

19 June 2024 at 08:10
Germany weighs expulsions to Afghanistan via 3rd countries

Germany is in talks with third countries to find ways to deport criminals to Afghanistan without dealing directly with the Taliban, Interior Minister Nancy Faeser said Wednesday. “We are working hard to ensure that we can once again deport dangerous Islamists and violent criminals to Afghanistan,” Faeser told the Neue Osnabruecker Zeitung daily. “We are […]

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Air pollution linked to nearly 2,000 child deaths a day: report

19 June 2024 at 08:06
Ukraine war responsible for 150 million tons of CO2 emissions: experts

Nearly 2,000 children die every day from health problems linked to air pollution, which is now the second biggest risk factor for early death worldwide, a report said Wednesday. Exposure to air pollution contributed to the deaths of 8.1 million people — around 12 percent of all fatalities — in 2021, according to the report […]

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Stiglitz: When Good Minds Seek Fools’ Favor

Joseph E. Stiglitz, Nobel prize in economics, at the École Polytechnique. 2019

To be free, I must be able to make and keep voluntary agreements. The central problem with the Hobbesian “state of nature” is precisely that each person has “too much liberty,” precisely because no contract, promise, or right to property can be relied on. Such “enforcement” of agreements is not coercive, but is literally required for the liberty to engage in commerce and division of labor.

Likewise, people living in society need to be able to make and keep voluntary collective agreements, at scale, and at low cost. We’ll drive on the right, we’ll have a speed limit of 45 mph on this road, and 70 mph on that road. To provide for local defense and security we’ll have a police force, with a rule for contributions to finance the employees. These agents of ours are literally called a “force,” because the use of force is consented for, and contracted by, the citizens.

Further, to provide for reliable and disinterested resolution of disputes over contracts, torts, and rule violations, we’ll have a court system; the judges’ pay will be independent of their findings in the cases they hear and decide.

All of these things are obviously necessary for anything remotely approaching “freedom” to be enjoyed by citizens. The rights and the public services do not originate with “the state,” but are the product of the recognition of citizens that order and predictability, including the right to consent to be subject to “force” if the rules are violated, are necessary for a republic to function and thrive.

This notion of “emergent order,” or “spontaneous order,” with its web of binding agreements and organized social structures, lies at the very heart of the argument for capitalism. The need for such order has been recognized since (at least) the Scottish Enlightenment, when David Hume, Adam Smith, Adam Ferguson, and Dugald Stewart laid out the intellectual foundations of a system of propriety and property rights that create a context where commercial activity creates wealth and elaborates the division of labor.

What does any of this have to do with Joseph Stiglitz’s book, The Road to Freedom? Almost nothing, it seems, and that’s a big problem. Stiglitz wants to argue — actually, it’s simply an unsupported assertion — that no one who advocates for commerce and markets ever thought about the problem of rules.

Such a claim would hardly be surprising among the superficial polemicists — Naomi Klein, Zephyr Teachout, or Thomas Friedman, for example — who make no pretense of being intellectually serious. When otherwise competent and able scholars ignore the tradition of emergent order, however, it is harder to explain. I am thinking, in particular, of two Nobel prize-winning economists, Joseph Stiglitz (2001 prize), and Paul Krugman (2008). Let me be clear at the outset: both Stiglitz and Krugman far exceed me in intellect, and in ability as economists. When I read their work as professionals, I am consistently impressed, and informed. Stiglitz’s work on public finance and asymmetric information, and Krugman’s work on international trade and regulation, are insightful and of considerable importance in the discipline.

Neither Krugman nor Stiglitz is doing this for the money, at this point in their careers; instead, they are proving Adam Smith’s famous claim that celebrities, once they have tasted fame, become addicted and are willing to commit increasingly egregious intellectual indignities to retain the favor of the frivolous.

Smith describes the problem clearly, in The Theory of Moral Sentiments, Book I, Chapter 3:

In the middling and inferior stations of life, the road to virtue and that to fortune, to such fortune, at least, as men in such stations can reasonably expect to acquire, are, happily in most cases, very nearly the same. In all the middling and inferior professions, real and solid professional abilities, joined to prudent, just, firm, and temperate conduct, can very seldom fail of success…

In the superior stations of life the case is unhappily not always the same. In the courts of princes, in the drawing-rooms of the great, where success and preferment depend, not upon the esteem of intelligent and well-informed equals, but upon the fanciful and foolish favour of ignorant, presumptuous, and proud superiors; flattery and falsehood too often prevail over merit and abilities. In such societies the abilities to please, are more regarded than the abilities to serve.

Let there be no doubt. Joseph Stiglitz rose through genuine achievement. But that makes the psychological need to stay “at the top” almost more tragic. The need to be seen as a policy shaman by the politically powerful can overwhelm even the wise.

Still, after allowing for the seductions of fame, it is hard to explain The Road to Freedom. The book reads more like extended performance art than an academic work, or even a serious trade book. At the outset, in the Preface, we are told that “The Right in the United States seized on the rhetoric of freedom several decades ago, claiming it as their own just as they claimed patriotism and the American flag as their own” (emphasis added).  

One might answer, of course, that patriotism and the American flag were hidden well back in the Left’s closet, unused, so the Right’s “seizing” of them was uncontested. But is it remotely plausible to believe that the Right seized only the rhetoric of freedom, and that this innovation was only “several decades ago”?

It is the nature of conservatism to seek to conserve, focusing especially on traditions and customs, as well as the rule of law and order. Conservatism in the US has a very different tradition to “conserve,” compared to the Right in Europe or South America. Whereas conservatives in other countries see themselves as stewards of religious tradition, or nationalism, or a sense of racial and cultural unity with the past, conservatives in the US center the Founding: the creation of doctrines and norms that erect a constitutional scaffolding to support liberalism. More simply, America is the only nation with a classical liberal tradition to conserve; for that reason, conservatives in the US have deployed the “rhetoric of liberty” to defend actual liberty. And they have been offering up that defense for something closer to several centuries than “several decades.”

Now, Stiglitz does give examples of “great thinkers” on the right who fit his story. These include George W. Bush, Rick Santorum, and Ted Cruz. I’m not making that up, friends: Joseph Stiglitz wants us to abandon property rights and commerce because Bush, Santorum, and Cruz were unable to offer coherent defenses of capitalism.

Eventually, Stiglitz does get around to considering the more serious arguments of actual intellectuals, the first team of the defenders of classical liberalism.  But here is an example of the level of his consideration: “Hayek and Friedman were the most notable mid-twentieth-century defenders of unfettered capitalism” (emphasis added).

I hope the reader can now forgive the extended introduction, describing the emergent order of a society in which commerce is embedded. Calling this “unfettered” is simply inaccurate, conceptually. It is also grossly inaccurate empirically, in the sense that the phrase “unfettered capitalism” literally never appeared, not once, in the writing of either Hayek or Friedman. No one argues for unfettered capitalism, because “fetters” are necessary for commercial transactions to be possible. I need the liberty to make a credible commitment, metaphorically binding myself to the mast much as Odysseus bid his men bind him to the mast in a physical sense. The ability to fetter ourselves is in fact the essence of living in society.

As early as 1944, in The Road to Serfdom — the book Stiglitz presumably believes he is demolishing with his current polemic — Hayek laid out the general rules, the social “fetters” that make a liberal order possible. He is clear about this at several points, but it is impossible to read pages 85-88, in particular, and think that Hayek advocated for anything remotely like “unfettered” anything. A liberal order requires, and at same time supports, the “Rule of Law,” the core goal of a liberal society. Hayek is not even advocating for capitalism per se, but is trying to argue for a liberal society, of which (in his view) capitalism is an important component.

Later, in The Constitution of Liberty, Hayek was quite clear about the need for guard rails and rules to guide commercial activity:

It is the character rather than the volume of government activity that is important. A functioning market economy presupposes certain activities on the part of the state; there are some other such activities by which its functioning will be assisted; and it can tolerate many more, provided that they are of the kind which are compatible with a functioning market. But there are those which run counter to the very principle on which a free system rests and which must therefore be altogether excluded if such a system is to work.

This is the heart of the matter, the point on which the argument turns. In my view, it is the point on which Hayek wins, and Stiglitz loses, but I may have that wrong. Still, this question of “the character rather than the volume of government activity” is the core aspect of the disagreement.

For Stiglitz, and for the Cambridges (both the one in the UK and the one in Massachusetts), “regulation” is a homogeneous commodity, a “good” in economic terms. It is optimized by passing through the political process where it is vetted by a priestly class of shamans, the smartest people in the world (those turn out to be Stiglitz, and the people from the Cambridges; who would have expected that?). More regulation is always better; it then follows that opposition to any new or existing regulation must be bad, simply by definition.

Opposed to this view are Hayek and Friedman, and classical liberals like me. We favor the rule of law, general principles that limit what the state can do, even if in a utilitarian sense it is “for the common good,” as conceived by the self-appointed genius-shamans. An implication is that regulation is far from homogeneous, and must be considered on a case-by-case basis. Any regulation that violates property rights, or distorts price signals, should be questioned, and if on examination it is found wanting that regulation must be removed. As Hayek said, “It is the character rather than the volume of government activity that is important.”

And that is the implication that threatens the foundation of the entire Stiglitzian enterprise. No one is arguing for unfettered capitalism. Arguments for deregulation are based on the specific claim that a rule or regulation is blocking mutually beneficial exchanges, or distorting the information signals in prices, and so that particular regulation should be removed.

It is Stiglitz and his apostles who want an unfettering…of the state apparatus of coercion! Rule of law, property rights, and a presumption in favor of consumer welfare in antitrust are all impediments to the shamans leading us to a better world. The constitution must be suspended; the ability of corporations to defend themselves using campaign spending must be curtailed, and information that contradicts the “scientific” claims of the shamans must be censored, again for the common good. All of the constitutional fetters that prevent the expansion of regulations, and the powers of the administrative state, must be swept away.

After achieving what he calls “progressive capitalism” revolution in which the state is unfettered, Stiglitz imagines that prosperity will be restored, on a broad scale. To be clear, he himself defines “progressive capitalism” as “rejuvenated social democracy,” a breathtaking change in direction from commercial society to a system where decisions of allocation and income are made by political majorities, filtered through an unelected elite. The road to this new system has three animating factors: the refocusing on a “liberal education,” the unfettering of the power of majorities to redistribute income and property, and the abandonment of the myth of “American exceptionalism.”

It is important to give some flavor of the tone of Stiglitz’s analysis here. He believes “education” should be explicitly designed to attack property rights and to weaken the sense of American exceptionalism, the tradition of classical liberalism embodied in the founding documents. He concludes:

This is why people in favor of continuing current norms (such as restricted gender roles or primacy of markets) regardless of the merits fight so strongly against a liberal education. 

After reading that sentence, I had to put the book down and go for a walk for a few minutes. Throughout my career in academia, teaching at Dartmouth, University of Texas, University of North Carolina, and now nearly three decades at Duke, I have always advocated for liberal arts education. I have been called a conservative, a right-winger, and much worse things, precisely because I advocate for the liberal arts to give students an appreciation of commerce, and a skepticism about a naïve faith in the coercive powers of the state.

But for Stiglitz, there is only one, homogeneous, unwashed and uneducated “The Right,” and it makes sense to lump together the opposition to education, the support of gender segregation, and a rock-ribbed advocacy of commerce. It is hard to take seriously such a superficial and tendentious screed.

Democrats Play the Blame Game on Rent Inflation

Senator Ron Wyden (D-OR) stands to record a joint video address. 2017.

Inflation is the surest way to trigger a Pavlovian response from politicians, whereby they blame monopolists, middlemen, greedy entrepreneurs, profiteers, and price gougers. In 1793, French Revolutionaries fueled inflation by running persistent deficits that they monetized. Their response was to instill fear — courtesy of the guillotine — by blaming productive French citizens for being greedy. Luckily, the guillotine has long been ditched, but the common tropes used by the Biden administration and its allied members of Congress to deflect blame for inflation have not. 

While the money supply has increased by more than 30 percent since 2020, and the Federal government deficit is above 5 percent of national income with no end in sight, Democrats have preferred to blame the private sector. Their most recent target is RealPage, a US software provider that analyzes supply and demand dynamics in the rental real estate market to help landlords price their properties. President Biden went so far as to say “we’re cracking down on big landlords who break antitrust laws by price-fixing and driving up rents.” Sen. Ron Wyden (D-OR) and nine Democratic co-sponsors introduced the Preventing the Algorithmic Facilitation of Rental Housing Cartels Act earlier this year. This type of Advil politics, where the government attempts to treat the symptoms instead of the underlying causes of inflation, comes with costly unintended consequences. 

Without flexible pricing strategies, fluctuations in consumer demand cause inefficient excess demand or excess supply for goods and services. For instance, airfares are higher during summer and lower during the off-peak season to avoid flying empty planes. By using data to optimize their pricing strategy, airlines are able to operate at higher capacity and, therefore, at a lower cost. More recently, software and artificial intelligence developments have helped apply those revenue management methods to other sectors. For example, Uber can optimize supply and prices such that an Uber driver spends much less time without a passenger than a cab driver used to.

By providing valuable information about pricing, companies like RealPage can reduce rental vacancies. This means a greater supply available to renters and lower rents. It is certainly true that RealPage will sometimes recommend its clients raise rents if demand is sufficiently high to warrant it. Yet increasing rents in these contexts prevents demand from being more than capacity, allocates resources to clients valuing them the most, and incentivizes entrepreneurs to increase the supply of rentals.

Overall, RealPage is no different from many other companies engaged in revenue management. Take Perfect Price, which allows car rental companies to determine dynamic pricing. Or Pace, which does the same for hotels. What, then, is the problem progressives have with RealPage? 

Following a number of class-action lawsuits by renters, the Biden Justice Department is now investigating RealPage. It also opened a criminal probe into the company in March 2024. In both cases, the company is accused of facilitating collusion between landlords who collectively adopt rents set by RealPage. These arguments are unconvincing on several grounds.

First, rentals constitute a minority of the US housing market, with the rentership rate below 35 percent. This leaves little room for landlords to charge monopoly prices as it would induce many Americans to switch to homeownership. 

Second, the rental real estate market is very competitive, with individual investors owning around 40 percent of all rental units in the US. 

Third, RealPage faces competition from other real estate revenue management companies, such as Yardi. 

Finally, if revenue management companies helped fix anti-competitive prices, they would incentivize landlords to chisel by charging lower rents than advised by RealPage, thus undercutting competition from RealPage’s other clients. Instead, 90 percent of RealPage clients have adopted the company’s pricing suggestions. That is not evidence of anti-competitive behavior. 

Landlords can charge non-competitive prices only if they can restrict the market supply. If increases in rents had been driven by RealPage helping landlords charge monopoly prices since 2020, the rental vacancy rate should have increased after 2020. Instead, it declined from 6.8 percent in 2019 to 5.8 percent in 2022. This indicates that other factors, such as monetary and fiscal policies that increased overall demand for goods and services, are the likely culprits behind rent increases.

In the free market, the price system lays the cards on the table. Entrepreneurial success means lower prices; the acid of competition erodes inefficiencies. Politics, on the other hand, is the art of making market roadblocks that are unseen to the public. Imposing new costly regulations will not make housing more affordable — unleashing the housing supply by deregulating zoning and overly strict building codes will. There is still time for the players in Washington, DC to reverse course.

Israel vs. International Law: Who Will Win?, by Laurent Guyénot

19 June 2024 at 00:10
French language distinguishes “le Droit” and “la Loi”. In English, “droit” sometimes translates as “right”, as in “human rights”. “Right” carries the notion of rational and universal principles. “Laws” (“les lois”), on the other hand, are arbitrary conventions, which must not necessarily be rational or universal, let alone just. But unfortunately, “le Droit” translates in...